Croatia is on track to adopt the euro next year after European Union regulators said the country met the criteria to qualify, a sign that the currency bloc will continue to expand after years of economic crises and shocks.
The European Commission said it would propose that Croatia become the 20th eurozone member country on Jan. 1, 2023. The region’s governments are expected to approve the decision at a meeting on July 12. They haven’t opposed similar proposals in the past.
Croatia would become the first country to join the currency bloc since Lithuania in 2015. Croatia, which faces Italy across the Adriatic Sea, has about four million citizens, compared with around 340 million for the eurozone.
Bulgaria, another EU member that hasn’t adopted the euro, didn’t meet all the criteria to join, the commission said. Both countries had entered the region’s exchange-rate mechanism, a waiting room for the common-currency area, in July 2020.
“Less than a decade after joining the EU, Croatia is now ready to join the euro area on 1 January. This will make Croatia’s economy stronger, bringing benefits to its citizens, businesses and society at large,” European Commission President Ursula von der Leyen said. “Croatia’s adoption of the euro will also make the euro stronger.”
Croatia would be the poorest member of the currency bloc, with a gross domestic product per capita of roughly $17,000 in 2022, compared with about $21,000 for Greece, which is currently the bloc’s poorest member, according to International Monetary Fund data. Bulgaria is poorer still, with a GDP per capita of about $13,000 this year, compared with $35,000 for Italy and $51,000 for Germany. The U.S. has a GDP per capita of about $76,000.