overcome two crises from the recent past. the consequences of the 2020 pandemic crisis and the russian invasion of ukraine in 2022 were borne with much less disturbance and stress due to the fact that croatia was at the time a serious candidate for euro area accession, which helped anchor exchange rate expectations, thus making it easier for the cnb to maintain the stability of the kuna exchange rate against the euro and focus on countercyclical monetary policy measures, and contributed to alleviating pressures on the public debt market. in the period preceding the introduction of the euro, markets recognised the continued improvement of macroeconomic fundamentals that were closely linked to the process of introducing the common currency. this process developed in parallel with the ( already mentioned ) convergence of interest rates in croatia with those in euro area countries as well as with the gradual improvement of credit rating, today literally on the verge of a1 investment grade rating, which has never been the case before. let me remind you that croatia's rating in 2017 was bb, two notches below investment grade. in the years that followed, credit rating agencies increased the rating and outlook for the croatian economy. in 2019 croatia reached the minimum investment grade rating ( bbb - ) and in 2022, against the background of the eu council decision on the adoption by croatia of the euro, the credit rating was raised to bbb + ( by two notches ), coming close to a investment grade rating. let me briefly refer to one aspect of euro introduction that raised concerns with part of the general public : inflation, that is, the effect of euro introduction on prices. i am glad to be able to confirm, on the basis of analyses and assessments made by cnb and ecb experts, and subsequently eurostat, that the impact of euro introduction on prices has been very mild. according to the cnb's analysis ( and that of the ecb ), the euro's impact on prices was 0. 4 percentage points, whereas the eurostat's analysis 2 / 3 bis - central bankers'speeches established that this impact was at the maximum 0. 2 percentage points. this level of the euro's impact on prices was within expectations and completely in line with the experience of other countries that had introduced the euro before croatia, despite the circumstances of historically high global inflation under which croatia introduced the euro. it was precisely this context that gave rise to sporadic comments stating that the timing for euro introduction was inappropriate owing to high inflation and the strong

boris vuji : one year with the euro speech by mr boris vuji, governor of the croatian national bank, at the conference " one year with the euro ", zagreb, 30 january 2024. * * * today, one year after the introduction of the euro, we can look back at this historical event and its effect on croatian economy and society as a whole. if i were to sum up in one sentence what the euro has brought to croatia, i would say it has brought all the benefits that we expected and announced, making the croatian economy stronger and more resilient, which was particularly evident amid the specific circumstances of the crisis in which it was introduced. we entered the euro area in circumstances we could have hardly envisaged at the time when we started our journey towards the euro six, seven years ago. it was at the peak of the covid - 19 pandemic in the summer of 2020 that we launched our operational preparations for the euro and we introduced the euro at the time when inflation soared at levels unseen in the western world since the end of the 1970s. in that regard, it is clear that no other eu member state has introduced the common currency against such a background. also, the transition to the euro took place at the time of the strongest monetary policy tightening ever. and lastly, the pronounced geopolitical tensions and uncertainties provided an additional dimension, both economic and political, to the achieved economic and monetary integration of our country. all these specific circumstances notwithstanding, the project of the introduction of the euro was completed successfully in the shortest possible time and the expected economic benefits of the transition to the euro were fully achieved. i would also venture to say that it is exactly such circumstances that made some of the positive effects of the introduction of the euro even greater and more significant. we have always stressed the elimination of the currency risk as one of the main expected positive effects of the introduction of the euro. and this objective was fully achieved. today, the debt of all the sectors in foreign currency is less than 1 % of the total debt, in contrast with some 70 % previously. this is a big leap for croatia, which helped lower the county's risk premium and also restricted the transfer of higher interest rates globally to the domestic financial system. in line with expectations, borrowing costs in croatia are currently lower than they would have been had we remained outside the euro area. namely, we have foreseen that the changeover to euro would lead to the relative