Croatia's Euro Accession: "Great Advantages for the Domestic Economy "
As of 1 January 2022, Croatia will officially become part of the euro area. This holds great opportunities for Austrian companies.
Christine Lagarde, Zdravko Marić, Croatian Deputy Prime Minister and Minister for Finance, Valdis Dombrovskis and Paolo Gentiloni. / Picture: © EU European Union
With the recently concluded agreement of the EU finance ministers, it is now fixed - Croatia will join the euro zone as of 1 January 2023. The last hurdle, the concrete exchange rate between the Croatian kuna and the euro, has now been finally fixed at 7.5345 kuna per euro.
This means that from now on nothing stands in the way of Croatia becoming the 20th country in which the euro is the official currency.
It’s official – Croatia will join the euro area as of 1 January 2023
— Christine Lagarde (@Lagarde) July 12, 2022
This outcome is the result of tremendous efforts by Croatia and its citizens to meet all the necessary economic and legal requirements.
Well done, Croatia! And welcome to the euro area! pic.twitter.com/JBlD0l3AR5
For Austria, this decision represents an enormous added value. Mariana Kühnel, Secretary General of the Austrian Federal Economic Chamber, speaks of great advantages for the Austrian economy: "The enlargement of the euro zone is a sign of European unity and common ground and is of great importance especially at this time. In future, 20 of 27 EU countries will pay with the euro. This brings great advantages for the domestic economy."
For Austrian companies operating in Croatia, this means that in future they will no longer have to pay the inconvenient exchange charges and thus save on currency hedging against currency devaluation.
"For our economic operators, this also means significantly less uncertainty, because the danger of currency speculation decreases," explains Kühnel.
For domestic businesses, this means an enormous gain in opportunities in practically all sectors.
"For example, in the tourism industry, numerous opportunities are opening up for Austrian companies - on the one hand for investments and project participation, and on the other hand for subcontracting, which we as the Chamber of Commerce also support as pioneers and companions.
There are also some orders to be won in the ongoing expansion of the Croatian infrastructure. And the Croatian IT sector is recording annual growth rates of up to 10 %," Kühnel emphasises in conclusion.
Croatia's and Austria's economic relations
After heavy losses during the Corona pandemic, trade relations between the two countries are steadily recovering. The year 2021, for example, brought a strong increase of more than 21% in goods exports from Austria to Croatia.
In services, Croatia is clearly ahead of Austria. Unsurprisingly, this is due to the fact that Croatia is an extremely popular tourist destination and Austria clearly draws the short straw in summer tourism.
The bilateral foreign trade volume amounts to almost 2 billion euros and the exchange of services of around 1.8 billion euros ensure that Croatia and Austria are strongly intertwined economically. Austria is the second largest investor in Croatia and branches of domestic companies are present in all sectors.
About 800 Austrian branches in almost all sectors offer numerous Austrian points of contact. Among the 100 largest companies in Croatia there are also some Austrian branches, including e.g. Spar, A1, Erste & Steiermärkische Bank, Raiffeisenbank, Boxmark, Valamar Riviera, XXX Lutz (Lesnina), Aluxflexpack or also Alca.
Austrian direct investments in Croatia reached around 5 billion euros at the end of 2021.