Croatia could enter the European Exchange Rate Mechanism in the second half of 2020, according to the European Commissioner for the Euro and Social Dialogue Valdis Dombrovskis.

Speaking at a conference entitled “The future of the Eurozone as a currency union - Croatia on the path to the Euro” on Friday 22 November, the Commissioner stated that entry into the Eurozone was a huge challenge for Croatia but that those efforts would pay off in terms of greater stability, opportunities and prosperity.

Croatia still needs to fulfil 19 measures in six various areas which it undertook to do in a letter of intent for membership of ERM II and the banking union. These measures are related to strengthening the capacity of the national statistics office, improving the business environment, state assets management, strengthening foundations for economic growth, etc.

Croatian National Bank Governor (HNB) Boris Vujcic said that the banking union was established with the aim of protecting taxpayers as much as possible from poor bank policies. He added that Croatia's accession to the common system of bank supervision was a precondition for entering the ERM II but that he did not consider it a major benefit in itself considering that, “Croatia has a very stable banking system, which is better capitalised than the euro area banking system.”