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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 euro
by 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 agoThe 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.