Workshop on Croatia’s Entry into the Eurozone

Croatia has begun to develop a strategy for joining the Eurozone within a timeframe of five to seven years.  Entry into the Eurozone poses considerable economic, logistical and political challenges.  Croatia will need to prepare for the exchange of its national currency for the Euro and undertake various structural reforms in order to achieve a successful entry and get the maximum benefit from its membership.  Indeed, the European Commission already has presented Croatia with a set of Country Specific Recommendations (CSRs) to help guide it in its planning process. 

Entry into Eurozone has resulted in positive economic performance in some countries (e.g., Slovakia) whereas others have experienced prolonged economic woes (e.g., Greece).   Why is that the case?  What are the reasons behind their success or failure?  Were there particular reforms implemented before the introduction of the Euro that had a decisive impact?  This two-day workshop organized by the Prime Minister’s Office, Luksic Scholars, and The Center on Global Economic Governance to be held on May 13 & 14, 2019 explores these questions in order to assist Croatia as it moves toward entry into the Eurozone.

The workshop consists of three segments.  Part one will provide the participants with the analytical and conceptual framework required to understand how the Eurozone functions.  Three sessions examine the broad policymaking context, the monetary and banking unions, and fiscal policy and the investment and business environment in the Eurozone. 

Part two analyze the experiences of countries that offer Croatia insights into its entry into the Eurozone using the CSRs as a practical focal point.  The first session compares Slovakia and the Czech Republic, countries that chose to join and not join the Eurozone, respectively.  Slovakia entered the Eurozone with a slightly overvalued exchange rate but carried out a series of economic reforms that permitted it to become competitive and, on several economic indicators, overtake its neighbor.  The Czech Republic satisfied most entry criteria as early as 2000, but for political reasons has opted not to initiate the entry process.  In the meantime, it has carried out fewer reforms than Slovakia and experienced slower economic growth.  The second session contrasts Estonia and Greece, countries that have had wildly divergent outcomes from Eurozone membership.  Estonia implemented a series of critical reforms, including the creation an advanced form of e-government, and it has taken full advantage of being part of the Eurozone.  Greece, in turn, lacked the political wherewithal to carry out a series of needed economic reforms and, with its inability to devalue a national currency, gradually lost competitiveness within the framework of a single currency; its subsequent troubles are well known. 

Part three concentrates on leadership training with an emphasis on communication.  Effective leadership is an indispensable component of an efficient public administration and will be critical in carrying out necessary reforms in the lead up to Croatia’s entry into the Eurozone.  The first session explores the concept and sources of leadership in general terms and its central role in bringing about change.  The second examines how public agencies can reach out to key stakeholders, communicate their intentions and plans effectively, and win public backing for their initiatives.  It explores cases of success and failure in informing citizens of government policies and gaining their support.  The final wrap up session will be dedicated to reflecting on how the lessons learned throughout the workshop may be applied to Croatia.

Organized By: Prime Minister’s Office of the Republic of Croatia, Luksic Scholars, Columbia SIPA