Convergence supports euro adoption
Croatia is not only keen on euro adoption, but also seems to be ready in economic terms. In 2019, Croatian GDP (measured in PPS) stood at 60% of the EU15, thus landing just under the average convergence level of the eight member states that have adopted the euro most recently (i.e. 62%). As supported by recent research from the CNB, the relatively high degree of synchronization between the domestic and EA economic cycles (similar findings also apply to Bulgaria and Romania) is encouraging, suggesting only modest drawbacks of giving up monetary sovereignty.
Since entering ERM-II, all eight countries have converged, apart from Greece, which has been hit hard by its debt crisis, and Cyprus, which was already relatively developed at the time of ERM-II entry. Looking at past experience, the convergence story was stronger in GDP terms than in inflation terms, implying that fears of rapid price increases upon adoption seem overdone.
Other CEE countries lack necessary preparation
The highest expectations of early euro adoption are obviously in Croatia and Bulgaria, two countries that have made euro adoption a strong political goal and taken concrete actions to achieve it. In Croatia, more than 50% of citizens expect euro adoption to take place within five years. In other CEE countries, expectations are not very high for the next five years, but the vast majority expect that it might be adopted in this decade. Rather high expectations are witnessed in Romania, followed by Hungary, where citizens are the most positive about the benefits of the euro. Unfortunately, both countries lack the necessary preparation and Romania does not meet any of the Maastricht criteria at the moment.