Marić: It Is Difficult to Speculate on the Timelines for Introducing the Euro

Finance Minister Zdravko Marić stated on Wednesday that it is difficult to speculate on the timelines and frameworks within which Croatia could introduce the euro.

Marić made this statement to reporters in the Parliament, responding to a question about the realism of Prime Minister Tihomir Orešković’s announcement that Croatia could introduce the euro in just four years.

“By signing and joining the European Union, we also took on the obligation to introduce the euro when the criteria for that are met. What you have seen from the Government’s program, along with economic growth and employment, is a focus on consolidating the budget deficit and stabilizing, or reducing, public debt. These are precisely the two criteria that we do not meet at this moment. In that context, the Prime Minister’s statement was made. As for the timelines and frameworks themselves, it is difficult to speculate on that today. We have a lot to fulfill ahead of us, not only the Maastricht criteria but also to achieve the goal, which is stabilization and reduction of public debt,” said Marić.

He added that Croatia can think about introducing the euro after it meets those conditions and reminded that this is preceded by the so-called exchange rate mechanism, which requires a procedure lasting about two years. “In that context, the entire time horizon ahead of us should be considered,” Marić added.

When asked if this means that Croatia’s entry into the eurozone in 2020 is unrealistic, he replied that it is difficult to comment on whether that is realistic or not.

“So, certainly not before 2020. This means that we can start talking about the period after that,” said Marić.

Regarding the introduction of the euro and the draft state budget for RTL Television, HNB Governor Boris Vujčić spoke.

“To evaluate the budget, we first need to see how it will look in its entirety. For now, we only have guidelines according to which we do not know the final figures for 2015. This means we do not know the figures from which we start. Secondly, we do not know how the financing of the budget will look. What we know is the goal of freezing expenditures at the level from 2015, which, assuming GDP growth of around two percent, which is realistic at this moment, could mean a reduction of the budget deficit to three percent. As for public debt – growth or stabilization. It depends on these things that we still do not know.”

Regarding the euro, Vujčić said this: “We will not have the euro in four years. The Prime Minister and I have discussed this and this dynamics. What does this dynamics mean? This dynamics means that we must first show that Croatia is capable of credibly and sustainably reducing the share of public debt in GDP. So, if it stabilizes this year, in 2017 and 2018, that public debt must be significantly reduced to discuss with the European Commission in the exchange rate mechanism of the European Monetary Union. And we could if economic policy and these goals succeed by 2020. Then in the exchange rate mechanism, we must spend two years to meet those five criteria. The introduction of the euro before 2022 is difficult.”