Keywords

euro, trade in goods, tourism, foreign investment, Croatia

This paper presents the results of selected empirical research on the euro's effect on trade, foreign investment and tourism, and gives a brief analytical overview of the developments in individual euro area countries, particularly newer member states and tourist destinations. Based on that, and taking into account Croatia's close ties to the euro area, we estimate that the introduction of the euro, due to lower transaction costs, easier price comparison and currency risk reduction, might provide a small boost to Croatian trade in goods and services, particularly in tourism, and encourage foreign investment.