Zagreb (AFP) - At a time when inflation is soaring in Europe and geopolitical winds are not favorable for the bloc, Croatia is hoping its switch to the euro will bring some semblance of protection to the Balkan nation in a world of uncertainty.

On January 1, Croatia will deposit its currency, the kuna, becoming the twentieth member of the eurozone.

Croatia, which joined the European Union nearly a decade ago, recorded an annual inflation rate of nearly 13 percent in September, while it reached 10 percent in the eurozone.

And in the period before the transition to the single European currency, the authorities did not stop talking about the advantages of adopting the euro for the country with a population of 3.9 million people.

"The euro brings flexibility," Ana Sabic of the Croatian National Bank told AFP, arguing that Zagreb would be able, if necessary, to obtain better borrowing terms amid tough economic times.

Since July, the European Central Bank has embarked on a policy of monetary tightening as it tries to rein in accelerating inflation caused by high energy and food prices caused by Russia's war in Ukraine.

Analysts consider that eastern European countries in the European Union that hold currencies outside the eurozone, such as Poland and Hungary, were even more vulnerable to higher inflation.

"It's actually the perfect moment to switch to the euro," said Goran Saravania, chief economist at the Croatian Chamber of Commerce.

"When great uncertainty dominates the global economy, it is always better for a small and open economy like Croatia to be part of a larger union like the eurozone," he added.

Also, Croatia's main trading partners are in the eurozone, while the tourism sector, which accounts for 20 percent of the country's GDP, is energized by large numbers of European visitors.

Croats have also largely adopted the euro, with 80 percent of their bank deposits in euros.

They priced their most prized possessions such as cars and apartments in euros, demonstrating their distrust of the local currency that dates back to the former Yugoslavia, which was in the grip of hyperinflation before its dissolution.

During the Yugoslav era and after Croatia's independence in 1991, real estate was valued in Deutsche Marks until the advent of the euro two decades ago.

"Life will be easier. We calculate everything in euros anyway," said Roman, an economist from Zagreb who declined to give his full name.

For his part, Milan Bator, a retired pharmacist, rejected the concerns of people who fear that some traders will take advantage of the shift to the euro to spin the price numbers upwards.

"It's other reasons, like wars and material shortages, that drive prices up. We can't blame everything on the euro," Bator said.

But some are still concerned that they will suffer a financial blow as a result of the move.

"Maybe the timing wasn't ideal, maybe we could have postponed it a bit given the situation in the world," Zdravka Antonic, a flower seller in a Zagreb market, told AFP.

"People are already worried about how everything will end, and the euro only adds to the uncertainty," she added.

Since the beginning of September, flower bouquets, like other goods and services, have been priced in both currencies, with the conversion rate set by Brussels at 7.53 kuna per euro.

This system will remain in effect throughout the year 2023.

"A country that has its own currency is more independent. But when we joined the European Union, we accepted trading in euros as well," said vegetable seller Ana Bricic.

Right-wing and conservative opposition groups protested the adoption of the new currency, saying that the kuna was an important symbol of national identity, noting that the euro only benefits larger countries such as Germany and France.

But an attempt last year to organize a nationwide referendum to challenge the adoption of the euro failed.

Some Croats fear that once they adopt the euro, the stark reality of how poor they are compared to many citizens of the EU's neighbors will become even more apparent.

According to the latest Eurostat statistics published in 2018, the average monthly salary in Croatia was only 1,179 euros, compared to more than 2,300 euros in the European Union.

About 300,000 Croatian pensioners receive a monthly pension of barely 260 euros.

"It will create a feeling of poverty and misery," said Anna Knezewicz, director of the National Consumer Protection Association.