EN ECB -PUBLIC  
 
OPINION OF THE EUROPEAN CENTRAL BANK  
of 14 April  2022  
on the introduction of the euro in the Republic of Croatia  
(CON/20 22/15) 
 
Introduction and legal basis  
On 9 March 2022 the European Central Bank (ECB) received a request from the Ministry of Finance of the 
Republic of Croatia for an opinion on a draft law on the introduction of the euro as the official currency in 
the Republic of Croatia (hereinafter the ‘draft law’) . 
The ECB’s competence to deliver an opinion is based on Articles 127(4) and 282(5) of the Treaty on the 
Functioning of the European Union and on the first, second and third indents of Article 2(1) of Council Decision 98/415/EC
1, as the draft law relates to currency matters, means of payment and Hrvatska Narodna 
Banka (HNB). In accordance with the first sentence of Article 17.5 of the Rules of Procedure of the 
European Central Bank, the Governing Council has adopted this opinion.  
 
1. Purpose of the draft law  
The main objective of the draft law is to facilitate the introduction of the euro in the Republic of Croatia, and 
to address issues relating to the euro’s introduction to the extent that relevant Union law2 does not address 
them and they do not fall within the Union’s exclusive competence in the area of monetary policy. In 
particular, the draft law lays down rules governing: (1) the basic principles governing the euro changeover; 
(2) rules on the conversion and rounding of moneta ry values from kuna to euro; (3) the supply and 
changeover from kuna cash to euro cash; (4) dual circulation and dual display issues; (5) the application of 
the principle of the continuity of legal instruments; (6) the conversion of funds and legal instruments, and 
adjustments of interest rates; (7) informing clients regarding these matters; (8) the conversion of the nominal 
values of debt securities, share capital, equity securities; (9) the conversion of salaries, pensions, social 
benefits and other compe nsation to citizens and households; (10) budgets, financial plans, financial 
records, financial reports and taxes in the process of the introduction of the euro; (11) supervision over the 
application of draft law; (12) misdemeanour provisions; and (13) transitional provisions.  
 
 
1  Council Decision 98/415/EC of 29 June 1998 on the consultation of the European Central Bank by national authorities 
regarding draft legislative provisions (OJ L 189, 3.7.1998, p. 42).   
2  See, in particular, Council Regulation (EC) No 1103/97 of 17 June 1997 on certain provisions relating to the introduction 
of the euro (OJ L 162, 19.6.1997, p. 1); Council Regulation (EC) No 974/98 of 3 May 1998 on the introduction of the 
euro (OJ L 139, 11.5.1998, p. 1).  
 
2 2. General observations  
2.1 The ECB welcomes the draft law’s objective to facilitate a smooth changeover to the euro in the 
Republic of Croatia, as well as a timely implementation of the necessary measures in connection therewith.  
2.2 The procedure of the changeover applies not only to banknotes and coins but also to (electronic) 
payment instruments. In this respect, any national legal provisions and/or market practices related 
to the electronic processing of credit transfers and direct debits will need to comply with the provisions 
of Regulation (EU) No 260/2012 of the European Parliament and of the Council
3 and the Single Euro 
Payment s Area payment schemes governed by it.  
2.3 Certain provisions of the draft law reiterate relevant provisions of Union law using the same or slightly different language.
4 The ECB understands that the intention of the Croatian authorities is to facilitate 
the application in the Republic of Croatia of such relevant provisions of Union law. In principle, 
however, such reiteration is to be avoided. In this context, the ECB recalls that the reproduction in a national provision of a Union provision that is directly applicable in the legal order of the Member 
State may create uncertainty both as to the legal nature of the applicable provisions and as to the 
date of their entry into force. This would not align with the uniform application and interpretation of Union law throughout the Union.
5 Moreover, to the extent that a national provision uses wording 
different from the relevant Union provision for the introduction of the euro, it potentially creates 
regulatory content of its own, which would not be in line with the Union’s exclusive competence in 
matters of monetary policy for the Member States whose currency is the euro.6 The concept of 
monetary policy is not limited to its operational implementation, which, under the first indent of 
Article  127(2) of the Treaty, is one of the basic tasks of the Eurosystem7, but also entails a regulatory 
dimensi on intended to guarantee the status of the euro as the single currency.8 In accordance with 
Article 2(1) of the Treaty, the Union’s exclusive competence in matters of monetary policy precludes Member States from adopting a provision which, in the light of  its objective and content, establishes 
legal rules governing the use of the euro as the single currency, unless Member States are acting on 
the basis that they have been empowered to do so or for the implementation of Union acts.
9 
 
