By joining the euro area on 1 January 2023, Croatia will also become a member of the European Stability Mechanism (ESM), the euro area’s permanent rescue fund, once it has completed the necessary administrative and financial procedures.
The ESM, which approved Croatia’s application on Monday 5 December, said the Croatian authorities will have to subscribe to the fund’s capital of €3.695 billion, of which €422.29 million is paid-in capital to be paid in five instalments.
As a country whose GDP is less than 75% of the European average, Croatia will benefit for twelve years from a correction mechanism, from which several predecessor countries have benefited (Slovenia, Slovakia, Malta) or still benefit (Estonia, Latvia, Lithuania). This mechanism will allow Zagreb to reduce its contribution by fixing it at the above-mentioned amounts.
With the accession of a twentieth country to the euro area, the subscribed capital of the ESM will amount to €708.4937 billion in 2023.
On Monday, the ESM decided that the key for calculating the contributions of euro area countries to the capital of the ESM would be adjusted when a new country joins the euro area, potentially Bulgaria, or at the latest in early 2026 when the correction mechanism for Latvia ends. This update will be based on the most recent ECB capital calculation method. (Original version in French by Mathieu Bion)