[HN Gopher] Croatia to switch to euro, enter passport-free Schen...
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Croatia to switch to euro, enter passport-free Schengen zone
Author : eatonphil
Score : 175 points
Date : 2022-12-31 19:43 UTC (3 hours ago)
(HTM) web link (www.aljazeera.com)
(TXT) w3m dump (www.aljazeera.com)
| charcircuit wrote:
| Why not switch to USD?
| Gordonjcp wrote:
| Because no-one uses them.
| kmeisthax wrote:
| Because they're already EU members and jumping off the Eurozone
| track would require leaving the EU. Furthermore, the US really
| isn't interested in territory expansion (unless you're
| Greenland); we can't even bother to make Puerto Rico a state or
| American Samoa a territory.
| lern_too_spel wrote:
| Having a common currency makes more sense if you can easily
| move to places that the monetary policy controlling supply of
| the currency benefits. US monetary policy is made to benefit US
| states, and Croatians cannot easily move there.
| ragebol wrote:
| Is that an option even? Sure, unofficially, but another country
| officially adopting the US dollar as their currency?
| charcircuit wrote:
| There are already several countries whose official currency
| is USD. Of course they can't start printing their own USD.
| rippercushions wrote:
| Ecuador, El Salvador, Palau and East Timor did. Of course,
| it's "official" only on their side, the US hasn't endorsed it
| but they don't really care and couldn't do much about it even
| if they wanted to.
| senko wrote:
| Because it's part of EU, not USA.
| ploppyploppy wrote:
| What a terrible idea.
| Teamteam16 wrote:
| [flagged]
| digianarchist wrote:
| You might want to reply in English not many people will
| understand Thai here.
| ChuckNorris89 wrote:
| Questions from a financially illiterate: does the switch to Euros
| carry any disadvantages to average Croatian citizens?
|
| I could be wrong but I seem to remember other EU countries like
| the Czechs, Sweden and Denmark intentionally avoiding the switch
| to Euro despite being eligible, and from some articles I read
| recently, other countries like Finland and Netherlands regretting
| the switch from their currency as they don't want to have to
| suffer the proposed persistent high inflation and be punished for
| being financially responsible in order to help countries like
| Greece or Italy pay their huge debt.
|
| Also, an older Italian gentleman I spoke to once told me that
| after their switch to Euros, their prices shot up but wages
| didn't. Curious how true this is and if the same could happen in
| Croatia.
|
| Does having control of your own currency that's not pegged to the
| USD/Euro carry any advantages anymore if you're not someone like
| China ar is it pointless now?
| InCityDreams wrote:
| >Also, an older Italian gentleman I spoke to once told me that
| after their switch to Euros, their prices shot up but wages
| didn't. Curious how true this is and if the same could happen
| in Croatia.
|
| On the euro-conversion day, 1 EUR = 1,936.27 ITLira = 1
| Deutschmark (at the time). So, prices went up ie a L1,000
| coffee became EUR1 - it doubled, because a) it was easy and b)
| people just couldn't be bothered. Businesses had no problem,
| being bothered, of course - wood from Germany that used to cost
| DM1,000, now cost EUR1,000 in Italy when it should have been
| 1,000/1,936.27 = 516 Euro....but it didn't. I knew a guy that
| was building a house and it was cheaper to purchase a lot of
| things from Germany (even with the exchange rates, paperwork
| etc), and boy did they get burned. Equally, an Italian company
| they originally called had also doubled their prices, so it
| would have cost twice as much again to purchase locally.
|
| Italy was just the victim of a series of rounding errors,
| except when it came to wages, as they didn't double.
|
| To me, it's just like shopping in the states. A dollar is a
| dollar, but state, local, county etc taxes sure make it far
| more interesting than it should be.
| senko wrote:
| > does the switch to Euros carry any disadvantages to average
| Croatian citizens?
|
| Ignoring temporary inflation due to businesses taking advantage
| to round things up in Euros, my belief is the switch will be a
| net positive.
|
| Croatia has been already completely tethered to Euro. Kuna was
| unofficially pegged almost from the start, house and car prices
| are always quoted in Euros, people's mortgages are calculated
| in Euros. The "loss" of monetary freedom that comes with not
| being able to print your own currency is not a loss here
| because Croatia could in practice never leave the peg, the
| consequences would be extremely severe.
|
| On the other hand, Croatia is a very small country (less than
| 4m people) and tourism makes up a large portion of the economy.
| Using Euro removes friction and costs tourists and businesses
| had having to convert from/to the currency. The removal of the
| border checks (entering the Schengen, which also happens on Jan
| 1st) will also help with this.
|
| > other countries like Finland regretting the switch from their
| currency as they don't want to have to suffer sky high
| inflation and be punished for being financially responsible
| just to help other countries like Greece or Italy pay their
| huge debt.
|
| Croatia will be a net beneficiary (edited, thx) of EU funds
| related to the integration processes for at least a couple of
| years, and is near the rear of the pack in most economic
| measures.
| McDyver wrote:
| > Croatia will be a net benefactor of EU funds
|
| Do you mean net beneficiary, instead of benefactor?
| senko wrote:
| Oops, indeed.
| Strom wrote:
| > _Denmark intentionally avoiding the switch to Euro_
|
| Only in name as a PR move. Take a look at the 10 year EUR/DKK
| conversion chart. [1] The Danish national bank keeps the
| currency fixed to euro anyway.
