Given the fact that the European Union's socio-political fabric was falling apart at the seams, it made little sense – for outsiders – that Croatia wanted to join the 27-member bloc of nations earlier this year. Yet given the sheer scale of momentum moving in favor of integration – despite the fact that the bloc's banking and financial oversight organization had yet to even be fully debated in the EU Parliament – it was doubtful that Croatia would pull out of the deal at the last second.
Two months later, the tiny nation is already in trouble. According to the Croatian government, exports have tumbled by nearly 11 percent year-over-year, underscoring the significant economic challenges that Croatia faces as a EU member. Poslovni Dnevnik, a regional newspaper, reported that the Central European Free Trade Agreement (CEFTA), which Croatia is a party to, has led to restrictions that have stifled growth and innovation in the area's economy.
Let's unpack this issue a bit to understand how the development illustrates the wider European quandary. First and foremost, it must be acknowledged that the continent is suffering from an economic depression. While GDP figures are pushed higher thanks to direct market intervention and the unfair weighing of the financial sector in determining those numbers, consumer spending remains suppressed and unemployment is still above 11 percent. Additionally, the structure of the eurozone – the bloc to which many EU members are a part of – prevents debtor nations from inflating their currencies through the quagmire. As a result, there are few competitive markets for Croatia to sell goods to, even if some of the fiscal barriers have been brought down by its inclusion in the EU.
Plunging exports are happening elsewhere in the world, highlighting the need for investors to protect themselves, especially if they are approaching retirement. Learn more by exploring our website further today.