The Croatian National Bank (HNB) governor Boris Vujcic said on Friday that it was a myth that the adoption of the euro would trigger price hikes.

“The fact is that prices will be higher 20 years after that (the euro adoption), and they would be higher in any case, as they are also higher than they were 20 years ago,” Vujcic said at a conference on Croatia’s chairmanship of the European Union in the first half of 2020, organised by the Zagreb-based Vecernji List daily newspaper.

He said Croatia’s admission to the euro area would not change anything drastically, considering the sovereignty of the economic policy, since “the largest part of sovereignty remains in our hands.”

The benefits of the introduction of the euro as the sole legal tender are considerably higher than the costs, in the short-term and in the long-term. He also noted the costs for the introduction of the euro as the national currency were mainly one-off.

He said that entering the European Exchange Rate Mechanism II would mean entering into the single system of supervision in the euro area and also entrance into the mechanism of the Single Resolution Board.

“This means that Croatia can practically expect that it will be in what we call the banking union. Before we enter the euro area, we need to enter the banking union,” the governor said, adding that this could happen as soon as next year.