Croatia to officially join Eurozone from January 1, 2023

Europe: After almost a decade of being a member of the European Union, Croatia will officially join the Eurozone, i.e. officiating Euro as their currency, from January 1, 2023. The Eurozone is the currency union of 19 member states of the European Union, which include Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, the Netherlands, Greece, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, , Portugal, Slovakia, Slovenia and Spain. Croatia will become the 20th member country with Euro as its currency.

Other than these countries, there are various countries which haven’t yet adopted Euro as their currency. These countries consist of member states which acceded to the union in 2004, 2007 and 2013 following the launch of the Euro in 2002. Countries include Bulgaria, Croatia, Czechia, Hungary, Poland, Romania and Sweden. These countries can join the Eurozone once they meet the necessarily required conditions.  

Notably, In 2022, the Euro coins and banknotes celebrated their 20th anniversary, having been introduced on January 1, 2002. The day marked the world’s largest-ever money changeover, with 12 countries being a part of it.

At the same time, Denmark is the country to have opted out of the Eurozone.

Benefits of Eurozone

The Euro is the world’s second most important currency in the world, after the US Dollar. More than 347 million citizens in the world use Euro as their official currency.

 The adoption of the ‘Euro’ as the common currency among the EU member nations is highly beneficial for the citizens across the member countries. The Euro makes it easier to save and invest in financial institutions. 

The ease of conducting business with a common currency is another major benefit as individuals get a common medium of exchange, making transactions convenient.

Since the countries have increasingly indulged in work and study-related travels, a common currency rules out the majority of monetary hassles. 

How Countries Join

The fulfilment of ‘Convergence criteria’ that entails agreeing on economic and legal conditions in the Maastricht Treaty in 1992 is required to join Eurozone. All countries, excluding Denmark and the United Kingdom, have agreed on these conditions.

The European Commission and the European Central Bank make a joint decision on the conditions being met. Tracking the progress as per the convergence criteria, the respective bodies publish a report to be ratified by ECOFIN Council, following which the adoption process may commence.