Croatia, the euro and a coffee controversy – but is it all just froth?

Coffee-loving Croatians in central Zagreb are experiencing higher prices since the country started using the euro.

Only the very brave – or the very foolish – would dare come between a Croatian and their coffee.

Zagreb’s streets are full of cappuccino-sipping locals even in the winter months.

Several people have reported bitter aftertastes after drinking their favorite beverage early in the New Year.

A decade after becoming the newest – and still newest – member of the European Union, Croatia adopted the euro on 1 January.

In the midst of all the talk about price hikes – real or imagined – it would be easy to forget why Croatia joined the eurozone in 2013.

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The commitment to the euro is one thing, but adopting it is quite another. Croatia’s neighbor Hungary scrapped its forint in 2007, but it remains outside the eurozone 16 years later.

Only Bulgaria seems set to join the single currency in 2024. Poles, Romanians, Swedes and the Czech Republic are theoretically obligated to adopt the euro, but none have plans to do so.

Croatia’s determination to meet the euro’s convergence criteria is therefore all the more impressive. A number of factors contributed to its stability – inflation, a deficit in the government’s budget, a debt-to-GDP ratio, and long-term interest rates.

According to Guy De Launey, cafés, bars, restaurants, and shops have to display prices in both the old and new currency until next year. If the predictions hold true, the benefits should become apparent within the next few years. As Croatians get used to carrying the new currency, they remain concerned about taking a hit to their pocket.

The kuna can no longer be spent, but retailers must still display prices in old money until the end of the year.