Croatia switched to the Euro and entered the passport-free Schengen area on 1 January, two major milestones for the country after joining the EU nearly a decade ago.
At midnight local time, the Balkan nation said goodbye to its Kuna currency to become the 20th member of the eurozone.
It also became the 27th nation in the passport-free Schengen zone, the world's largest, which enables more than 400 million people to move freely around its members.
Experts say the adoption of the euro will help shield Croatia's economy at a time when inflation is soaring worldwide after Russia's invasion of Ukraine sent food and fuel prices through the roof.
But feelings among Croatians are mixed: while they welcome the end of border controls, some worry about the euro switch, with right-wing opposition groups saying it only benefits large countries such as Germany and France.
"We will cry for our Kuna, prices will soar," said Drazen Golemac, a 63-year-old pensioner from Zagreb.
Many Croatians fear that the introduction of the euro will lead to a hike in prices, in particular that businesses will round up prices when they convert.
'Elite club'
Use of the euro is already widespread in Croatia.
Croatians have long valued their most precious assets such as cars and apartments in euros, displaying a lack of confidence in the local currency.
About 80 percent of bank deposits are denominated in euros and Zagreb's main trading partners are in the eurozone.
Officials have defended the decision to join the eurozone and Schengen, with Prime Minister Andrej Plenkovic saying Wednesday that they were "two strategic goals of a deeper EU integration".
Croatia, a former Yugoslav republic of 3.9 million people that fought a war of independence in the 1990s, joined the European Union in 2013.
"The euro certainly brings (economic) stability and safety," Ana Sabic of the Croatian National Bank (HNB) told the French press agency AFP.
Experts say the adoption of the euro will lower borrowing conditions amid economic hardship.
Croatia's inflation rate reached 13.5 percent in November compared to 10 percent in the eurozone.
Analysts stress that eastern EU members with currencies outside of the eurozone, such as Poland or Hungary, have been even more vulnerable to surging inflation.
(With AFP)