 
3  Regulation (EU) No 260/2012 of the European Parliament and of the Council of 14 March 2012 establishing technical 
and business requirements for credit transfers and direct debits in euro and amending Regulation (EC) No 924/2009 
(OJ L 94,  30.3.2012, p. 22).  
4  See Art icle 4(1)(3), 4(1)(10), 4(1)(17), Art icle 13(1), Art icles 14 and 33, and Article 54(1) and 54(3) of the draft law.  
5  Judgment of the Court of Justice of 7 February 1973, Commission v Italy, C-39/72, EU:C:1973:13, paragraphs 16 and 
17; Judgment of the Court of Justice of 10 October 1973, Variola , C-34/73, EU:C:1973:101, paragraphs 9 to 11; 
Judgment of the Court of Justice of 2 February 1977,, Amsterdam Bulb, C -50/76, EU:C:1977:13, paragraphs  5 to 8. 
See also paragraph 2.1 of Opinion CON/2006/10; paragraph 2.4 of Opinion CON/2006/29; paragraph 2.1 of Opinion 
CON/2007/1; paragraph 2.2 of Opinion CON/2007/43, and paragraph 12 of Opinion CON/2005/21. All ECB Opinions 
are available on EUR -Lex. 
6  Article 3(1)(c) of the Treaty.  
7  Article 139(2) of the Treaty.  
8  Judgment of the Court of Justice of 26 January 2021, Hessischer Rundfunk , C-422/19 and C -423/19, EU:C:2021:63, 
paragraph 38.  
9  Judgment of the Court of Justice of 26 January 2021, Hessischer Rundfunk, C -422/19 and C -423/19, EU:C:2021:63, 
paragraphs 52 and 58.  
 
3 2.4 In this light, the ECB generally invites the Croatian authorities to consider deleting the directly 
applicable provisions of Union law that have been reiterated in the draft law. It recalls, however, that 
the incorporation of some elements of directly applicable provisions of Union law into national law is 
warranted only in exceptional circumstances for the sake of coherence and in order to make them 
comprehensible to the persons to whom they apply.10 Such exceptional circumstances do not exist, 
if the directly applicable provisions of Union law are sufficiently coherent and comprehensive making 
it unnecessary to repeat or reflect them in national law.11 If, in contrast, such exceptional 
circumstances do exist, the reproduction of elements of directly applicable provisions of Union law 
should be done precisely, either by incorporation or reference, without modifying their wording.12 
 
3. Specific observations  
3.1 Definition of ‘legal instrument’  
3.1.1 The draft law defines the term ‘legal instrument’ as a legal instrument as regulated by Regulation (EC) 
No 1103/9713. However, in various instances, the draft law also makes reference to the term ‘contract 
and other legal instruments’.14 This slightly deviating reproduction of a term used in directly applicable 
Union law is to be avoided in order to safeguard the uniform application of Union law and to not 
produce national regulatory content that would encroach on the Union’s exclusive competence in matters of monetary policy by, in this case, risking to create a div erging definition of ‘legal instrument’. 
In the case of the definition in Regulation (EC) No 1103/97, no exceptional circumstances arise in which its reproduction would be warranted. The provision on the application of the reference to euro 
in legal instruments and the principle of continuity in that Regulation, in addition to being directly 
applicable, are clear and sufficiently comprehensive.
15 The same must hold for the definition of ‘legal 
instrument’ on which this provision builds. Therefore, the ECB r ecommends replacing terms such as 
‘contract and other legal instruments’ by the term ‘legal instrument’ throughout.   
3.2 HNB’s role as legal issuer of euro coins  
3.2.1 According to Article 128(2) of the Treaty, the right to issue euro coins rests with the Me mber States. 
Therefore, it is up to each euro area Member State to specify the legal issuer of euro coins. In most 
euro area Member States issuance of euro coins is undertaken by the State. In five of those States 
the national central banks (NCBs) act as agents for their treasuries with regard to minting euro coins 
and putting them into circulation16. In five other Member States of the euro area coin issuance is a 
competence of the NCB17. The ECB understands that HNB is currently the legal issuer of kuna 
coins18 and that it is intended that HNB will be the legal issuer of euro coins. In this respect, the draft 
 
