EU finance ministers on Tuesday gave Croatia the final green light to adopt the euro single currency on January 1, reported DW, quoting news agencies AFP and dpa.
"I would like to congratulate my counterpart, Zdravko Maric, and the whole of Croatia for becoming the 20th country to join the euro area," said Zbynek Stanjura, the finance minister of the Czech Republic, which holds the EU's rotating presidency.
"European integration is ongoing despite all the challenges that we are facing," Croatian Finance Minister Maric said.
Croatia's switch from the kuna to the euro in 2023 will come less than a decade after the former Yugoslav republic joined the EU.
One of the adopted legal acts sets the conversion rate between the euro and the Croatian kuna at 7.53450 kunas per €1.
Difficult moment for euro
The newest member joins the eurozone at a difficult moment, with the euro falling to parity with the US dollar, a symptom of a looming cost-of-living crisis in the grouping's economy.
Despite the "very strong challenges" of high inflation and dented economic growth in the European Union, Maric said before the meeting that he is pleased to see Croatia switch to the euro.
Croatia met strict conditions, including keeping inflation in the same range as its EU peers, as well as embracing sound public spending.
Like the citizens of euro-adopting countries before them, many Croatians fear that the introduction of the euro will lead to a hike in prices and, in particular, that businesses will round prices up when they convert from the kuna.
Euro is not for all
Countries that join the euro are required to meet a set of economic conditions, including a low government deficit and stable inflation and exchange rates between their national currencies and the euro.
"It's a wonderful club to be a member of, but it requires commitment, dedication, continued respect of the rules, and I know that we can expect no less from Croatia," said Christine Lagarde, president of the European Central Bank.
Lithuania was the last EU member to adopt the euro in 2015, and Bulgaria is the next in line to join the eurozone. The Balkan country has stated its willingness to adopt it as of January 1, 2024.
Denmark, a member of the bloc prior to the 1992 signing of the European treaty that laid the foundation for the euro, is the only country that secured the right to keep its currency, the krone.
Other EU countries yet to adopt the currency include Poland and Hungary. Sweden abandoned plans to join the eurozone after a referendum failed to receive the public's support.