Speaking in London earlier this week, the Governor of the Croatian National Bank, Boris Vujcic, has said that Croatia has nothing to lose by joining the euro zone and wants them to join it as soon as possible.
Vujcic said that joining the single currency was in Croatia’s best interests because monetary policy in Croatia already lacked independence and was constrained by the high level of euros used in the country.
“I always quote the Bob Dylan song ‘When you ain’t got nothing, you got nothing to lose’. If you don’t have independent monetary policy what are you going to lose by entering into the monetary union?” said.Vujcic.
By joining the European Union, Croatia is required to adopt the euro currency, but no time frame is put on the move. Sweden, which has been a member state for the last 20 years is still yet to adopt the single currency, as to are nations such as Poland and Hungary. The UK and Denmark signed ‘opt-out’ deals.
Vujcic, who has been in the Governor’s job for close to one year, said Croatia’s first step towards joining the single currency would be to first enter the European Exchange Rate Mechanism, a semi-pegged currency trading regime, which is a precondition for joining the euro zone. It would have to participate in the ERM for at least two years before it could join the euro zone.