Opinion of the European Central Bank of 14 April 2022 on the introduction of the euro in the Republic of Croatia (CON/2022/15)
Date: 2022-04-14
Institutions: European Central Bank
Subjects: foreign-exchange reserves, money

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/2022/15) 

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/EC1, 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 law 2 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  monetary  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  compensation  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  

2  

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).  
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. 

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 Council3 and the Single Euro 

Payments 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 

dimension 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  

4  
5  

6  
7  
8  

9  

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). 
See Article 4(1)(3), 4(1)(10), 4(1)(17), Article 13(1), Articles 14 and 33, and Article 54(1) and 54(3) of the draft law. 

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. 

Article 3(1)(c) of the Treaty. 
Article 139(2) of the Treaty. 

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. 
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. 

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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 diverging 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 recommends 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 Member 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 

coins 18 and that it is intended that HNB will be the legal issuer of euro coins. In this respect, the draft 

10  

11  
12  
13  
14  
15  
16  
17  
18  

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 paragraph 2.2 of CON/2006/10. 

See paragraph 13 of CON/2005/21; paragraphs 2.2 and 3.2 of CON/2006/10.  
See paragraph 2.2 (footnote 6) of Opinion CON/2007/43. 

See Article 4(1)(34) of the draft law. 
See Articles 54(1) and 54(3) of the draft law. 

See paragraph 2.3 of Opinion CON/2006/10. 
Greece, Finland, Ireland, Luxembourg and Malta; see paragraph 2.1 of Opinion CON/2016/4. 
Cyprus, Estonia, Latvia, Lithuania and Slovakia; see paragraph 2.1 of Opinion CON/2016/4. 

See Article 4(1)(3) of the Law on HNB (Official Gazette No. 75/08, 54/13, 47/20). 

3 

 
 
 
 
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 Republic 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 Article 128(2) of the Treaty 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 in the 

Republic of Croatia 21 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 that 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  
20  
21  
22  

23  
24  

See Article 33 of the draft law. 

See Article 101 of the Law on HNB (Official Gazette No. 75/08, 54/13, 47/20). 
See Article 13(1) of the draft law. 

Judgment of the Court of Justice of 26 January 2021, Hessischer Rundfunk, C-422/19 and C-423/19, EU:C:2021:63, 
paragraph 46. 
See Article 14 of the draft law. 

See Article 5 of Council Regulation (EC) No 1103/97. 

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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  values 27  in  the  draft  law  by  introducing  special 

rounding rules for unit prices of goods and services 28, 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 currencies 29 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 exchange reference rates (ECBRR) 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 ECBRR but these are meant 

only  for  public  information  and  the  ECB  does  not  advise  that  these  ECBRR  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 regulations 31, 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  

26  
27  
28  
29  
30  
31  

Judgment of the Court of Justice of 14 September 2004, Verbraucher-Zentrale Hamburg, C-19/03, EU:C:2004:524, 
paragraphs 35 and 36. 

See also paragraph 22 of the Opinion CON/2005/21. 
Judgment of the Court of Justice of 14 September 2004, Verbraucher-Zentrale Hamburg, C-19/03, EU:C:2004:524. 

See Article 15 of the draft law. 
Article 17(1) of the draft law. 
Article 17(2) of the draft law. 

Articles 38(1) – 38(7) and Article 62(4) of the draft law. 

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control of the verification of the authenticity and fitness of euro coins and the procedure 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 

6