|
| --
|
| [1] https://www.xe.com/currencycharts/?from=EUR&to=DKK&view=10Y
| boulos wrote:
| Yeah, Denmark is the wrong example. _Sweden_ is the right
| one:
| https://www.xe.com/currencycharts/?from=EUR&to=SEK&view=10Y
| dns_snek wrote:
| There's a chance that cost of goods and services might
| significantly increase as businesses exploit unfamiliarity with
| the new currency. A cup of coffee that costs 15 HRK (2 EUR)
| today might cost 3 EUR tomorrow.
|
| Having said that, it seems like they've foreseen this issue and
| currently require businesses to display prices in both
| currencies.
| andrepd wrote:
| It's definitely not pointless. Consider this: the Eurozone is a
| monetary union _without_ a fiscal or political union. Its
| monetary policy is effectively controlled by the biggest
| economies, particularly Germany.
|
| However, countries have _drastically different_ monetary goals,
| as can be sharply seen in times of crisis, such as the
| sovereign debt crisis in the 2010s. It 's fundamentally
| impossible to satisfy the goals of Germany and Greece, for
| example, with a unified currency but no fiscal union (and of
| course, with no democratic governance).
| wheels wrote:
| It could. It means that inflation / deflation will be linked to
| the wider EU economy and not responsive to the particular
| economic conditions of Croatia. This was a big deal in Greece
| when inflation would have helped their economy by boosting
| exports, but was impossible because of being tied to the much
| stronger economies of Western Europe.
|
| There are some advantages to being on the Euro, but
| macroeonomically, it more benefits large stable countries
| (which then have an artificially depressed currency) like
| Germany and France.
| cm2187 wrote:
| I don't know if I would put France in the stable countries
| basket. Italy's indebtedness will catch up with them sooner
| or later. France will likely come shortly after. There are
| lots of liabilities that come attached to becoming a member
| of the eurozone. All this debt will have to be inflated away.
| tgv wrote:
| And since the coin is now tied to the rest of Europe, it
| becomes more attractive for members from other EU states to
| buy property in Croatia, or live there as a pensionado. This
| can drive the (housing) prices upwards.
| robbintt wrote:
| On the other hand, Croatians can freely work anywhere in
| the Schengen area, right? And vice versa to bring jobs to
| Croatia?
| mytailorisrich wrote:
| That is already the case. The right to freely move and
| work anywhere (not only in the EU but EEA and
| Switzerland) is not bound to Schengen.
| andrepd wrote:
| So, they can have their qualified youth (educated at
| Croation expense) go work and pay taxes in Switzerland or
| the Netherlands or Germany? I fail to see how that's a
| positive :)
| Ekaros wrote:
| That might not be positive. But now there is even less
| friction with local companies in Croatia selling services
| to those countries.
| nibbleshifter wrote:
| Property purchase in Croatia was already extremely easy and
| attractive.
| cjbgkagh wrote:
| The panacea to the worlds economic problems, ever
| increasing cost of housing.
| europeanguy wrote:
| The meme is that by not having your own currency you have one
| less emergency measure available to you (devaluing your own
| currency).
| mytailorisrich wrote:
| Immediately it depends on how the exchange rate was fixed, then
| it will incur rounding effects.
|
| Longer term, Croatia will have lost control of its monetary
| policy but one would expect they reckon they'll gain more from
| the switch.
| martythemaniak wrote:
| Before adopting the Euro, countries spend some amount of time
| in the ERM (Exchange Rate Mechanisms) where the currency is
| pegged to the Euro. Thus, the actual switch is just a note
| swap, the actual advantages and disadvantages are already
| there.
|
| The real issue is they lose the ability to issue debts in their
| own currency and whether that's good or bad depends hugely on
| individual counties. It has worked well for some, not for
| others.
| buzzdenver wrote:
| > The real issue is they lose the ability to issue debts in
| their own currency and whether that's good or bad depends
| hugely on individual counties.
|
| Having your own currency also allows you to set monetary
| policy and not just follow the European Central Bank. So in
| time of financial crisis you can print as much money as you
| want and fiddle with exchange rates to make your country more
| competitive.
| Someone wrote:
| > Thus, the actual switch is just a note swap, the actual
| advantages and disadvantages are already there.
|
| Not quite. When your currency is pegged to the euro, the
| exchange rate isn't fixed; you only promise to try and keep
| it fixed. If that turns out to be impossible (or you don't
| want to do it anymore), you can change the exchange rate or
| decide to stop that pegging.
|
| Of course, that you could do that has a price: people will
| weigh the risk of something like that happening when they
| invest in your currency.
|
| If you join the euro, the exchange rate becomes 100% fixed.
| Giving up that flexibility removes some uncertainty for
| investors, and that may be beneficial to you (technically,
| you could still exit the euro system and reintroduce a
| national currency, but your national debt and interest
| payments would still be valued in euros, diminishing the
| effect you get from getting back your own currency. It also
| is deeply uncharted territory; I'm not even sure rules for
| doing it have been made. Markets may judge a move like that
| similar to how they would judge defaulting on your loans)
|
| In some sense, pegging to the euro is the try-out of "what
| would happen if we joined the euro?"
| rsync wrote:
| "... does the switch to Euros carry any disadvantages to
| average Croatian citizens?"
|
| It carries tremendous disadvantages.
|
| In fact, I'm quite surprised that at this late date, with a
| greater understanding of what it means to _force your citizens
| to use the Deutsche Mark_ , that they have made this decision.
