A SMALL GUIDE TO ENTERING THE EUROZONE: How We Overnight Lost the Strongest Currency in the World

It is estimated that the exchange rate of the kuna, which is retiring after all these years, was at least 10 percent overvalued, which benefited importers and made exports more difficult. The exchange rate injustice became so notorious that even the most hardened exporters stopped complaining and accepted it as a necessary evil. However, the true strength of the Croatian currency was demonstrated during privatization, when skilled entrepreneurs close to the authorities could buy an entire factory for just one kuna. Thus, we overnight lost the strongest currency in the world. In the first second of this year, we also lost monetary sovereignty, but we did not feel it because we had not used it until now.

The kuna was firmly tied to the euro – in the last five years, the exchange rate fluctuated by 1.6 percent up and down, and in the last year by only about 0.7 percent. This connection enabled the breaking of hyperinflation in 1994, but limited the fight against current price increases that the entire eurozone is feeling.

The transition to the euro is marked by price increases. The infamous ‘rounding‘ of prices has caused the price of bread in some places to jump from seven kunas to one euro, a pack of cigarettes is 30 to 40 lipa more expensive. Retail chains are fishing in troubled waters. Butter sold for 2.89 euros (21.77 kunas) recently had a price of 13.59 kunas. Another chain boasted that it rounded all prices in euros down, but immediately faced accusations that it had raised some prices by about 20 percent just a few days ago. The Prime Minister angrily tweets and lines up inspectors, while his small economy minister summons traders and threatens blacklists and price freezes. The inspectors readily respond and boast that they have discovered 51 cases of selling food products above the maximum allowed price. The state has also prescribed fines of up to 100,000 euros for legal entities and up to 1,320 euros for individuals who do not comply with the Law on the Introduction of the Euro.

Unfortunately, the state did not want to timely introduce any register of prices for goods and services (with a historical overview), nor even a blacklist of traders who raise prices, which has proven particularly effective in Slovenia. Therefore, the culprits for the fraud are not (only) the traders, but (also) the authorities.

In any case, my third former currency – after the dinar and the Croatian dinar – the kuna, is therefore dead, long live the euro! The adjustment will be simpler due to the high degree of euroization of the domestic economy. Entrepreneurs and managers have already calculated everything in euros – especially those in the global market, such as exporters and importers. And we have all calculated large purchases in euros until now – primarily residential square meters and car prices. From Sunday, we will also convert those smaller, everyday expenses into euros – from bread, milk, and coffee to utilities.

We are also getting used to the new coins and banknotes. We are getting accustomed to thicker and heavier wallets. One euro weighs 50 percent more than one kuna – the euro weighs 7.5 grams, while the kuna weighs five grams. However, the difference in value is as much as 7.5345 times, so we will certainly use coins more, which will no longer be considered small change, as we have called it until now.

Croatian euro coins have been in the spotlight since the fiasco with the competition canceled due to a plagiarized motif. The banknotes, on the other hand, are unique, in denominations of 5, 10, 20, 50, 100, 200, and 500 euros. However, the most valuable banknote is no longer printed and is being withdrawn from circulation due to the risk of counterfeiting, but it is still valid today, so there is a possibility that we will encounter it as well. Euro banknotes are similar in size to kuna banknotes. However, until now we had recognizable denominations – portraits of Zrinski and Frankopan on the face of the five kuna banknote, and Varaždin on the reverse. There are Juraj Dobrila and the Pula Arena (10 kuna), Ban Jelačić and Eltz Castle with the Vukovar Dove (20 kuna), Gundulić and Dubrovnik (50 kuna), Mažuranić and Rijeka (100 kuna), Radić and Osijek (200 kuna), Marulić and Split’s Diocletian’s Palace (500 kuna), and Starčević and Zagreb motifs of the cathedral and the monument to King Tomislav (1000 kuna).

Instead, euros have stylized motifs on the face and reverse that collide with historical architectural periods. Thus, these days we are exchanging one Marulić, Radić, and Gundulić for a single somewhat sterile greenish banknote that is supposed to evoke the period of Baroque and Rococo.