Head of Croatia's Central Bank Visits Bulgaria: The Transition To The Euro Did Not Result In Price Hikes

Business » FINANCE | February 26, 2024, Monday // 14:10
Bulgaria: Head of Croatia's Central Bank Visits Bulgaria: The Transition To The Euro Did Not Result In Price Hikes

During his visit to Bulgaria, Croatian Central Bank Governor Boris Vujcic reassured that Croatia's transition to the euro did not result in a significant uptick in prices. Invited by Bulgaria's Parliamentary Committee on Eurozone and Schengen Affairs, Vujcic elaborated that the conversion from the kuna to the euro led to a marginal increase of only 0.2 percentage points, primarily within the service sector.

Vujcic underscored that across countries where the euro was adopted, prices typically saw a rise ranging from 0.2 to 0.4 percentage points. However, Croatia experienced a negligible impact, thanks to stringent monitoring and penalties imposed for any speculative price hikes by major retailers. Notably, only certain services, such as coffee shops and hairdressing, witnessed a slight upward trend, while overall living standards showed improvement since the euro's introduction, with incomes outpacing inflation.

Addressing concerns about Bulgaria's ability to manage inflation amid its Eurozone aspirations, Minister Asen Vassilev expressed optimism that the country would meet the necessary criteria for joining the Eurozone by 2025. Bulgarian National Bank Governor Dimitar Radev attributed Croatia's accelerated progress in Eurozone integration to a more favorable political climate, drawing a contrast with Bulgaria's political challenges post-2020.

Vujcic pointed out that Croatia had already replaced 60% of its national currency, the kuna, before January 1, 2023. Meanwhile, Radev provided updates on Bulgaria's preparations for euro adoption, including plans for cash centers and ongoing coordination with European institutions. However, the legislation pertaining to the euro's introduction has yet to be presented in Bulgaria's National Assembly, prompting concerns from retail chains awaiting regulatory clarity.

During Vujcic's hearing, representatives from "Vazrazhdane" and BSP were notably absent, signaling potential political divisions on the matter.

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Tags: euro, Croatia, Bulgaria, Central Bank

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