|
| With all due respect to Croatia and the lovely people that live
| there, they cannot compete globally with Germany in any
| interesting export market.
|
| The typical tool that a nation uses to deal with that reality
| is the relative value of their currency. Consumers of import
| goods then have a choice to make between German quality and
| (for instance) Spanish pricing.
|
| ... and now that lever will be gone.
|
| At this point I think it is fairly well understood what the
| economic - and social - ramifications of this are and, again, I
| am actually quite surprised they've made this choice.
| moonchrome wrote:
| Croatian Kuna was basically pegged to Euro by Croatian
| central bank. Large amount of loans and savings were in Euro
| already. Switching to euro was mostly a formality at this
| point.
| darrenf wrote:
| I visited Dubrovnik in early December expecting to spend
| mostly euros, given the peg and impending switch. In
| reality I used only kuna. Almost all restaurants, market
| stalls and shops were accepting HRK only and none of the
| ATMs were dispensing EUR. To me it seemed so bizarre with
| only 3 weeks to go - and a big contrast to my experience in
| Amsterdam before their switch in 2002.
| robbintt wrote:
| I don't know anything about this stuff, either. Why does it
| work in the US to have the midwest on the same currency as
| California?
| dkjaudyeqooe wrote:
| > With all due respect to Croatia and the lovely people that
| live there, they cannot compete globally with Germany in any
| interesting export market.
|
| > The typical tool that a nation uses to deal with that
| reality is the relative value of their currency.
|
| The typical tool they use is product pricing. Why devalue the
| savings and assets of Croatians who don't participate in
| exports?
|
| The irony of your claim is that Croatians use the euro as a
| store of value in preference to the kuna because of the
| (perceived) vulnerability of the kuna to devaluation, or even
| elimination. They've lived through several wars and attendant
| changes in sovereignty were bank savings were simply wiped
| out or the old currency was severely devalued in a forced
| exchange.
|
| People tend to bring up this "important tool" but ignore that
| by itself it's of little value (see Italy for instance: so
| many devaluations, still a fiscal basket case) and ignore the
| severe impact devaluations have on the income as assets of
| people who have worked hard and done nothing to deserve the
| haircuts they recieve in currency devaluations. More often
| it's used as a tool to avoid economic reforms (again Italy).
| thaumasiotes wrote:
| > The typical tool that a nation uses to deal with that
| reality is the relative value of their currency. Consumers of
| import goods then have a choice to make between German
| quality and (for instance) Spanish pricing.
|
| > ... and now that lever will be gone.
|
| Because Croatian prices will be equal to German prices? Why?
| Xylakant wrote:
| Why do you expect that to happen? Finnland uses the Euro
| and has different prices from Germany, so does Latvia,
| Spain, Italy, France,... if the prices for goods depended
| on the currency alone, we'd all have the same prices. But
| we don't. And the Croatian currency was pegged to the EUR
| anyways, so if you'd be right and the currency dictates the
| price, they'd already have the same price in all but name.
| thaumasiotes wrote:
| Did you mean to respond to me?
| derriz wrote:
| There is no "tremendous advantage" available to small
| countries in being able to devalue their currency.
|
| A currency devaluation may, in theory, make a country's
| exports more competitive but it does so by imposing a real
| cut on every citizens income. It also makes all imports more
| expensive leading to inflation so in the end, it cannot not
| solve the underlying problem.
|
| There are no examples of countries becoming wealthier simply
| by manipulating the value of their currency. Nor does it make
| me taller if I decide from now on to measure my height in cm
| instead of inches.
| Ekaros wrote:
| China probably gained something by manipulating their
| currency, but it is also very very special case.
|
| In general stability is better for small countries. And
| Euro is big enough to be stable enough.
| senko wrote:
| > The typical tool that a nation uses to deal with that
| reality is the relative value of their currency ... and now
| that lever will be gone.
|
| That lever hasn't been there in a while. Croatia could never
| lift the peg to Euro without massive disruption to almost
| everyone here.
|
| A few years ago, Switzerland lifted its peg. Only a very
| small number of Croatian mortgages have using CHF at the time
| (the rates were better then EUR or HRK ones) and the
| resulting damage was huge (bankruptcies, people's lives'
| ruined), still having repercussions ot this day.
|
| Compared ot that, virtually _all_ of the mortgages (and other
| types of loans) are either calculated in Euro or pegged to
| Euro directly or indirectly. If the peg had ever lifted, you
| 'd have rioters in all the major cities the next day.
| toomuchtodo wrote:
| It's a trade off. You give Germany and France more control,
| but they are incentivized to backstop you. It seems the
| countries continuing to join the EU understand this and are
| at peace with it.
|
| Tourism is one of the larger sectors in Croatia's economy, so
| frictionless travel between them and other EU members is
| likely worth the arrangement. They also have a floating LNG
| terminal, very valuable due to recent events.
|
| https://www.countryreports.org/country/Croatia/economy.htm
| mytailorisrich wrote:
| I don't think there is 'Germany and France' anymore these
| days. There is Germany and their goodwill towards France,
| if any, [edit:] because all the power and leverage has been
| with Germany for years now. Recent years have shown that
| Germany will of course focus on its own interests and
| policies and ignore France/rest for the EU whenever they
| deem fit to do so, while France is in a weaker position. At
| least it used to be that France had military power going
| for themselves but recent policy changes in Berlin should
| really and finally set alarm bells off in Paris.
