February 1, 2023 - Goran Perkovac, the captain of the Croatia national team that won gold at the 1996 Olympics in Atlanta, is the new coach of the Croatia men's handball team.
Hrvoje Horvat is no longer the coach of the Croatia men's handball team. Immediately after the World Handball Championship, where Croatia took ninth place in the overall standings, the Croatian Handball Federation assessed that result as a failure, but also prolonged the decision on Horvat's fate until the statement of professional coordinator Lino Červar. The decision has been made, and Horvat has been removed from his position. Goran Perkovac will succeed him.
Goran Perkovac was the captain of the Croatia national team that won gold at the 1996 Olympics in Atlanta. The native of Slatina was also the world runner-up at the World Champs in Iceland in 1995, the European bronze medalist in Portugal in 1994, and a double gold medalist from the Mediterranean Games. In addition, Perkovac was the coach of Switzerland, Greece, and Germany for many years.
"After the last meeting of the Croatia men's senior national team at the World Handball Championship in Sweden and Poland and the victory against Bahrain (43:32), i.e., 9th place, the Croatian Handball Federation informs the public that it is not satisfied with the achieved result and considers it a failure. The minimum goal placed in front of the coach and the national team was the quarter-finals.
Since it has not been realized, the Croatian Handball Federation is waiting for the statement of professional coordinator Lino Červar about the status of the coach and the further sequence of events. Namely, the Croatian Handball Federation system is set up so that the coordinator proposes the national team coaches. After that, the decision is adopted or rejected by the Croatian Handball Federation Board of Directors," HRS announced eight days ago.
Horvat was Červar's assistant on the national team and succeeded him as the coach. However, he failed to return Croatia to the top of the world handball, and he will be remembered for the bizarre interview after Croatia's last match at the World Championship in Sweden and Poland.
Recall Horvat stood in front of RTL cameras and started the conversation by creating a heart with his fingers and directing it toward the camera.
"At the moment, I can't wait to see my family, then I will decide on my future," he answered. When asked about a possible resignation, he opened his mouth, pretending to answer whether he had the support of the Croatian Handball Federation. However, he didn't want to say whether that result was a failure. Instead, he said that he made some promises and that those were too intimate answers.
Source: Index.hr
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February 1, 2023 - Why year-round flights to Belgrade could solve Dubrovnik's huge connectivity problem.
The most important event in the Dubrovnik calendar takes part this year, and - don't tell anyone - this is the very best time of year to visit the Pearl of the Adriatic. The Feast of St Blaise, the much-beloved patron saint of Dubrovnik, is an extraordinary event when the UNESCO World Heritage Site, stripped back to its bare stone with most cafes and restaurants closed, comes to life and is packed once more. But not with tourists, but with locals, emerging from the winter hibernation to celebrate this most important of days. If you have never been, I rate it as one of the top 10 experiences of my 20 years in Croatia - you can read more in Dubrovnik Full of Life as St Blaise Celebrated in Style.
Want to come and enjoy the festivities, or chill in Dubrovnik in the off-season? Good luck, unless you live in Zagreb.
After a week working in Montenegro last week, I got to see the realities of tourism and connectivity in January.
It was a little sobering when I saw the Dubrovnik timetable, a European tourism champion and iconic city which could - and should - be a 12-month destination.
Above is the timetable for the next few days, including those magical St. Blaise festivities. Apart from one flight to London, Zagreb is petty much the only choice.
And even those flights to Zagreb are crazy expensive - despite the fact that they are subsidised with the PSO (Public Service Obligation) scheme.
Here are your one-way options from Dubrovnik to Zagreb a week from now, for example.
