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Eurozone warning: Croatia is making a ‘big mistake’ by subscribing to a troubled currency | Politics | New

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Meanwhile, Professor Daniel Hodson fears that with the European Union determined to push forward the “federal project”, there will be no winners in the face of what he called a “looming debt crisis of the euro zone”. The bloc is set to remove the final hurdles to Croatia’s adoption of the euro, paving the way for the euro zone’s first expansion in seven years.

Finance ministers are due today to approve three laws that will enable Croatia to become the 20th member of the monetary union. The last EU country to commit was Lithuania in 2015.

Mr Habib, who took a close look at the workings of Brussels during his brief but eventful stint as a Brexit Party MEP in 2019, said: “Croatia is making a big mistake. In pursuit of lower borrowing costs in this time of global economic difficulties, it is sacrificing its sovereignty by joining the euro.

“Yes, monetary union is openly an economic tool, but its ultimate end is political union.

Ursula von der Leyen worries about the fall of the euro (Image: GETTY)

Andrej Plenkovic

Andrej Plenkovic, Croatian Prime Minister, yesterday (Monday) (Image: GETTY)

“By joining the euro, it cedes control of a major component of governance, through which the EU will drive its political agenda. We have seen this throughout the Eurozone.

Even economically, the euro was “no panacea”, said Mr Habib, who is the managing director of a commercial property investment and fund management firm.

He explained: “It may reduce borrowing costs in the short term, but in the end it is the Croatian people who will suffer from this lower borrowing cost.

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Ben Habib

Ben Habib is a former Brexit Party MEP (Image: GETTY)

“The next time there is an economic setback, they cannot deflate their currency to rebalance. Instead, they will have to deflate their economy with all the attendant unemployment, reduced living standards and possibly even civil unrest.

“We saw how it worked in Spain, Italy, Greece and Slovakia, to name a few, during the credit crisis of 2008. Greece was perhaps the worst and came close to widespread civil disobedience.

Mr. Habib concluded: “Joining the euro seems particularly strange for Croatia given the enormous sacrifices it made to gain independence from Yugoslavia. I hope they will not come to regret this day.

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Charles Michel

Charles Michel, President of the European Council, welcomed the plan (Image: GETTY)

Gordon Brown

Gordon Brown is widely credited with preventing the UK from joining the eurozone (Image: GETTY)

Professor Hodson, chairman of the CityUnited project, vice-chairman of the Campaign for an Independent Britain (CIBUK) and former director of Vote Leave, said: ‘It is typical of the EU to want to continue with its federal government based in the euro area. project, whatever the consequences.

“But there will be no short-term winners, as international currency markets clearly indicate.

“Another member cannot hedge the risks of an impending debt crisis in the Eurozone, and the Croatian people will surely suffer from even greater inflation as a result of this untimely decision.”

EU budget groups

Mapping EU fiscal factions (Picture: Express)

Last month, the European Council backed Croatia’s entry on January 1, 2023.

Andrej Plenkovic, Prime Minister of the country, tweeted: “Today at the European Council, Croatia received the support of the highest political level for its accession to the euro zone.

“On January 1, we will achieve the Croatian government’s strategic goal of joining the euro zone.

“The benefits of membership will be felt by Croatian citizens and the economy, which will be even more crisis-resistant.”

Professor Daniel Hodson

Professor Daniel Hodson was the director of the Vote Leave campaign (Photo: Brugge Group)

European Council President Charles Michel added: “The euro is a monetary expression of our common destiny and part of our European dream. Today, Croatia’s dream has come true.”

As of today (Tuesday), the euro was trading near parity with the US dollar – its worst level in two decades.

Britain never chose to join the euro, despite being a member of the EU.

Former Labor Prime Minister Gordon Brown is widely credited with preventing the UK from joining while chancellor, arguing that five key criteria were not met, making membership economically unviable.