The March 2021 edition of the IRMO Brief, authored by Kristojan Kotarski, PhD, analyses the process of euro adoption in Croatia and how it can be leveraged to achieve real and structural economic convergence of its economy. Short-term emphasis on fulfilling the nominal convergence criteria that are indispensible for euro membership won’t be the end of this process. In that regard, this policy-brief advocates the implementation of a list of structural reforms that are essential to avoid the Greek and Italian scenario of short-term nominal and real convergence, followed by long-term real and structural divergence due to lagging productivity and innovation-related indicators vis-à-vis the eurozone’s core. The Croatia has a historic opportunity to use €22 billion euro financial package approved by EU in the aftermath of a coronavirus outbreak, in order to structurally transform its economy and stem both the flow of worrisome emigration and of rapid deterioration of social security systems.
The Impact of COVID-19 on Croatia’s Euro Adoption Strategy
