Croatia Far from Adopting the Euro

The European Union is considering the possibility of introducing the euro in seven countries: Bulgaria, the Czech Republic, Croatia, Hungary, Poland, Romania, and Sweden, writes Patria.

Is an expansion of the Economic and Monetary Union possible?

It turns out that none of these countries meet all the obligations set out in the treaty. The key criterion is the legal compliance of the statutory requirements that central banks must meet.

Regarding inflation in these countries, the European Union is concerned in the long term, after the increase in oil prices began.

Another, the most important problem is the fiscal deficit. In 2015, in six countries included in the research, the GDP deficit was below 3 percent. An exception is Croatia, which is still subject to an excessive deficit procedure. Considering the general government debt, Croatia and Hungary were the only countries with debt above 60 percent of GDP. In Croatia, the debt ratio has increased since 2013, while in Hungary it has slightly decreased.

In none of the seven countries surveyed is the legal framework fully compatible with all the requirements for the introduction of the euro. The biggest condition is the complete independence of central banks, their institutional and financial independence, writes Patria.