“The relatively low vaccination rate in Croatia” - 50.8% of the adult population, according to the ECDC - represents “a risk” for the country’s economic recovery, European Commission Vice-President Valdis Dombrovskis said on Monday 13 September at a conference on the introduction of the euro in Zagreb.
He did not rule out the need for some EU Member States to establish further restrictions or even a lockdown, if the health situation due to the Covid-19 pandemic deteriorates. “If this were to happen in Croatia, it would weigh on the pace of the recovery and potentially aggravate economic imbalances and vulnerabilities, particularly public debt and non-performing loans”, said Dombrovskis, who believes such a scenario would have a negative impact on Croatia’s 2023 target for adopting the single currency.
As Zagreb was allowed to start preparations for minting euros (see EUROPE 12788/2), Mr Dombrovskis recalled the benefits and conditions of membership of the economic and monetary union. In particular, he stressed the importance of closely monitoring price developments and educating the public.
Although 61% of Croatians approve of the changeover to the single currency, 86% of them fear high inflation when the kuna is switched to the euro, according to a Eurobarometer survey.
On the Croatian recovery plan under the Next Generation EU Recovery Plan, Dombrovskis noted that Croatia is the EU country that will receive the most aid relative to the size of the national economy, with €6.3 billion in grants or “11.6% of GDP”. According to him, if the authorities implement the reforms and investments included in the Croatian plan, the wealth produced in the country in 2026 could be up to 2.9% of national GDP higher than in a scenario without the stimulus plan. (Original version in French by Mathieu Bion)