09 May 2023

Croatia in the Eurozone: "The vast majority of the new financial flows will occur in the digital space"

Croatia has achieved a significant milestone in its EU integration efforts in 2023. After a decade of EU membership, the Balkan nation has successfully entered both the Euro and Schengen zones. This marks a significant shift in how Croatian citizens and businesses engage with and leverage the benefits of the EU Single Market as it turns 30 this year.

Change is already at full swing, in fact. And that’s why, for the second edition of our Digital Across Borders series, we have had a chat with Tomislav Rados, Vice President for Industry and Sustainable Development at our Croatian member HGK.


Tomislav Rados, Vice President for Industry and Sustainable Development at HGK

Question: How will Croatia’s digital landscape benefit from entering the Schengen and the Euro zones?

Answer: One positive effect we certainly expect is to see an increase in cross-border transactions and financial flows as the removal of currency risk reduces transaction costs. The vast majority of these flows will occur in the digital space.

Q: Are Croatian small and medium sized businesses going to become more competitive, in your opinion?

A: Increased transparency in pricing will certainly lead to more competitive businesses as a result of a more dynamic market environment; and it will also reduce transaction costs. In addition, access to financing will improve for small and medium sized businesses…and that will bear significant benefits for consumers and public institutions.

Q: Entering the Schengen and the Euro zone furthers your integration in the European Single Market, which is celebrating its 30th anniversary this year. What barriers do you think are preventing Croatian SMEs from scaling up across Europe?

A: The single market is truly the backbone of Europe’s resilience, but we need to keep working on simplifying procedures and making the system less complex, especially when it comes to access to information online. A better legal framework for SMEs is crucial, as is the need to reduce bureaucratic burdens. Barriers currently faced by SMEs include skills shortage, the  soaring energy cost, heavy-handed regulations and red tape, difficulty to access finance, inefficient production costs and limitation of raw material…All of this has been exacerbated by the pandemic and the Ukraine war.

Q: What’s the most trending digital topic in Croatia? Are AI, data regulations part o f the national agenda?

A: AI is definitely one of the areas where our companies are trying to develop their products and solutions. Our national agenda stresses interoperability as a crucial segment and here AI can be useful. Getting this right will lead to a valuable exchange of information between disconnected systems of different public and governmental institutions (information silos).


“Technology regulations must be flexible enough to keep up with the fast pace of digital innovation”


Q: We could then say that AI is the most pressing issue in Croatia’s digital landscape?

A: It’s difficult to say. When Croatia was reviewing the European Digital Infrastructure Consortium, several topics arose as significant for us: chips, autonomous vehicles, AI, blockchain…We are talking about very dynamic areas that are constantly changing, so the priorities and trends are fluctuating as well. The most important thing is to enable an equal level of development for all digital areas and technologies – and in every Member State.

Q: What do we need in Europe to boost innovation, attract more talent and lead in the technological race?

A: There are many factors at play here: attracting and keeping top talent, supporting private investment in R&D, deepening the connection between our economy and our science community, investments in green technology, etc. Given the global challenges we face and Europe’s goal to become more independent in terms of resources, we need to direct EU funds into developing and implementing new technologies and to build innovation ecosystems to create high-tech products.

Q: How is Croatia contributing to this agenda?

A: We have recently adopted the Digital Croatia Strategy 2032. It aims to boost the uptake  of advanced technologies such as 5G/6G, AI, machine learning, cloud computing, big data, and blockchain in the public and private sector. And it also remains open to implementing future disruptive technologies yet to emerge in the near future. This is something we need to consider for regulation on technology – to make it flexible enough to keep up with the fast pace of digital innovation.

For more information, please contact
Samia Fitouri
Senior Communications Manager
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