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January 2023 will bring a new currency to a European holiday destination - tourists need to know that now

2023-01-02T10:05:01.565Z


January 2023 will bring a new currency to a European holiday destination - tourists need to know that now Created: 01/02/2023 10:53 am By: Ines Baur Croatia has been a euro and Schengen country since January 1, 2023. The euro replaces the old national currency, the kuna. © Armin Durgut/AP/dpa Over three million Germans spent their holidays in Croatia last year. On January 1, 2023, the Adriatic


January 2023 will bring a new currency to a European holiday destination - tourists need to know that now

Created: 01/02/2023 10:53 am

By: Ines Baur

Croatia has been a euro and Schengen country since January 1, 2023.

The euro replaces the old national currency, the kuna.

© Armin Durgut/AP/dpa

Over three million Germans spent their holidays in Croatia last year.

On January 1, 2023, the Adriatic state will join the Schengen area and the euro zone.

This brings some advantages for holiday guests.

Munich / dpa - At the turn of the year, the EU country Croatia introduced the euro instead of the previous national currency kuna.

In addition, the popular holiday destination is now a member of the border-free Schengen zone.

Reason for joy for holiday guests from Germany.

On the one hand, the annoying exchange of euros for holiday pay is becoming obsolete.

As a side effect, you save money because there are no processing fees and exchange rate losses when exchanging.

And then holidaymakers will probably be able to reach their holiday destination faster in the future.

Because the waiting time at the Slovenian-Croatian border crossings, which often lasted for hours, should no longer be necessary.

New currency in EU country can make traveling easier

EU Commission President Ursula von der Leyen, Slovenian President Natasa Pirc-Musar and Croatian Prime Minister Andrej Plenkovic met at the Croatian-Slovenian border crossing at Bregana on Sunday afternoon.

Twelve hours earlier, the border police stopped checking there and at the other crossings to Slovenia and Hungary.

"Travel without barriers will bring communities even closer together," von der Leyen wrote on Twitter. 

The European Central Bank (ECB) welcomed Croatia as a new member of the euro area on Sunday.

"I welcome Croatia to the euro family and to the Governing Council table in Frankfurt," said Central Bank President Christine Lagarde.

“Croatia worked hard to become the 20th member of the euro area and it succeeded.

I congratulate the Croatian people.” The euro will replace the national currency, the kuna, which has been in circulation since 1994.

The former Yugoslav republic became independent in 1991, and Croatia joined the EU in 2013.

The country had to meet a number of conditions for the introduction of the European common currency.

What does the new currency mean for old "holiday pay"?

The exchange rate is fixed: one euro equals 7.5345 kuna.

There is a transitional period until January 14, during which payments can still be made in both currencies.

Anyone who still has kuna from their last vacation can exchange them for euros at banks in Croatia free of charge until the end of 2023.

Up to 100 coins and bills each per transaction.

Anyone who does not come to Croatia this year can exchange the remaining holiday money at banks and savings banks in this country.

In addition to the exchange rate loss, the credit institutions usually charge a processing fee.

New currency in holiday destination raises high expectations

The tourism industry in Croatia in particular has high expectations.

The country with the long Adriatic coast and the many bays and islands thrives on tourism.

The statistics show around 16 million foreign holidaymakers, including 3.4 million Germans, for the first eleven months of 2022.

In the record year 2019, the last year before the start of the corona pandemic, there were 17.3 million, including around three million Germans.

Croatia continues to welcome Austrians, Slovenians, Poles, as well as tourists from Italy, the Czech Republic and Great Britain as holiday guests every year.

No wonder that in some places things get tight and conflicts arise.

The gain for holidaymakers through the elimination of exchange fees means losses for the banks.

According to expert estimates, the profit losses amount to around 1.4 billion kuna (185 million euros).

From the point of view of economists, the advantages outweigh the medium and long-term.

Participation in the euro means more resilience against external shock effects and better access to financial markets.

The currency risk for lenders is reduced, Croatia can get loans with lower interest rates.

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Croatia's citizens view the new currency with mixed feelings

Never before has the introduction of the euro been accompanied by such global economic upheavals.

Russia's war in Ukraine, increased energy costs and delivery problems in the wake of the corona pandemic proved to be inflation drivers across Europe.

At 13.5 percent, the inflation rate in Croatia in November was above the EU average of 10.1 percent, writes the German Press Agency.

Valdis Dombrovskis, Vice President of the EU Commission, put the one-off effect of the introduction of the euro at 0.1 to 0.3 percentage points based on previous experience.

In the medium term, this will be offset by lower currency conversion costs and lower interest rates.

Inflation is forecast to drop to 5.7 percent in 2023.

The Croatians expect that retailers and service providers will round up the conversion wherever they can.

The popularity of the introduction of the euro is therefore limited.

In an April poll, 55 percent of citizens were in favor of the euro, while 42 percent opposed it.

(dpa/ib)

Source: merkur

All life articles on 2023-01-02

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