Good Planning Leads to a Smooth Transition for Croatia

Croatia joined the Eurozone on 1 January 2023, bringing the number of European Union (EU) member states using the single European currency to 20.

The European Commission (EC) is monitoring the change. A survey a week into the new year found 51% of cash payments in shops were made in euros on 5 January and 93% of change handed out was in euros.

According to the Croatian National Bank (CNB), meanwhile, the main part of the euro changeover process ended smoothly, in line with the plan and without major difficulties. By 19 January, some 443 million kuna coins (40% of the estimated quantity) had been returned, plus 326 million kuna banknotes (65% of the estimated total).

The smooth changeover has been helped by the issue of euro coins and banknotes starting in December 2022. During the so-called frontloading period, banks were supplied with a total of €1.3 billion, which includes the value of euro coin starter kits. This equated to 627 million coins and 346 million banknotes, issued not just for the purpose of frontloading, but also for supply in 2023. By the end of the month, a third of coins and 55% of kuna notes had already been exchanged for euros.

Drawing on the experience of countries that have already adopted the euro as their national currency, the CNB expects the return of some 1.1 billion kuna coins and more than 500 million kuna banknotes (about 320 million from circulation, the rest from bank vaults and strategic reserves) during the changeover.

After withdrawal, kuna coins will be kept in a prefabricated warehouse in a military compound in Zagreb until the expiry of the three-year period designated for exchange, after that they will be sold as secondary raw material.

Kuna cash can be exchanged for euro notes and coins at the fixed conversion rate for 12 months, ie. to 31 December 2023. During this period, a maximum of 100 kuna coins and 100 banknotes can be exchanged free of charge at bank and post office branches. From next January, the exchange will only be possible at the CNB, but still free of charge.

It will be possible to exchange kuna banknotes for an unlimited period, but the exchange of kuna coins is only allowed for three years, ie. up until 31 December 2025.

The official changeover period ended on 14 January, with all transactions now conducted in euros only. One concern was that businesses might take advantage of the changeover to push up prices. From 5 September all businesses have had to show prices in both euro and kuna. This requirement will remain in place throughout 2023.