5 ms·

Adopting the euro in the current incomplete state of the EU's financial and economic integration is a fairly risky business as other countries found out the har

Adopting the euro in the current incomplete state of the EU's financial and economic integration is a fairly risky business as other countries found out the hard way Croatians probably bet that the EU will - eventually - deliver on its promises. Its not a crazy assumption. The repeated existential crises might convince Europeans of their joint destiny. The result could be a prosperous, peaceful continent that is a role model for how people can coexist. Welcome. 2023 starts with some good karma.

WesternWind 4y ago
I mean entering into the passport free zone seems like it opens up a lot of opportunities.
- dkjaudyeqooe 4y ago
  Mostly it means avoiding hours-long tailbacks at border crossings for tourists. Not having to deal with surly border guards is also a significant bonus.
  - Scoundreller 4y ago
    heh, driving into Croatia. Hand over passports to the first guy, answer a few questions and we drive off. See guy in the rear-view yelling and waving his arms at us. Turns out that immigration is at the booth, then the guy standing around ahead is the customs guy you're supposed pull ahead and stop for. Oops. Looking forward to using some of the "EU traffic only" backroads crossings into Croatia that were inaccessible to me.
- bootsmann 4y ago
  Keep in mind that Schengen mostly affects visa-free tourism. The EUs single market freedom of movement (which massively expands opportunities) is a different, unrelated concept.
  - PeterisP 4y ago
    Yes, and Croatia is a nice target for tourism from its northern EU neighbors, so reducing friction for that is a boost to economy.
    - jq-r 4y ago
      Thats true. Albeit, having 20% of your GDP depending on tourism is a not a great situation to be in.
- tick_tock_tick 4y ago
  You can do one without the other.
- Scoundreller 4y ago
  On the downside, if you're a long-term tourist inside Schengen, your 90 day limit over last 180d rolling window now includes Croatia. Can't "earn" more days in Schengen by spending time in Croatia. Hopefully nobody asks for proof of all my "visits" to Andorra ;)
dkjaudyeqooe 4y ago
Croatia has effectively adopted the euro for decades. Most property (and other large) transactions are executed in euros and people have taken out loans in euros. The Croatian central bank understands that a good chunk of the economy already works in euros and has had a policy of keeping the kuna steady with the euro, even before it was required. The biggest differences besides the different banknotes is that exchange rate risk has been eliminated, interest rates have gone down and Croatia's credit rating has gone up.
- gghhzzgghhzz 4y ago
  > The biggest differences besides the different banknotes is that exchange rate risk has been eliminated, interest rates have gone down and Croatia's credit rating has gone up. I'm not suggesting for one minute that Croatia now is in the same state as Greece was 20 years ago. but improved credit rating based on the idea that the currency is effectively backed by the German and French economy, was one of the reasons for the debt crisis. German and French banks loaned them money that they shouldn't have, knowing that they would get bailed out. Good luck to them though. It seems to have a similar population size to Scotland, so is interesting in terms of the independence debate in the UK.
  - dkjaudyeqooe 4y ago
    The improved credit profile is due to the positives of have the same currency as your major economic partners, also because Croatia cannot unilaterally devalue the euro. Croatia has a good credit rating because it's shown fiscal restraint, but for the given good work it's done on it's fiscal position, it's now getting an even lower rate.If Croatians started acting like Greece, that wouldn't be the case. Investors have learned their lesson.
gghhzzgghhzz 4y ago
20 waisted years in my humble opinion. When EU countries could have been forging ahead, building on the natural base of social democracy and technological advancement, e.g. to become world leaders in future energy . Instead they have spend 20 years dealing with the internal inconsistencies and self imposed limitations of a single currency without a single fiscal / monetary policy. I don't see it changing, but who knows. EDIT. I do wish people would post counterpoint, rather than vote down something that I explicitly stated was my own humble opinion, and indeed ended on a conciliatory sentence. Down votes really should be used for trolling, or off topic to the poster they are replying to, not as a lazy way of replying.
- andrepd 4y ago
  The single currency was an enormous boon to surplus countries (i.e. net exporters) and an enormous detriment to deficit countries. Couple to that the atrocious, almost criminal handling of the Eurozone crisis.
  - jacquesm 4y ago
    Nonsense. The countries that are in line for this will peg their currency to the euro just like NL did before the euro with the German Mark. If anything the local population that does not yet have the euro for everything is being scalped by their banks: debts are in euros but income is in the much weaker local currency. Most of them can't wait to switch but the access criteria are still fairly strict. Yes, the exporters also have a benefit: mostly because of the enlargement of the single market. But this is still within Europe, the comparison should be with the countries outside of Europe and then suddenly being part of a larger trade bloc with a single currency is a huge advantage.
deleted 4y ago
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WesternWind 4y ago