I have spent the last week on Lustica, the lovely and almost totally unspoiled peninsula south of Tivat in Montenegro. I flew in and out of Dubrovnik, and I was struck by how poorly serviced Dubrovnik is in the winter, and how the rise of Tivat from nothing has made it arguably a more interesting destination in winter - certainly livelier - than the Pearl of the Adriatic itself. Here is what I wrote:
Croatian tourism tragedies in road signs and airport departures. 25 years ago, Tivat was a coastal backwater on the Montenegrin coast. Today, even though it is 3 times smaller than a nearer town to Dubrovnik (Herceg Novi), it has its very own sign as you leave Dubrovnik Airport. Porto Montenegro was supposed to have been built in Croatia, but someone got greedy and Tivat became its home. Today, there are 3 luxury resorts with investment totalling 2.5 billion euro in the Boka region of Montenegro, with many other large developments. By contrast, the largest hotel investment on the Croatian coast in today's money is Haludovo on Krk, a joint venture between Tito and Penthouse in 1971 (and now a ruin for over 30 years) at a paltry 250 million. Not only is the luxury tourism going across the southern border, but so are the locals for entertainment in winter. And flights. Tivat Airport connects to the world 12 months a year, while Dubrovnik is serviced by almost exclusively domestic routes this winter (see timetable in photo). On the positive side in the Kingdom of Accidental Tourism, the sun is shining, and soon the tourists will just come.
Tivat's daily schedule - windows to Belgrade and Istanbul, which are both outstanding destinations in their own right but are also windows to the world with the global network of Turkish Airlines and the rapidly expanding network of Air Serbia. Tivat to the world in 100 different combinations, four times a day. And the world to Boka Bay.
And the prices aren't bad compared to those singles with Croatia Airlines (flights February 8-13 - a return not single):
I asked legendary tourism consultant, Mario Seric, for his opinion. The first sentence shows the benefits of being connected to Belgrade, as well as Zagreb, whose connectivity pales by comparison.
Air Serbia will be offering direct flights to 93 cities /destinations worldwide, of which 62 are direct, scheduled, and year-round, 16 direct scheduled seasonal, and 15 direct charter seasonal!
This is impressive compared to the poor connections being offered by Croatia Airlines from Zagreb with direct flights to only 21 destinations (16 year-round and 5 seasonal).
So these connections with Belgrade can also be great to access other destinations as well, especially those that are far away because Belgrade has direct flights to New York, and as of this year also to Chicago and Tianjin...
Air Serbia is currently also considering the introduction of direct flights to Toronto, Miami, Bangkok, and Beijing.
And the good thing in this is that all these flights can be operated by smaller airlines that do not consume a lot of fuel. Turboprop airlines are perfect for intraregional connectivity, and you have a lot of great examples in Europe for this.
Thanks, Mario. And to connect all that network to one of Europe's top destinations, so that tourists could enjoy it out of season, as well as allowing locals to travel with ease, would it really be so hard to connect Belgrade to Dubrovnik 12 months a year? After all, if it is clearly working for tiny Tivat next door, surely it would work for a tourism giant like Dubrovnik. Worth the small investment to try?
Of course, I can understand that there might be some objections in certain quarters given recent history of the connection between Belgrade and Dubrovnik, but the Croatian tourism chiefs decided to move on from the recent past in 2011 by being the main tourism sponsor at the regionally significant Belgrade Tourism Fair back in 2011.
Dubrovnik to the world, 12 months a year. It could - and should - be closer and more realisable than one might think.
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What is it like to live in Croatia? An expat for 20 years, you can follow my series, 20 Ways Croatia Changed Me in 20 Years, starting at the beginning - Business and Dalmatia.
Follow Paul Bradbury on LinkedIn.
Subscribe to the Paul Bradbury Croatia & Balkan Expert YouTube channel.
Croatia, a Survival Kit for Foreigners is now available on Amazon in paperback and on Kindle.
February 1, 2023 - The Slavonija-Žito Athletic Club Osijek has been organizing the International Indoor Athletics Meeting "Josip Gasparac Memorial", contributing to the Osijek events and sports scene for the last six years. The event is coming back in February.
As SiB writes, this year, the competition itself and its category are taking on a completely different, greater significance for the sport, the competitors, but also for the city of Osijek itself.
World Athletics has awarded the traditional indoor athletics meeting "Memorial Josip Gašparac" the prestigious title of World Athletics Indoor Tour Bronze, which places this competition among the largest world and European athletics meetings.