| toomuchtodo wrote:
| My shorthand is lazy, but it's no different than
| California ($3.3T GDP), Texas ($2.1T), and New York ($2T)
| carrying the rest of the US states. Europe is stronger
| together than apart (economically speaking), and this is
| a good deal for everyone involved (my two cents).
|
| I admit there is always a bit of contention when
| macroeconomic stress limits are tested. Such is the
| nature of unions.
| rsync wrote:
| I disagree - it is quite a bit different.
|
| The United States and the individual states share _both_
| a fiscal and monetary union.
|
| The EU, on the other hand, is a monetary union _but not a
| fiscal union_ and our expectations for that arrangement
| range from hopeful to outright fatalism.
| atmosx wrote:
| I dislike Thatcher, a lot. However she was ahead of the
| curve in 1990. This is a quote from her last speech in
| the House of Commons as PM:
|
| " [...] the point of that kind of Europe with a central
| bank is no democracy, taking powers away from every
| single Parliament, and having a single currency, a
| monetary policy and interest rates which take all
| political power away from us."
| johnchristopher wrote:
| That quote was factually wrong then is factually wrong
| today. There are still parliaments in EU countries, they
| still debate and vote laws.
|
| Yeah, some matters are also discussed at the EU level.
| That's what happens when different entities make and join
| a club. They have to collaborate.
|
| Would she have agreed to give Scotland its own currency ?
| Thought so.
| atmosx wrote:
| > There are still parliaments in EU countries, they still
| debate and vote laws.
|
| Greece cannot pass laws through parliament without
| Brussels approval. Italy, effectively need to stay in-
| line with the EU's program otherwise the EU aid will
| stop... so effectively these parliaments vote whatever
| they're told by Brussels to vote.
|
| > Yeah, some matters are also discussed at the EU level.
| That's what happens when different entities make and join
| a club. They have to collaborate.
|
| I don't see much collaboration happening tbh (energy,
| immigration, etc.). I could point articles but I think we
| have a completely different view on how's Europe actually
| governed right now.
| andrepd wrote:
| I remember Yanks Varoufakis, a person with _intense_
| disagreements with Thatcherism, to put it mildly,
| praising this quote.
| toomuchtodo wrote:
| I agree with you in theory/academically but disagree with
| you that the difference matters in application. The only
| difference is the force with which the dissenting or
| economically weaker parties can be dragged by the
| majority; in both cases, the dissenting are still getting
| dragged (and drag applied to the majority). There is no
| appetite in either case to dissolve the monetary union.
| Witness how poorly it went for the UK leaving the EU, and
| that's with maintaining their own currency.
| cjbgkagh wrote:
| In the UK much of the popular support for the EU was from
| people looking to escape their own god awful politicians,
| that things didn't go well after leaving, due to the same
| god awful politicians, wasn't a big surprise. Technically
| one way to fix it would be to elect better politicians,
| but it's the UK so that doesn't seem to be an option.
| cjbgkagh wrote:
| The plan was always to use a debt crisis to turn the
| monetary union into a fiscal union. I guess therein lies
| the fatalism. But fiscal unions were much easier to form
| when money was gold backed and financialization wasn't so
| rampant. Plus people have seen the effects of Germany
| being able to export unemployment via its surplus is it
| upsetting other Europeans and building anti-EU sentiment.
| In my view the debt crisis is structurally baked in and
| guaranteed to happen, what I'm uncertain about is the
| extent of the backlash EU leadership will receive from
| the attempt at normalizing fiscal policy.
| [deleted]
| atmosx wrote:
| The countries don't understand a thing, until it's too
| late. Politicians want bigger-size budget to spend (the
| first 5 years) and the local elites want to avoid possible
| depreciation of their bank accounts (Italy, Greece, etc).
|
| The local elite now will be owned by Brussels within a few
| years to an extend they can't imagine. The politicians care
| too much about their personal careers, they don't care
| about the state.
|
| Ultimately the Citizens will have to pay the piper, but
| then again ... maybe I am wrong.
|
| Joining the EUR in 2000 one could claim ignorance. Joining
| in 2022, without having infrastructure and industry to
| compete with Germany, using a currency they completely
| control is pure suicide. You go looking for someone to take
| over you country.
| toomuchtodo wrote:
| Greece and Italy can't blame Brussels for structural
| demographics and no industry worth young people sticking
| around for though, right? If your country is just a
| runner up economically, you didn't have much leverage to
| begin with. With monetary policy control, you can print,
| but without the underlying economic engine to back that
| printing, you end up as Turkey (bad) or Venezuela
| (worse). Only in aggregate can you monetize the debt.
| atmosx wrote:
| > Greece and Italy can't blame Brussels for structural
| demographics and no industry worth young people sticking
| around for though
|
| Greece and Italy choose to be part of the EUR, so now
| they have to pay the price of a choice they made.
| However, there is a structural problem with the way the
| common currency is constructed. This has little to do
| with individual countries and everything to do with the
| eurozone.
|
| The EURO created a union with a common central bank that
| lacked a common state to have its back, while
| simultaneously allowing states to carry on without a
| central bank to have their backs in times of financial
| crisis, when states must bail out the banks operating in
| their territory.
|
| Now during the good times, cross-border loans created
| unsustainable debts. Then, at the first sign of financial
| distress (either a public or a private debt crisis), the
| writing was on the wall: a eurozone-wide spasm whose
| inevitable outcome was sharp divergence and enormous new
| imbalances.
|
| The beneficiaries of this situation are some countries
| and not others, but this is not sustainable in the long
| run. The EU needs to create a proper banking union and
| then most likely most to a sort of political integration.
