European Central Bank President Christine Lagarde said on Tuesday that the beginning of 2023 was a historic moment not just for Croatia, but for Europe as well.

Speaking in a video message to a conference in Zagreb on Croatia’s joining the euro zone, Lagarde said that Croatia’s entry testified to the efforts made by the country.

Croatia carried out all the necessary economic and legal reforms and met all the requirements, including resolution of the issue of macroeconomic imbalances and reforms related to the labour market and business environment, she said.

The results were impressive, Lagarde told the conference, jointly organised by the Croatian government and central bank.

Speaking of Croatia’s convergence towards the euro area, she said that Croatia’s GDP per capita had increased from about 55% of the euro area average in 2012 to over 70% only a decade later.

The conference was also addressed by Valdis Dombrovskis, Executive Vice President of the European Commission for an Economy that Works for People, and Paolo Gentiloni, European Commissioner for Economy.

Dombrovskis said it was important for Croatia to make the most of its euro area membership, maintain growth rates and attract more investment. He mentioned high inflation as an additional challenge which other countries did not have to address when joining the euro area.

Some may use euro area accession to unduly increase their prices and public concern in that regard is understandable, he said and added that in the Commission’s opinion the Croatian authorities took effective measures to reduce the risk of such phenomena, including a dual display of prices.

Gentiloni said that Croatia’s accession to the euro area and the Schengen passport-free travel area was a great achievement, notably in light of the fact that the country was at war 30 years ago.

Membership of the Schengen and euro areas will also boost the Croatian tourism sector by facilitating trade and travel, Gentiloni said.