Written answers

Tuesday, 21 September 2021

Department of Finance

Official Engagements

Photo of Peadar TóibínPeadar Tóibín (Meath West, Aontú)
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165. To ask the Minister for Finance if he will report on his recent meeting with his European counterparts in Croatia; and if he will make a statement on the matter. [45213/21]

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
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On Thursday 9 September, I travelled to Croatia. There, I met with Croatia’s Prime Minister, Andrej Plenkovic, and Deputy Prime Minister and Minister for Finance, Zdravko Maric, to discuss the economic recovery from Covid and Croatia’s preparations for joining the euro. While there, I also gave a joint press conference with the Prime Minister and Minister.

This visit was taken in my capacity as President of the Eurogroup. I was travelling to Slovenia for the Eurogroup and informal ECOFIN meetings, and there was an opportunity to engage in an additional bilateral with Croatia, as a neighbouring country.

Exchanging views with my Eurogroup colleagues and the European institutions is an essential dimension of the Presidency, whether that is done virtually, or face-to-face when possible, such as this visit.

This was the first visit of my Presidency to a non-euro Area member state and I think it is fitting that it should be to Croatia, which is making good progress in its preparations to join the Euro. The Eurogroup is responsible for the close coordination of economic policies among the Euro area member states. Although Croatia is not a member of Eurogroup, it is a participant in the Exchange Rate Mechanism or “ERM II”, which is the so-called “waiting room” for joining the euro. Because of this, Croatia participates in some Eurogroup meetings where ERM II is discussed.

Before joining ERM II, Croatia had taken certain prior and post-entry policy commitments to facilitate smooth participation in ERM II. These commitments are about paving the way towards euro adoption, once the convergence criteria are met. At our Eurogroup meeting in June of this year, we heard that the implementation of Croatia’s post-entry commitments is on track.

During my meetings in Croatia, I had productive discussions and particularly in relation to Croatia’s progress towards accession of our shared euro currency. In fact, in Slovenia the following day, I signed a Memorandum of Understanding with the Croatian authorities and the European Commission, to allow the Croatian authorities to undertake the necessary technical preparations to be ready to produce euro coins.

I should clarify that the signing of this Memorandum of Understanding does not pre-empt in any way a final decision on the introduction of the euro.

The process of euro introduction is set out in EU law. In order to adopt the euro Member States have to achieve a high degree of sustainable economic convergence with respect to the fulfilment of criteria related to price stability, public finances, long-term interest rates and exchange rates. Compatibility of the national legislation, including central bank statutes, with the relevant provisions of the Treaty is also necessary.

The assessment of convergence is monitored regularly on the basis of the reports by the Commission and the ECB, which are foreseen next year.

Finally, all necessary health precautions were taken, and I followed public health guidelines during this trip.

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