| Unfortunately the EURO as currently constructed, made
| that impossible by pitting one country against another.
| senko wrote:
| > The local elite now will be owned by Brussels
|
| The local elite is such a bunch of bufoons (Johnson would
| fit right in!), being owned by Brussels would be an
| improvement.
| atmosx wrote:
| Although I share the sentiment, Brussels elites are
| equally or more buffoons.
|
| There are some "pro-Brussels" arguments. For example
| right now Greece is in the midst of a spying scandal and
| the only way the judiciary pays attention is to avoid
| pressure from Brussels. Local journalists try to escalate
| to European bodies because locally the judiciary bodies
| are either corrupted or toothless.
|
| So, there's at least that.
| johnchristopher wrote:
| > I could be wrong but I seem to remember other EU countries
| like the Czechs, Sweden and Denmark intentionally avoiding the
| switch to Euro despite being eligible, and other countries like
| Finland regretting the switch from their currency as they don't
| want to have to suffer sky high inflation and be punished for
| being financially responsible just to help other countries like
| Greece or Italy pay their huge debt.
|
| Jeez, talk about a loaded question...
|
| > Questions from a financially illiterate
|
| Yeah, if you are aware of being financially illiterate then
| maybe abstain yourself from parroting and disguising political
| memes as genuine and candid questions.
| vinay427 wrote:
| This response seems unfair. Not the GP, but to me their
| question seems in presumably good faith (I'm not sure that
| asking if there are any disadvantages is a loaded question)
| and is followed by a description of their understanding
| clearly wrapped in a disclaimer to avoid simply "parroting"
| political memes.
| johnchristopher wrote:
| Oh, a disclaimer... yeah, that's usually how it works, you
| play the disclaimer card to candidly disguise your
| statements as questions.
|
| There is no need to repeat the Germany-responsible-greece-
| lazy idea to ask questions about how adopting the Euro
| plays out for a given country.
|
| I would also point out that Germany is not as responsible
| as what many people claim considering their little energy
| problem and the impact it now has on Europe but I am not
| playing that card.
| ragebol wrote:
| Being from the Netherlands, I don't think we in majority regret
| being in the Euro or Schengen. Of course, there's downsides and
| some people want out, but you'll have those in any country.
| cjbgkagh wrote:
| It means lower interest rates at the cost of high unemployment,
| unless you are Germany or some other country with naturally low
| interest rates. Low interest rates drives up asset prices and
| assets are owned by the wealthy. Unemployment/underemployment
| hurts young people the most. Governments can borrow more
| cheaply and can spend more money on social programs but they
| also tend to divert it into their own pockets and to the
| pockets of their backers. When the inevitable crisis hit the
| countries can't devalue the debt in response, they instead have
| to sell national assets.
| Beltalowda wrote:
| According to the article:
|
| "About 80 percent of bank deposits are denominated in euros and
| Zagreb's main trading partners are in the eurozone. Croatians
| have long valued their most prized assets such as cars and
| apartments in euros, displaying a lack of confidence in the
| local currency."
|
| So in that sense it's less of a radical change than e.g.
| Czechia or Sweden, since they primarily use the local currency
| AFAIK.
|
| If you're already half-way using the Euro (kuna is pegged to
| Euro as well) you might as well join the euro-zone and have
| _some_ influence.
| college_physics wrote:
| Adopting the euro in the current incomplete state of the EU's
| financial and economic integration is a fairly risky business as
| other countries found out the hard way
|
| Croatians probably bet that the EU will - eventually - deliver on
| its promises.
|
| Its not a crazy assumption.
|
| The repeated existential crises might convince Europeans of their
| joint destiny. The result could be a prosperous, peaceful
| continent that is a role model for how people can coexist.
|
| Welcome. 2023 starts with some good karma.
| gghhzzgghhzz wrote:
| 20 waisted years in my humble opinion.
|
| When EU countries could have been forging ahead, building on
| the natural base of social democracy and technological
| advancement, e.g. to become world leaders in future energy .
| Instead they have spend 20 years dealing with the internal
| inconsistencies and self imposed limitations of a single
| currency without a single fiscal / monetary policy.
|
| I don't see it changing, but who knows.
|
| EDIT. I do wish people would post counterpoint, rather than
| vote down something that I explicitly stated was my own humble
| opinion.
| andrepd wrote:
| The single currency was an enormous boon to surplus countries
| (i.e. net exporters) and an enormous detriment to deficit
| countries. Couple to that the atrocious, almost criminal
| handling of the Eurozone crisis.
| jacquesm wrote:
| Nonsense. The countries that are in line for this will peg
| their currency to the euro just like NL did before the euro
| with the German Mark.
|
| If anything the local population that does not yet have the
| euro for everything is being scalped by their banks: debts
| are in euros but income is in the much weaker local
| currency. Most of them can't wait to switch but the access
| criteria are still fairly strict. Yes, the exporters also
| have a benefit: mostly because of the enlargement of the
| single market. But this is still _within Europe_ , the
| comparison should be with the countries outside of Europe
| and then suddenly being part of a larger trade bloc with a
| single currency is a huge advantage.
| WesternWind wrote:
| I mean entering into the passport free zone seems like it opens
| up a lot of opportunities.
| dkjaudyeqooe wrote:
| Mostly it means avoiding hours-long tailbacks at border
| crossings for tourists.
|
| Not having to deal with surly border guards is also a
| significant bonus.
