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Croatia and the Euro: A Fickle Love Story

Croatia, the youngest member of the European Union and one of its poorest member states, joined the ERM II mechanism in July 2020 and is about to join the eurozone in January 2023. The government, led by the Croatian Democratic Union (EPP member) places great policy attention on this endeavour. Both left-wing, such as the Social Democratic Party (S&D member) and the green-left We Can! platform, as well as right-wing opposition parties, such as the socially conservative Bridge of Independent Lists and the nationalist Homeland Movement, are reluctant to support quick adoption of the euro, claiming that the national economy is too weak to participate in the monetary union. Croatian Sovereignists, a Eurosceptic party affiliated with the European Conservatives and Reformists, tried to initiate a referendum on the status of the national currency in late 2021, yet failed to collect enough citizen signatures. While Croatia has a small, open economy which is already deeply euroized due to tourism, remittances, and trade with other eurozone member states, such as Slovenia, Austria, Italy, and Germany, and while property and car prices are already quoted in euros ; according to Eurobarometer surveys, public support for the adoption of the common European currency has been steadily dropping. The aim of this paper is to examine the factors influencing the opinion of Croatian citizens on the adoption of the euro. The analysis relies on regression models based on data obtained through a nationally representative face-to-face survey conducted in October 2021. In 2021, apart from the economic recession caused by the COVID-19 pandemic, Croatia was hit by two devastating earthquakes, prompting allocation of emergency relief funds by the EU. At the same time, the country has seen a significant rise in inflation of the domestic currency (kuna), which was already largely pegged to the euro before the entrance into the ERM II mechanism. The analysis of factors influencing citizen opinions on euro adoption will enable a better understanding of the interplay of European and national politics within the specific context of a new and small EU member state and expand insight in the role the monetary union plays in citizen opinions on the European Union.

Croatia, eurozone, EU, public opinion, Euroscepticism

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