Thirty years of Croatian national bank observed
ZAGREB, 20 Dec. 2021 – The Croatian National Bank (HNB) is the central monetary institution that has played a crucial stabilizing role in the past and now has an important role on Croatia’s path to the euro area, a ceremony marking 30 years of the HNB was said on Monday.
On June 25, 1991, the parliament adopted a constitutional decision on the sovereignty and independence of Croatia, and on October 8, a decision severing all ties with the former Yugoslavia. On that day, the government passed an HNB decree that went into effect on December 23.
Prime Minister Andrej PlenkoviÄ said the HNB is the central institution of the Croatian monetary system and its 30th anniversary comes under difficult circumstances due to the pandemic as well as a time of transformation as Croatia integrates into the euro zone.
He said the HNB had an important stabilizing role during Croatia’s first decade of independence, as well as an importance that manifested itself when the global financial crisis erupted in 2008.
Then, with monetary policy measures, the HNB cushioned the effects of the crisis on the economy, preserving the stability of the exchange rate, freeing up additional liquidity and contributing to the stability of the state, he said. added.
Croatia completes eurozone preparations at the start of the fourth decade of independence
Speaking about Croatia’s goal of joining the euro area on January 1, 2023, PlenkoviÄ said the common currency was a logical instrument not only for achieving deeper integration, but above all for fully harnessing the potential of the single market.
With a population of over 340 million, the euro area is the world’s second-largest economy, accounting for 15% of global GDP, while the euro is the world’s second-largest currency, accounting for 38% of global transactions, the Premier said. Minister. .
Polls show that 79% of the eurozone’s population support the common currency, while only 15% are against it, although support has increased during the pandemic, he added.
At the start of the fourth decade of its independence, Croatia is completing preparations for adopting the euro and achieving closer integration with the EU, he said.
“The adoption of the euro will be a key step for Croatia towards strengthening the competitiveness of the economy and greater economic sovereignty,” he said, adding that it was certainly in the interest of Croatia to share the same currency with its major trading partners.
PlenkoviÄ said Croatia’s decision to join is expected in mid-2022, and when Croatia joins the euro area six months later, currency risk and currency costs would disappear for businesses and citizens. , this would have a positive effect on exports and tourist arrivals from the euro zone and stimulate foreign investment.
He cited the example of Lithuania, which introduced the euro in 2015, claiming that since then gross wages have increased by 59% and prices by 10%.
In Croatia, between 2015 and 2020, gross wages increased by 21% and prices by 2.4%.
President dreams of Croatia losing its currency
President Zoran MilanoviÄ said that besides the Croatian army, the HNB was the institution that had done a good job during these 30 years, while everything else, including the courts, the prosecutor’s office of the The state, and all governments, had its ups and, unfortunately, lower ones.
Regarding euro area membership, the President said he viewed Croatia losing its currency with a dose of nostalgia.
He said the decision to adopt the euro was a political one and would be good for the economy due to its structure, including the high share of services and tourism.
However, he added, Hungary, the Czech Republic and Poland have not introduced the euro and, with good arguments and the acceptance of their citizens, are showing trends and a clear direction to make the changes. things in their own way.
He said the Czech Republic borrowed cheaper and more favorably than some eurozone member states, wondering how to explain this. Therefore, he added, there shouldn’t be absolute views and there shouldn’t be dogmas.
The president said Lithuania was the only example of wage increases in the eurozone. On the other hand, he added, there are countries where wages are stagnating or even falling. The Italian economy has stagnated for 20 years and has never adjusted to the euro, he said.
Speaking of cryptocurrencies, MilanoviÄ said everything should be done to control this segment and ban it if necessary. “It’s terribly dangerous.”
He said the abolition of paper money was educationally bad because children have to see money to understand its value.
Proud governor of the central bank
The governor of the HNB, Boris VujÄiÄ, said he was proud that they had built such an institution, stressing the real autonomy that the political authorities have granted it. With this autonomy, “we have succeeded in building an institution recognized around the world,” he said, adding that the HNB promotes excellence and competence.
Asked by the press if he too was nostalgic for the changes that joining the euro area would bring, VujÄiÄ said he was convinced it would benefit all citizens, which would prove important in the next crisis.
He said Croatia’s membership would be a new challenge for the HNB, which would retain all of its central bank functions except for decisions on monetary policy.
As for MilanoviÄ’s mention of the Czech Republic, VujÄiÄ said he would benefit from the introduction of the euro, but much less than Croatia because it is much less EuroisÃ©e.
Asked about cryptocurrencies, he said everyone should be aware of the risks and advised extreme caution “because it is an absolutely speculative type of investment. It is not money that replaces it. ‘money issued by central banks’.
Finance Minister Zdravko MariÄ told reporters he disagreed with the president’s claim that Lithuania may be the only positive example of adopting the euro, saying the Slovenia, the Baltic States, Cyprus and Malta had benefited from it.
Deputy Speaker of Parliament Å½eljko Reiner recalled that the kuna was introduced as the national currency on May 30, 1994, replacing the dinar, but said Croatia has aspired to European monetary integration since 1991.
He noted that the euro coins will have Croatian designs, including the marten (kuna) on the â¬ 1 coin.
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