10  See paragraph 12 of CON/2005/21 with reference to Judgment of the Court of Justice of 28 March 1985, Commission 
v Italian Republic, C -272/83, EU:C:1985:147. See e contrario  also par agraph 2.2 of CON/2006/10.  
11  See paragraph 13 of CON/2005/21; paragraphs 2.2 and 3.2 of CON/2006/10.  
12  See paragraph 2.2 (footnote 6) of Opinion CON/2007/43 . 
13  See Article 4(1)(34) of the draft law.  
14  See Articles 54(1) and 54(3) of the draft law.  
15  See paragraph 2.3 of Opinion CON/2006/10.  
16  Greece, Finland, Ireland, Luxembourg and Malta; see paragraph 2.1 of Opinion CON/2016/4.  
17  Cyprus, Estonia, Latvia, Lithuania and Slovakia; see paragraph 2.1 of Opinion CON/2016/4.  
18  See Article 4(1)(3) of the Law on HNB (Official Gazette No. 75/08, 54/13, 47/20).  
 
4 law stipulates that HNB shall ensure the supply of euro cash in the territory of the Republic of Croatia 
by ensuring the production or by procuring the appropriate quantity of euro coins19. Moreover, the 
Law on HNB provides that HNB may issue euro coins subject to approval by the ECB of the volume 
of the issue20. This last phrase partly reproduces Article 128(2) of the Treaty, which is problematic 
from the point of view of the uniform application of Union law (see above). The ECB understands the 
need to define who will be the legal issuer of euro coins in the Rep ublic of Croatia. To clearly define 
HNB’s role without risking to reproduce directly applicable provisions of Union law, the ECB 
recommends clarifying that HNB shall be the legal issuer of euro coins while  making a reference to 
the limits prescribed in Art icle 128(2) of the T reaty  without altering its wording.    
3.3 Status of euro as legal tender in the Republic of Croatia and dual circulation of euro and kuna  
3.3.1 The draft law stipulates that the euro will be the official monetary unit and the legal tender i n the 
Republic of Croatia21 and that the period of dual circulation of the kuna and the euro will last 14 days 
from the date of the introduction of the euro. First, the ECB observes that, from a technical point of view, the status of legal tender is not to be accorded to the euro or to another currency as such, but 
rather to forms of money in that currency, i.e. currently to banknotes denominated in euro as per 
Article 128(1) of the Treaty and to coins denominated in euro by Article 11 of Regulation (EC) 
No 974/98. To the extent that the draft law reproduces these directly applicable provisions of Union 
law, the Croatian authorities may wish to consider deleting them. Moreover, the ECB recalls that the 
concept of legal tender of a means of payment denominated in a currency unit signifies, in its ordinary 
sense, that that means of payment cannot generally be refused in settlement of a debt denominated 
in the same currency unit, at its full face value, with the effect of discharging the debt.
22 The ECB 
notes th at the kuna is treated de facto as legal tender during a transitional period of 14 days from the 
introduction of the euro. Article 15(1) of Regulation (EC) No 974/98 states that banknotes and coins denominated in a national currency unit remain legal tender within their territorial limits until six 
months from the respective cash changeover date at the latest and empowers Member States to 
shorten this period. Accordingly, the draft law, which is to be understood as referring to kuna 
banknotes and coins, does not encroach on the exclusive competence of the Union in matters of 
monetary policy.    
3.4  Rounding rules and principle of neutrality  
3.4.1 The draft law lays down the rules on the conversion and rounding of prices and other monetary 
values
23. The reference to ‘prices and other monetary values’ in the draft law seems to differ from 
Regulation (EC) No 1103/9724, which refers to ‘monetary amounts to be paid or accounted for’ . The 
difference in the wording may create some uncertainty as to the rounding  rules’  scope of  application. 
Care should be taken not to interpret the term ‘monetary amounts to be paid or accounted for’ 
broadly, since it can cover only monetary amounts that give rise to a payment on the consumer ’s 
 
19  See Article 33 of the draft law.  
20  See Article 101 of the Law on HNB (Official Gazette No. 75/08, 54/13, 47/20).  
21  See Article 13(1) of the draft law.  
22  Judgment of the Court of Ju stice of 26 January 2021, Hessischer Rundfunk , C-422/19 and C -423/19, EU:C:2021:63, 
paragraph 46.  
23  See Article 14 of the draft law.  
24  See Article 5 of Council Regulation (EC) No 1103/97.  
 
