(Bloomberg) -- Croatia expects a positive assessment by the European Central Bank on the state of its financial industry, as part of its efforts to enter the European Union’s banking union and the euro-area waiting room, according to two people with knowledge of the situation.
The comprehensive assessment of the country’s five biggest banks is expected after trading hours Friday, said the people, who asked not to be identified as the matter is not yet public. The banks are expected to have satisfied conditions in an asset quality review and passed the stress tests, according to the people.
Prime Minister Andrej Plenkovic said last month that Croatia has fulfilled all the criteria needed to enter the pre-euro exchange-rate mechanism known as the ERM-2 and the banking union, and will advance toward adopting the common currency. He said the heavily euroized economy expects to spend about 2 1/2 years in the euro waiting room, before the currency switch.
The ECB’s press office declined to comment when reached by phone in Frankfurt.
The next steps should come from the European Central bank, the group of nations already sharing the euro, and Eurostat, as they evaluate Croatia’s compliance before the nation can formally ask to be admitted into the ERM-2. Central bank Governor Vujcic has said that should be done in the second half of the year, regardless of the Covid-19 crisis.
©2020 Bloomberg L.P.
Advertisement