| Scoundreller wrote:
| heh, driving into Croatia. Hand over passports to the first
| guy, answer a few questions and we drive off. See guy in
| the rear-view yelling and waving his arms at us.
|
| Turns out that immigration is at the booth, then the guy
| standing around ahead is the customs guy you're supposed
| pull ahead and stop for. Oops.
| bootsmann wrote:
| Keep in mind that Schengen mostly affects visa-free tourism.
| The EUs single market freedom of movement (which massively
| expands opportunities) is a different, unrelated concept.
| tick_tock_tick wrote:
| You can do one without the other.
| dkjaudyeqooe wrote:
| Croatia has effectively adopted the euro for decades. Most
| property (and other large) transactions are executed in euros
| and people have taken out loans in euros. The Croatian central
| bank understands that a good chunk of the economy already works
| in euros and has had a policy of keeping the kuna steady with
| the euro, even before it was required.
|
| The biggest differences besides the different banknotes is that
| exchange rate risk has been eliminated, interest rates have
| gone down and Croatia's credit rating has gone up.
| gghhzzgghhzz wrote:
| > The biggest differences besides the different banknotes is
| that exchange rate risk has been eliminated, interest rates
| have gone down and Croatia's credit rating has gone up.
|
| I'm not suggesting for one minute that Croatia now is in the
| same state as Greece was 20 years ago. but improved credit
| rating based on the idea that the currency is effectively
| backed by the German and French economy, was one of the
| reasons for the debt crisis. German and French banks loaned
| them money that they shouldn't have, knowing that they would
| get bailed out.
|
| Good luck to them though. It seems to have a similar
| population size to Scotland, so is interesting in terms of
| the independence debate in the UK.
| dkjaudyeqooe wrote:
| The improved credit profile is due to the positives of have
| the same currency as your major economic partners, also
| because Croatia cannot unilaterally devalue the euro.
|
| Croatia has a good credit rating because it's shown fiscal
| restraint, but for the given good work it's done on it's
| fiscal position, it's now getting an even lower rate.If
| Croatians started acting like Greece, that wouldn't be the
| case. Investors have learned their lesson.
| Doctor_Fegg wrote:
| *weeps in UK
| [deleted]
| barbazoo wrote:
| Think of all the money the UK is saving now though... /s
| masklinn wrote:
| It's hilarious that Croatia has blue passports too.
| wheelerof4te wrote:
| The country where they still openly celebrate faschism is
| rewarded with both Eurozone membership and Schengen zone?!
|
| Call me not surprised. After all, they were by far the closest
| friends of Nazis during the WWII.
| timeon wrote:
| Slovakia is already in Eurozone and Schengen. Probably not same
| level as Ustase and not openly celebrating faschism but there
| is party full of neonazis in parliament there.
| asdadsdad wrote:
| German was _the_ Nazi State in the WWII. It 's one of the most
| strongly integrated countries in the EU. What does that have to
| do with anything? History should be remembered but we're not
| playing 2022/3 by the rules of the past. Generations come to
| fix the errors of past ones, otherwise what are we all doing
| here?
| smatija wrote:
| Slovenia already announced that they will replace border checks
| with checks close to border [1]. Schengen sadly doesn't mean much
| anymore.
|
| [1] - https://www.rtvslo.si/slovenija/kaj-bo-z-mejnimi-prehodi-
| po-...
| hamax wrote:
| There is nothing about moving the border checks in the cited
| article so I'm not sure what this person is talking about.
| smatija wrote:
| "Na celotni meji dela 1400 policistov, vecina jih bo
| premescenih v enote za izravnalne ukrepe, ki bodo selektivne
| kontrole potnikov, blaga in vozil lahko izvajale v blizini
| meje in v notranjosti drzave."
|
| Roughly translated: 1400 police officers work at border. Most
| of them will be moved to other units, which will perform
| selective checks of passengers, goods and vehicles close to
| border and in country interior.
| hamax wrote:
| So just normal police work.
| [deleted]
| [deleted]
| Kosirich wrote:
| I was just happy they removed that f...ing barbed wire on
| border of CRO/SLO Istria which was put up after 2015. Whom ever
| in Slovenian government decided to do that, is/was a f...ing
| idiot as they did it just to show how "hard" they are on
| immigration.
| Faaak wrote:
| I'm sorry but this is simply not true. In central EU, you can
| travel anywhere without any check. And this is huge compared to
| 20 years ago
| nibbleshifter wrote:
| There's still the occasional customs check inside schengen,
| for example the flixbus from Prague or Amsterdam to Berlin
| always seems to get controlled by the German police and a
| drug sniffing dog.
| mardifoufs wrote:
| Do they mostly control for drugs? Or are there other types
| of controls? Like do they usually check for passports and
| ID?
| Xylakant wrote:
| At the moment, there are checks in quite a few places, we
| crossed over from Riga to Poland by bus a few days ago
| and they've checked the bus. But they were mostly
| interested in Russian passports and Visa. Similar from
| Germany to Denmark and Germany-Poland a few weeks earlier
| as well as Poland-Czech Republic-Austria.
|
| I believe it's mostly related to the war in Ukraine,
| since I had no similar experience in the more western
| parts of Europe (Austria/Germany, Germany/France)
| smatija wrote:
| Looks like you didn't have to wait at Karavanke tunnel
| between Slovenia and Austria yet. Selective checks by
| Austrian police are practically hourly and they cause traffic
| jams up to Jesenice (10-15km) on regular basic during
| vacation season.
