UPDATE 1-Croatia to formalise euro zone entry ambitions next year -cenbank governor
(Adds detail)
ZAGREB, Oct 30 (Reuters) - Croatia plans to formally notifyBrussels next year about its intention of joining the two-yearwaiting room before eventually adopting the euro currency,central bank governor Boris Vujcic said on Tuesday.
"We're preparing a letter of intention on joining theEuropean Exchange Mechanism (ERM-2) (that) we plan to send (toBrussels) next year," Vujcic told an economic panel.
The ERM-2 is a tool that serves as a testing ground for thecountries that want to join the euro zone. During at least twoyears a candidate country must prove the stability of itscurrency against the euro within a determined fluctuation band.
The Croatian government wants the country to join the ERM-2in 2020 and to adopt the euro six to seven years from now.
"We're aware we must continue working on reducingmacroeconomic imbalances and pursuing structural reforms as aprecondition for joining the euro successfully," Vujcic said.
Brussels already monitors Croatia for excessive public debtwhich has been on a downward path in the last three years, fromaround 85 percent of gross domestic product to around 75 percentexpected at the end of this year.
One of the key conditions for joining the euro is thatpublic debt does not exceed 60 percent of GDP or, if somewhatabove it, clearly falling towards that level.
The European Commission Vice-President Valdis Dombrovskis,who is on a visit to Zagreb, said that Brussels supportedCroatia's efforts, but also insisted on structural reforms thatwould prove the economy resilient to potential shocks.
"At the moment Croatia's growth potential is not high enoughto converge quickly with more developed European Unioneconomies," he told the economic panel.
Croatia's economy is currently growing slightly below threepercent annually, but its mid-term growth potential is seen atbetween 1-2 percent amid a poor investment climate, a ratherslow and bloated public administration and low employment levelamong its active population.
(Reporting by Igor IlicEditing by Richard Balmforth)
334 053;)) Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.  |