|Author (Corporate)||Cardiff EDC|
Overview and information relating to Croatia's intention to join the Exchange Rate Mechanism (ERM II) and the Banking Union, seen as a first stage to full accession to the Eurozone.
The Croatian authorities sent on 4 July 2019 a letter to the main European Union (EU) institutions setting out an Action Plan for joining the Exchange Rate Mechanism (ERM II) and the Banking Union. At the margins of a meeting held on 8 July, relevant stakeholders discussed the prospects of Croatia's participation in the Mechanism, and welcomed the intention of the Croatian authorities to put in place the necessary elements for a successful entry into ERM II.
Decision (EU) 2020/1016 was adopted on 24 June 2020 on the establishment of close cooperation between the European Central Bank and Hrvatska Narodna Banka (Croatian National Bank). This was published in the Official Journal on 13 July.
On 10 July 2020, relevant stakeholders agreed to include Croatia's national currency (kuna) in the ERM II. The central rate was set at €1 = 7.53450 kuna. The agreement was largely based on the commitment by Croatian authorities to join the Banking Union and ERM II simultaneously and the completion by the country of a set of measures, described in their 2019 letter of intent.
This was seen as an important milestone in the country's efforts to join the Eurozone. Croatia is required to participate in the mechanism without severe tensions and without devaluing their currency central rate against the euro on their own initiative, for at least two years before the country can qualify to adopt the common currency.
|Subject Categories||Economic and Financial Affairs|
|Subject Tags||Banking Union|
|Keywords||European Exchange Rate Mechanism [ERM | ERM II]
|Countries / Regions||Croatia|
|International Organisations||European Union [EU]|