| kgeist wrote:
| On my first trip from Czech Republic to Germany in 2008 (as a
| foreign student from Eastern Europe) I was surprised there
| was German police checking passengers' IDs. I didn't have all
| the required documents with me because I thought there would
| be no checks at all because I had a Schengen visa.
| Fortunately the police officers were pretty cool and left me
| alone after I explained who I was and why I didn't have all
| the documents with me.
| ilikehurdles wrote:
| Random checks may still occur.
| wolverine876 wrote:
| Discussions of the EU seem to me to omit its most important
| functions:
|
| 1. Prevent war. The EU was designed for this purpose, after
| centuries of European warfare, by the survivors of WWII. You
| can't overestimate the damage WWI and WWII did to Europe; the
| next one would utilize more powerful means of destruction. You
| can see the problem with European conflict in the news right now.
|
| 2. Power: In a world of giants, with power already in the
| relatively massive US (fortunately an ally to EU countries), and
| shifting to some degree to China and India, little Croatia (or
| UK, IMHO) is a tiny minnow. The EU is a major power - the world's
| largest economy, IIRC.
|
| #2 also impacts the US, and freedom and democracy, considerably.
| China's population relative to the US is about 4x, which is not
| far off the US relative to the UK. If China develops to even half
| the per capita productivity of the US, its economy will be ~twice
| as large. The same goes for India (which IMHO is a greater danger
| - people have their heads in the sand about Modi's openly
| aggressive nationalism). Without the EU as an ally, the US may be
| too small to compete.
| TulliusCicero wrote:
| The EU is the world's third largest economy in nominal terms.
| bitL wrote:
| Some people still use stats from 2008. Since then EU is flat,
| both USA and China growing like crazy. India might catch up
| with EU in the next 20 years as well.
| Retric wrote:
| Calling it flat is a little misleading, Brexit removed a
| large chunk of EU's total GDP.
| mytailorisrich wrote:
| The EU should be an independent power standing on its own two
| feet, it has the size and strength for that, and seek its own
| profitable relations with both the US and China, and other
| powers like India, equally.
|
| The idea that the EU is to be 'allied' with the US against
| China is an US-centric view, and implies subservience to the
| US.
| tick_tock_tick wrote:
| > The idea that the EU is to be 'allied' with the US against
| China is an US-centric view, and implies subservience to the
| US.
|
| No, it implies a realistic view of the world. Until the EU
| can handle it's own self defense it's inherently an
| unbalanced power arrangement.
| tick_tock_tick wrote:
| No, the EU started as a trade alliance and evolved into the
| bureaucratic behemoth it is today. It's a large part of why
| they have so many issues they've basically created the problems
| we had with the articles of confederation. A federal power
| without enough authority to resolve a lot of issues.
| gghhzzgghhzz wrote:
| I would suggest that NATO was the main reason for relative
| peace in Europe from 1945 up to 1991.
|
| After that things went very wrong, culminating in what we have
| today. Russia could have been part of the EU, as was certainly
| possible especially given the completely new dynamic that
| existed after the fall of the soviet union. That would truly
| have been a positive project.
|
| I don't know if we could ever have undone the mistakes that
| were made from 1991 onwards, plenty of people tried to include
| Russian nationalism into international politics, but by then it
| was far too late, we were dealing with a mess that we had
| created.
|
| For the last 10 years they have done the opposite and tried to
| legitimise themselves against this bogeyman i.e. implicitly
| stating that your only alternatives are a socially and
| economically liberal democracy that seems powerless to address
| systemic issues, or socially reactionary forces.
|
| But the later keeps becoming more prominent due to the failure
| of the former.
|
| Point 2 I agree with the sentiment.
| rado wrote:
| In the photo, the person on the left, shouldn't they be in jail?
| fortran77 wrote:
| Christine Lagarde?
| JasonFruit wrote:
| Why?
| _fizz_buzz_ wrote:
| sure, in some peoples fascist phantasy world
| sfusato wrote:
| This is such a complex issue. It worked well for some, bad for
| others and nobody knows what the future holds, but one thing is
| for certain: they're trading away part of their sovereignty, make
| no mistake about that. Some would say, the most critical one. I
| guess we shall see how the future will play out. Good luck to
| Croatia.
| 40amxn40 wrote:
| [dead]
| crazygringo wrote:
| Nobody is trading away any sovereignty. That's a mistake on
| your part.
|
| Croatia is freely entering into this and is free to leave in
| the future as well, the same as the UK chose. This is a
| sovereign treaty like any other. They are not signing away
| their ability to change their mind in the future. So there is
| utterly no change in "sovereignty".
| mytailorisrich wrote:
| You do lose key levers when entering the euro ans Schengen.
| But this is a trade off and hopefully in 2022 countries do
| this with their eyes open.
|
| On key aspect is that Schengen does not harmonise immigration
| policy and actual external borders' security but removes
| internal borders. And of course the euro means the country
| loses control over its monetary policy.
| Octokiddie wrote:
| > Experts say the adoption of the euro will help protect
| Croatia's economy at a time when inflation has been soaring
| globally since Russia's invasion of Ukraine in February led to
| heightened fuel and food prices.
|
| Wikipedia notes that the kuna has been pegged to the euro for
| some time:
|
| > The modern kuna was introduced on May 30, 1994, starting a
| period of transition from the Croatian dinar, introduced in 1991,
| which ended on December 31, 1994.[10] One kuna was equivalent to
| 1,000 dinars at a fixed exchange rate. The kuna was pegged to the
| German mark from the start. With the replacement of the mark by
| the euro, the kuna's peg effectively switched to the euro.
