Croatia’s transition to the euro was not a sudden leap, but the result of a long process that started years before its official entry into the European Union. Even prior to EU membership in 2013, many Croatians were already using the euro in their daily lives - for savings, transactions, and price listings of real estate, vehicles, and housing. While the national currency remained the kuna, the euro was embedded in the economy well before the formal adoption.

In 2020, Croatia and Bulgaria simultaneously entered the ERM II mechanism—the so-called “waiting room” for the euro. With that step, both countries committed to meeting the necessary conditions to adopt the common European currency. The kuna, much like the Bulgarian lev, had already been pegged to the German mark and later to the euro, which laid a relatively stable groundwork for the shift.

Croatia fulfilled the eurozone criteria within just two years. The country started minting euro coins with national symbols, preparing for the full replacement of the kuna. On January 1, 2023, Croatia officially became the 20th member of the euro area.

The early months were not without difficulty. Sales staff recall confusion among customers, many of whom continued to think in kuna and struggled with mental conversions. “It took us about six months. Some still say one euro is one kuna, then ask how much two euros are,” says saleswoman Zemira, illustrating how ingrained the old currency remained.

The exchange was carried out at a fixed rate of 7.5 kuna to 1 euro - consistent with the long-standing exchange average used before the official transition. “It was hard to calculate at first, but we adapted. Customers were annoyed at first, but they got used to it too,” adds Alida, another retail worker.

According to the European Central Bank, the fears of price hikes were largely unfounded. Around 65% of product prices stayed the same post-transition. A quarter of prices even went down, while only about 10% saw an increase. The overall effect on inflation was deemed negligible. Meanwhile, Croatia’s GDP rose, mirroring growth trends typical in countries after euro adoption.

European Central Bank President Christine Lagarde framed the development in a wider context, describing the euro’s spread as a chance for Europe to assert greater influence globally and manage its economic path more independently.

Switching from the kuna to the euro cost Croatia an estimated 266 million euros, most of which was covered by the banking sector. But the investment appears to be paying off. Public sentiment toward the change is largely favorable, with 76% of surveyed Croatians reporting a positive impact, especially citing increased foreign investment driven by the euro’s stability.