Balkans | Croatia, which started using the euro, is trying to control price hikes

From January 1, 2023, Croatia started to use the Euro by saying goodbye to its currency, the Kuna, and after the price increase, the controls started.

By monitoring how much products have been raised and whether there have been any extreme hikes, officials will try to identify so-called “dark hunters” who are pushing prices above exchange rate levels.

While fines imposed on only two companies in the capital, Zagreb, within a 9-day period are the subject of criticism, consumer associations argue that the penalties are not stringent enough.

Most Croats fear that using the euro will drive up prices in the country, where annual inflation hit 13.5 percent in November.

“It will be difficult, the prices are already high and they will rise again,” says Ivana Toncic, a teacher in Zagreb. In November, the annual inflation rate recorded in the eurozone was 10 percent.

But “Croatia is joining the elite club,” says Marko Pavić, an employee of a tourism agency.

Another employee, Neven Panik, said: “Nothing has changed on January 1. For twenty years, everything has been calculated in euros.”

Experts believe that moving to the euro will help protect Croatia, one of the weakest economies in the European Union, against rising inflation, an energy crisis and geopolitical insecurity after Russia’s invasion of Ukraine.

“The euro definitely brings economic stability and security, and all segments of society will benefit from it,” said Ana Sabic, an employee of the Croatian Central Bank.

The authorities, in particular, cite the elimination of exchange rate risk and the provision of better terms for loan withdrawals as positive developments.

Last July, the finance ministers of the European Union member states that use the euro currency agreed that Croatia would become the twentieth member of the eurozone as of January 1, 2023. Thus, Brussels approved Croatia’s adoption of the euro currency.

Source: euronews