Croatia takes the final steps towards the EU with the opening of borders and the changeover to the euro | Croatia

Croatia switched to the euro and entered Europe’s borderless zone – two steps that its prime minister called a “historic moment” for his country, which joined the European Union nearly 200 years ago. ten years.

On Sunday, the Balkan country said goodbye to its kuna currency and became the 20th member of the eurozone.

It is also now the 27th country in the Schengen area without a passport, the largest in the world, which allows more than 400 million people to move freely between its members.

“It’s the season of new beginnings. And there is no place in Europe where this is truer than here in Croatia,” EU chief Ursula von der Leyen tweeted, as she arrived in Croatia to mark the occasion.

She first met Prime Minister Andrej Plenkovic and Slovenian President Natasa Pirc Musar at a border crossing with EU member Slovenia.

At a joint press conference at the Bregana crossing point, Von der Leyen hailed “two huge achievements” for the new EU member reached on the same day.

“So, indeed, it’s a day for the history books.”

Plenkovic echoed the point, stressing that it was a “historic moment” because the former Yugoslav republic, which fought a war of independence in the 1990s, had reached what he called its “strategic objectives”.

Von der Leyen then headed to Zagreb where she was treated to a coffee in the main square by Plenkovic, who in a symbolic gesture paid in the new currency.

Experts say adopting the euro will help protect Croatia’s economy at a time of soaring inflation worldwide after Russia’s invasion of Ukraine sent commodity prices skyrocketing. food and fuel.

While Croatians welcome the end of border controls, some fear the switch to the euro will lead to an increase in the cost of living, with businesses rounding up prices when converting.

“It’s going to be difficult. The prices that are already high will get even higher,” said Ivana Toncic, a teacher from Zagreb.

But tourism agency employee Marko Pavic said Croatia were joining “an elite club”.

“The euro was already a measure of value – psychologically, this is nothing new – while the entry into Schengen is great news for tourism.”

The use of the euro is already widespread in Croatia. Around 80% of bank deposits are denominated in euros and Zagreb’s main trading partners are in the euro zone.

The officials defended the decision to join the euro zone and Schengen, saying that by doing so, Croatia would complete its full integration into the EU. The country of 3.9 million people joined the EU in 2013.

Experts say adopting the euro will lower borrowing conditions amid tough economic times. Croatia’s inflation rate reached 13.5% in November compared to 10% in the euro zone.

Analysts point out that eastern EU members whose currencies are not part of the euro zone, such as Poland or Hungary, have been even more vulnerable to the surge in inflation.

French President Emmanuel Macron hailed Croatia’s switch to the euro, describing it as a “stable and solid” currency that has contributed to Europe’s resilience in the face of the consequences of the war in Ukraine.

Croatia’s entry into the Schengen area is expected to boost the Adriatic country’s key tourism industry, which accounts for 20% of its GDP. Long queues at the 73 land border crossing points with Slovenia and Hungary will be a thing of the past.

But border controls will not end until March 26 at airports due to technical problems. Croatia will continue to apply strict controls on its eastern border with its non-EU neighbors Bosnia, Montenegro and Serbia.