Council Decision (EU) 2022/1211 of 12 July 2022 on the adoption by Croatia of the euro on 1 January 2023

What it is

ROLE OF THE EUROPEAN PARLIAMENT: the Council adopts the act after consulting the European Parliament but without being obliged to follow its opinion. BACKGROUND: Article 140(1) of the Treaty on the Functioning of the European Union provides that at least once every two years, or at the request of a Member State with a derogation, the Commission and the European Central Bank (ECB) shall report to the Council on the progress made by the Member States with a derogation in fulfilling their obligations regarding the achievement of Economic and Monetary Union. On the basis of its own report and that of the ECB, the Commission should submit to the Council a proposal for a Council decision abrogating, for those Member States which fulfil the necessary conditions, the derogation of the Member State concerned. Both the Commission's and the ECB's convergence reports were published on 1 June 2022. These reports examine, inter alia , the compatibility of Croatia's national legislation, including the Statute of its national central bank, with Articles 130 and 131 of the Treaty and the Statute of the European System of Central Banks (ESCB) and of the ECB. In addition, they examine, on the basis of the convergence criteria, whether a high degree of sustainable convergence has been achieved and take account of several other factors. The European Parliament adopted by 539 votes to 45, with 48 abstentions, a legislative resolution on the proposal for a Council decision on the adoption by Croatia of the euro on 1 January 2023. Parliament approved the Commission's proposal and expressed its support for Croatia's adoption of the euro on 1 January 2023 . Members noted that the Commission's and ECB's positive assessments were made against the background of a longer than initially expected COVID-19 shock and the subsequent economic recovery in 2021. In addition, the Russian invasion of Ukraine had a limited impact on the historical data used for the convergence reports. Parliament stressed that, notwithstanding the difficult socio-economic situation caused by the health crisis and the very recent increase in energy prices, the adoption of the euro by Croatia and the fact that the necessary criteria have been met are a strong political signal of the viability and attractiveness of the Union's single currency . The adoption of the euro will strengthen the Croatian economy and benefit its citizens and businesses. Parliament welcomed the Croatian government's efforts to strengthen the country's institutional capacity, its efforts to improve the business environment and the implementation of structural reforms that are factors for sustainable and inclusive economic growth. It called for a swift and effective implementation of the reforms and investments of Croatia's Recovery and Resilience Plan. It urged the Croatian authorities to continue their good information and communication campaign on the adoption of the euro and called on the Croatian authorities to maintain the current course of practical preparations to ensure a smooth changeover process. Parliament noted that, according to the Commission's Convergence Report 2022, the price level in Croatia has already…

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