I mean entering into the passport free zone seems like it opens up a lot of opportunities.

dkjaudyeqooe 4y ago
Mostly it means avoiding hours-long tailbacks at border crossings for tourists. Not having to deal with surly border guards is also a significant bonus.
- Scoundreller 4y ago
  heh, driving into Croatia. Hand over passports to the first guy, answer a few questions and we drive off. See guy in the rear-view yelling and waving his arms at us. Turns out that immigration is at the booth, then the guy standing around ahead is the customs guy you're supposed pull ahead and stop for. Oops. Looking forward to using some of the "EU traffic only" backroads crossings into Croatia that were inaccessible to me.
bootsmann 4y ago
Keep in mind that Schengen mostly affects visa-free tourism. The EUs single market freedom of movement (which massively expands opportunities) is a different, unrelated concept.
- PeterisP 4y ago
  Yes, and Croatia is a nice target for tourism from its northern EU neighbors, so reducing friction for that is a boost to economy.
  - jq-r 4y ago
    Thats true. Albeit, having 20% of your GDP depending on tourism is a not a great situation to be in.
tick_tock_tick 4y ago
You can do one without the other.
Scoundreller 4y ago
On the downside, if you're a long-term tourist inside Schengen, your 90 day limit over last 180d rolling window now includes Croatia. Can't "earn" more days in Schengen by spending time in Croatia. Hopefully nobody asks for proof of all my "visits" to Andorra ;)

dkjaudyeqooe 4y ago

Croatia has effectively adopted the euro for decades. Most property (and other large) transactions are executed in euros and people have taken out loans in euros. The Croatian central bank understands that a good chunk of the economy already works in euros and has had a policy of keeping the kuna steady with the euro, even before it was required. The biggest differences besides the different banknotes is that exchange rate risk has been eliminated, interest rates have gone down and Croatia's credit rating has gone up.

gghhzzgghhzz 4y ago
> The biggest differences besides the different banknotes is that exchange rate risk has been eliminated, interest rates have gone down and Croatia's credit rating has gone up. I'm not suggesting for one minute that Croatia now is in the same state as Greece was 20 years ago. but improved credit rating based on the idea that the currency is effectively backed by the German and French economy, was one of the reasons for the debt crisis. German and French banks loaned them money that they shouldn't have, knowing that they would get bailed out. Good luck to them though. It seems to have a similar population size to Scotland, so is interesting in terms of the independence debate in the UK.
- dkjaudyeqooe 4y ago
  The improved credit profile is due to the positives of have the same currency as your major economic partners, also because Croatia cannot unilaterally devalue the euro. Croatia has a good credit rating because it's shown fiscal restraint, but for the given good work it's done on it's fiscal position, it's now getting an even lower rate.If Croatians started acting like Greece, that wouldn't be the case. Investors have learned their lesson.

gghhzzgghhzz 4y ago

20 waisted years in my humble opinion. When EU countries could have been forging ahead, building on the natural base of social democracy and technological advancement, e.g. to become world leaders in future energy . Instead they have spend 20 years dealing with the internal inconsistencies and self imposed limitations of a single currency without a single fiscal / monetary policy. I don't see it changing, but who knows. EDIT. I do wish people would post counterpoint, rather than vote down something that I explicitly stated was my own humble opinion, and indeed ended on a conciliatory sentence. Down votes really should be used for trolling, or off topic to the poster they are replying to, not as a lazy way of replying.

andrepd 4y ago
The single currency was an enormous boon to surplus countries (i.e. net exporters) and an enormous detriment to deficit countries. Couple to that the atrocious, almost criminal handling of the Eurozone crisis.
- jacquesm 4y ago
  Nonsense. The countries that are in line for this will peg their currency to the euro just like NL did before the euro with the German Mark. If anything the local population that does not yet have the euro for everything is being scalped by their banks: debts are in euros but income is in the much weaker local currency. Most of them can't wait to switch but the access criteria are still fairly strict. Yes, the exporters also have a benefit: mostly because of the enlargement of the single market. But this is still within Europe, the comparison should be with the countries outside of Europe and then suddenly being part of a larger trade bloc with a single currency is a huge advantage.

deleted 4y ago

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