After using Kuna for 28 years, starting January 1st, 2023, Croatia has introduced Euro as an official currency. This is indeed one of the turning points in recent Croatian history because it concerns all of us and it will have significant impact on how life and work in Croatia will look like in times ahead.
Pros and cons
There were a lot of mixed emotions with Croatia’s decision to leave its currency and become part of the eurozone, but when we put emotions aside, it seems there are more pros than cons when it comes to the nature of this decision. In fact, it’s hard to write any solid con against implementing Euro and there are more reasons for this.
What do experts say?
As Croatian economist Velimir Šonje explained it couple of years ago, Kuna never fulfilled its purpose as a real currency. It was never entirely a measure of value for different things – e.g., Croatians were used to measure value in Kuna only for things that don’t worth much like different consumer goods such as food or books. However, when you were looking for value of cars, yachts or real estate, it was almost always displayed in Euro. Even more basic stuff, like apartment rent prices were alike mostly displayed in Euro. In our yachting business we noticed this even more – our yacht charter pricelists have been displayed in Euro from the very implementation of Euro itself. Even before Euro existed, it was common to display prices of more expensive things in Croatia in German Marks. Another reason why Kuna never fulfilled its purpose reflects in a fact that only around 1/3 of savings were made in Kuna, while the remaining was in different foreign currencies.
With implementation of Euro as an official currency, things for companies in Croatia are changing as well. There is no more currency clause, currency risk or conversion costs. All of the mentioned is expected to have positive impact on trade and investments.
Getting used to Euro
When it comes to everyday life, implementing Euro will make it easier for Croatian citizens to compare prices in Croatia with prices in other eurozone country members. It will also be easier for tourists who arrive in Croatia. Majority of tourism arrivals is from EU market so it will be a big advantage for tourists to make payments in the currency they’re used to and compare prices. Furthermore, there will be no dealing with exchange offices and it’s no secret some of them used to have dubious practices in their business.
For Croatian citizens some challenges remain – ratio between Kuna and Euro was 7,53 Kuna for 1 Euro. That means we used to pay 75 Kuna for something that now costs us 10 Euro. This means that one unit worths now 7,5 times more than before and it will take some time before everyone in Croatia gets used to this.
Memories last forever
Despite Kuna being past now, sentiments for it will remain. It was implemented in the time of war and related to Croatia being independent country. So, in a way, Kuna will remain with us. Not only in our collective memory, but also in everyday speech. Some phrases that have word Kuna are still being used and will be used for a long period of time ahead. When everything is said and done, we see Euro implementation as a pragmatic decision that will make our lives easier in a long run.