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Croatia's Prime Minister Andrej Plenkovic arrives at the EU summit in Brussels, Belgium June 23, 2017. REUTERS/Eric Vidal

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ZAGREB (Reuters) - Croatia aims to become a euro zone member within the next seven to eight years, Prime Minister Andrej Plenkovic said on Monday.

"We don't want to specify the exact dates, but we want Croatia to become a euro zone member within two government terms in office," Plenkovic told an economic conference devoted to the introduction of the euro in Croatia.

The centre-right government came to power a year ago.

Plenkovic said Croatia wanted to enter the European exchange rate mechanism II (ERM-2) within the next three years, before the country takes the presidency of the European Union in 2020.

EU members that have not yet adopted the euro are expected to participate for at least two years in ERM II, a mechanism aimed to ensure currency stability before joining the euro zone.

The Croatian central bank already keeps Croatia's kuna currency in a narrow fluctuation band, roughly at between 7.3 and 7.7 to the euro, occasionally intervening on the local foreign exchange market mostly to ease appreciation pressures.

Croatia's major challenge before adopting the euro is expected to be the reduction of public debt which is slightly above 80 percent of gross domestic product.

"Our goal is to reduce the public debt to 72 percent of GDP by 2020 ... We are undertaking a major fiscal consolidation and this year the budget gap will be even lower than last year's 0.9 percent of GDP," Plenkovic said.

(Reporting by Igor Ilic; Editing by Robin Pomeroy)

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