The euro has entered into circulation in Croatia today, bringing the number of European Union (EU) Member States using the single European currency to 20.
With Croatia’s accession to the euro area, Hrvatska narodna banka, the country’s national central bank, becomes a member of the Eurosystem. The central banking system of the euro area consists of the ECB and the national central banks of the countries whose currency is the euro.
Hrvatska narodna banka also becomes a full member of the Single Supervisory Mechanism, although Croatia has been part of the framework for close cooperation since October 2020. As a result, the ECB is currently responsible for the direct supervision of five significant institutions in Croatia and for the indirect supervision of 16 less significant institutions. As part of its supervisory tasks, the ECB is also responsible for the authorisation of credit institutions and the assessment of purchasers of qualifying holdings in all institutions. Hrvatska narodna banka already has a representative on the ECB’s Supervisory Board.
Hrvatska narodna banka has paid up the remaining amount of its contribution to the ECB’s capital and transferred its contribution to the ECB’s foreign reserve assets. Croatian counterparties to the Eurosystem are eligible to participate in the ECB’s open market operations as of 1 January 2023. The list of credit institutions and branches of credit institutions located in Croatia that are subject to minimum reserve requirements will be published on the ECB’s website in the near future, together with the lists of branches of Croatian credit institutions located in other EU Member States where the euro is already in use. On 28 October 2022 the ECB announced transitional provisions on minimum reserve requirements. Assets held in Croatia that fulfil the necessary requirements will be added to the list of eligible collateral of the euro area.
Croatia’s entry into the euro area as the 20th member also means that the rotation system for voting rights in the ECB’s Governing Council, in which rotation is organised according to a calendar, has been updated.
As a consequence of Croatia’s accession, the Eurosystem’s capital subscriptions have also changed.