5 part, namely all monetary debts, and, on the other hand, amounts entered in accounting documents 
or statements, whether they are commercial, accounting or financial, where practical reasons not 
only justify, but also require there to be rounding to the nearest cent25. A broader definition or  
interpretation of the Union law term ‘monetary amounts to be paid or accounted for ’ could create 
uncertainty about the uniform application of Union law. The ECB acknowledges that, exceptionally, there may be a need to reproduce Union law in national law for the sake of coherence and in order 
to make them comprehensible to the persons to whom they apply. However, the Croatian authorities 
may wish to consider aligning the wording of the draft law’s conversion and rounding rules with Union 
law by directly referencing the relevant Union law provisions
26 without altering their wording.   
3.4.2 The ECB understands that the Republic of Croatia seeks to reflect the settled case- law of the Court 
of Justice of the European Union on intermediate values27 in the draft law by introducing special 
rounding rules for unit prices of goods and services28, as lex specialis  to the general rounding rule 
contained in Article 14 of the draft law.  
3.5 Exchange rate list for euro  
3.5.1 The draft law provides that as of the euro introduction date (1) HNB shall  publish HNB foreign 
exchange rate rates for the euro against other currencies29 and (2) the midpoint exchange rates of 
HNB for the euro against other currencies shall be applied for statistical, accounting and tax purposes 
and in all legal instruments in which, before the  euro introduction date, the midpoint exchange rates 
of HNB for the kuna were applied in relation to currencies other than the euro, unless otherwise 
regulated by the relevant regulation30. The ECB considers that if at all possible HNB should use an 
EU regulated benchmark rate for this purpose. Failing that HNB may explore additional alternative 
solutions, such as, for instance, to publish HNB exchange rates for euro against other currencies, 
inspired by the ECB’s daily euro foreign exchang e reference rates (E CBRR) and by other central 
banks' foreign exchange rates or market foreign exchange rates (i.e. a blended rate), and to use 
such HNB exchange rates as a replacement for HNB's midpoint exchange rate. Furthermore, it 
should be recalled that the ECB currently publishes daily euro foreign E CBRR but these are meant 
only for public information and the ECB does not advise that these E CBRR should be used for 
commercial transactions.  
 
4. Consultation of ECB on implementing regulations adopted under draft law  
4.1 The draft law envisages the adoption of several implementing regulations31, including HNB decisions 
on (1) euro cash frontloading; (2) the exchange of kuna cash; (3) the exchange of unfit and suspicious 
kuna cash; (4) the supply of euro cash; (5) the reporting on cash operations data; (6) the conditions 
for the use of copyright work used on the national design of the euro coins and kuna cash; (7) the 
 
25  Judgment of the Court of Justice of 14 September 2004, Verbraucher -Zentrale Hamburg, C -19/03, EU:C:2004:524, 
paragraphs 35 and 36.  
26  See also paragraph 22 of the Opinion CON/2005/21.  
27  Judgment of the Court of Justice of 14 September 2004, Verbraucher -Zentrale Hamburg, C -19/03, EU:C:2004:524 . 
28  See Article 15 of the draft law.  
29  Article 17(1) of the draft law.  
30  Article 17(2) of the draft law.  
31  Articles 38(1) –  38(7) and Article 62(4) of the draft law.  
 
6 control of the verification of the authenticity and fitness of euro coins and the pr ocedure for testing 
the operation of the device for euro coins processing; and (8) the content and the structure of the 
notices on the relevant elements of the conversion. The national authorities should remain mindful 
of the obligation to consult ECB on draft implementing regulations falling within the ECB’s fields of 
competence concerning currency matters, means of payment and NCBs.  
 
This opinion will be published on EUR -Lex.  
 
 Done at Frankfurt am Main, 14 April 2022.  
 
[signed]  
 
The President of the ECB  
Christine LAGARDE