|
| So I doubt there will be much effect on the rate of inflation
| after the switch.
| jacquesm wrote:
| It will help the locals tremendously because their income will
| now be in the same currency as most of their debts. This trick
| has been used by banks all over the eurozone: charge the debt
| to the locals in euros but they can only earn income in the
| local currency. So if the local currency slides against the
| euro - as they invariably do - a larger and larger fraction of
| the income goes to servicing the debt. Even Poland still
| suffers from this today.
| Octokiddie wrote:
| Unless the peg breaks, the currency doesn't "slide."
| cm2187 wrote:
| Welcome on board the Titanic.
| [deleted]
| supr_strudl wrote:
| Hello fellow Croatians. Congratulations and all good. Your
| Slovenian neighbor, who very much enjoys visiting Croatia.
| [deleted]
| yieldcrv wrote:
| Congratulations Croatia! Sad that means once less country I can
| get a passport stamp from, but glad it means less hassle.
| Svip wrote:
| You can still _sort of_ get a stamp from them. When you
| enter/leave the Schengen area, you get a stamp. The stamp will
| indicate which country you entered/left the Schengen area.
| (Obviously, if you have a passport from within the Schengen
| area, you get no stamp.)
|
| Then again, I've also noticed that US passport control has
| stopped stamping my passport.
| matsur wrote:
| You can still ask US passport control for a stamp if you
| really want one.
| et-al wrote:
| A handful of airports are no longer stamping. So maybe you
| can ask for a stamp, but in the near future I assume that
| will not be a possibility at all.
|
| https://ogletree.com/insights/cbp-expands-pilot-program-
| elim...
| haunter wrote:
| You can most certainly get one if you arrive by cruise/ship
| which left a non-EU port
| nikanj wrote:
| They will happily stamp your passport if you ask them
| senko wrote:
| This might be relevant to HN readers that are (or consider)
| digital nomads. Croatia's been pushing hard on making it easy for
| them to come and temporarly work from here.
|
| Not having to leave/reenter Schengen area when visiting/leaving
| Croatia and dealing with yet another currency will definitely
| make their lives a bit easier.
| sixhobbits wrote:
| On the flip side, digital nomads often look for places like
| Croatia that are similar to Schengen countries and border
| schengen territory to spend time in to "recharge" their
| schengen 90-day window (depending on your passport/ visa you
| may only stay in schengen for 90 days in any given 180 day
| window)
| hyzyla wrote:
| It was me this summer: Schengen -> 1 month in Montenegro -> 2
| months in Croatia -> Schengen
| orangepurple wrote:
| Soon it will be Romania and Bulgaria :)
| jacquesm wrote:
| They will have a harder time because they will
| effectively be a new outer border and especially for
| Bulgaria there are some challenges in dealing with this.
| Which is a pity because I personally would love Romania
| and Bulgaria to become part of Schengen. It makes life so
| much easier if you travel there frequently.
| satvikpendem wrote:
| I was about to say, as someone who DNs sometimes, I like
| countries like Croatia where I could recharge the Schengen
| window. Technically you can live in the EU forever if you
| keep rotating every 90 days, but practically speaking, I'm
| not sure if border agents will refuse your entry if you keep
| doing that.
| SapporoChris wrote:
| Some of the countries like Poland have bilateral agreements
| with USA allowing 180 days in country. Which makes the
| recharge rate very minimal, basically just get out for a day,
| then return to Poland.
|
| Excerpt from Poland's policy.
|
| "Yet further, above the framework of the Schengen visa
| exemption of 90 days in any 180-day period, Argentine,
| Chilean, Costa Rican, Honduran, Israeli, Japanese, Malaysian,
| Mexican, Nicaraguan, Panamanian, Singaporean, South Korean,
| United States and Uruguayan nationals are permitted to spend
| an extra period of 90 days visa-free in Poland."
| datafulmanak1 wrote:
| [dead]
| Terretta wrote:
| Given it opens on 1 Jan, does anyone know the story behind this?
|
| > _However, border checks will end only on March 26 at airports
| due to technical issues._
|
| Inability to e-parse which group a passport belongs to?
| dogma1138 wrote:
| There will be no passport control what so ever for inner
| Schengen flights so it doesn't matter what passport you are
| holding so it's more likely to have to do with the design of
| the arrivals routes as well as being able to selectively
| configure arrival gates for Schengen vs international to make
| sure that only Schengen flights bypass passport control.
| senko wrote:
| My understanding is the gates will be reallocated to avoid the
| passport checks. This is a bit more involved than just raising
| the ramps at road crossings.
| Terretta wrote:
| My first thought too, but something about "technical issues"
| phrasing sounded more _e-something_.
|
| Also physical builds with plenty lead time tend to happen,
| while e-plans tend to miss dates.
|
| So just curious.
| dkjaudyeqooe wrote:
| This is a measure to help the airline industry adapt to the
| change.
|
| March 26 is the date of the switch from the winter schedule to
| the summer schedule for airlines. There are differing rules and
| visas for entry into Croatia versus Schengen, and changes on
| the ground like different gate assignments, and given the
| timing of the final decision (Dec 9th, midway through the
| winter schedule) it would have meant that airlines would be
| speculatively changing the rules on their flights mid year,
| which is obviously unworkable.
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