Croatia has the support of the European Commission (EC) on its journey to the euro zone, not just politically, but also through a programme of structural reforms, said the EC Vice-President for the Euro and Social Dialogue, Valdis Dombrovskis, on Monday, adding that 2018 was, economically, a good year for Croatia.

The EC can provide help, both technical and financial, to countries who are in the process of introducing the euro, Dombrovskis, who is on a two-day working visit to Croatia, said after a meeting with Prime Minister Andrej Plenkovic and cabinet ministers.

The government had announced it intended to join the Exchange Rate Mechanism (ERM II) in 2020, as a step towards introducing the euro, he said.

The ERM II is a system created in 1999 to ensure that exchange rate fluctuations between the euro and other currencies in the European Union do not endanger the stability of the single market, as well as to prepare potential euro zone members participating in the euro zone. Countries usually spend two years in ERM II, but the process may take longer than that.

Dombrovskis said structural reforms were necessary, not just for joining the euro zone, but for participating in it successfully, adding that countries which intend to join must show a certain economic resilience.

He welcomed the reforms which have been launched, including the pension and education reforms, the strengthening of the financial sector, and efforts to reduce non-performing loans, to bolster the financial situation and sustainable economic growth.

Finance Minister Zdravko Maric said the government was aware of the job ahead, such as dealing with high unemployment rates.

Agriculture Minister Tomislav Tolusic said Croatia “is doing its job, with which the European Commission is happy.”

A year ago, the government and the Croatian central bank (HNB) launched a document on the strategy for the adoption of the euro.

Prime Minister Plenkovic had said then that his cabinet had set two important goals: joining the passport-free Schengen zone, and the euro zone. The target was to enter ERM II in 2020, when Croatia will hold the rotating six-month EU presidency.

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