With the new title, the athletics competition will gather about 20 of the world's best pole vaulters in Osijek, among them Piotr Lisek, winner of silver and bronze from the World Athletics Championship, gold from the European Championship, three-time winner of the Diamond League, whose personal pole vault record is over 6.00m.
The results that the athletes achieve at this competition in Osijek will count in the norm for the Olympic Games and the World and European Athletics Championships.
The live streaming of the competition has been officially confirmed by the European Athletics Federation with a commentator in English. All members of the World and European Athletics Federations will be able to follow the live stream. The leaders of the national athletics federations as well as the managers of top athletes have also confirmed their attendance.
Over the course of two days on February 21 and 22 2023, Osijek will become the centre of world and European athletics in the athletics tunnel of the Gradski Vrt Hall in Osijek. In addition to top athletes, a large number of visitors and spectators from all over Europe are expected.
On February 21 (Tuesday), men and women in the B and C categories will have the opportunity to perform, while on February 22, competitors in the elite category will take the stage. A new website of the Meeting was launched, where you can find out all the information about the event itself, as well as about the top jumpers who are coming to perform in Osijek.
It is important to note that entry is free for all spectators.
For more, make sure to check out our dedicated Sport section.
February 1, 2023 - Did you know that a number of Dalmatians of a certain age were born in the Sinai Desert in Egypt? The curious story of Dalmatians in El Shatt.
It is one of the strangest - and most fascinating - tales of my time in Dalmatia. A number of people on Hvar who were born in the desert in Egypt.
And not just Hvar, but from the wider Dalmatian region. The unreal story of El Shatt in the Sinai desert.
Learn more in the latest episode from the Paul Bradbury Croatia Expert channel.
As one of the few people to write about El Shatt in English over the years, I have had some rather unusual and fascinating correspondence on the subject. This included an email from the son of a British soldier and Yugoslav woman who had found love in the desert. the only one that I can find now is this rather fascinating article from the grandson of a British soldier, with some rather cool correspondence dating back 80 years. Read more in El Shatt: British Soldier Grandson Looking for George Makiedo Descendents.
With thanks (and watch for the full story) to the Croatian State Archives for this amazing documentary, below.
Were you in El Shatt or have relatives who were there or were born there? It could make for an interesting mini-series on TCN, so if you have an interesting story to tell from this unusual period in Croatian history, please contact This email address is being protected from spambots. You need JavaScript enabled to view it. Subject El Shatt.
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What is it like to live in Croatia? An expat for 20 years, you can follow my series, 20 Ways Croatia Changed Me in 20 Years, starting at the beginning - Business and Dalmatia.
Follow Paul Bradbury on LinkedIn.
Subscribe to the Paul Bradbury Croatia & Balkan Expert YouTube channel.
Croatia, a Survival Kit for Foreigners is now available on Amazon in paperback and on Kindle.
February the 1st, 2023 - When it comes to Croatian international schools and kindergartens, the offer is fairly varied, but it is also extremely geographically limited...
Despite the fact that mandatory education begins a little bit later in Croatia than it does in some Western European countries, this country puts a lot of emphasis on education, and I for one was surprised to learn just how much children have to do in terms of homework and studying at an age where I was just playing out in the street with my friends and falling off my bike (a lot).
A (very) quick history
There are 940 primary schools, 390 secondary schools, and 90 public and 32 private education institutions across Croatia, with international students choosing this country more and more frequently. The very first university in Croatia, the University of Zadar, was founded way back in 1396, while the largest university in the country is the University of Zagreb, founded in 1669.
How it works
Education in Croatia begins with kindergarten (pre-school if you’re British), and then the beginning of the compulsory eight years of primary school education starts at the age of six or seven depending on when the child’s birthday falls. After finishing their primary education, kids can continue learning based on the grades they earned in four-year non-compulsory secondary schools that are divided into gymnasiums, vocational (industrial, trade, and technical) and art (art, dance, and music) schools.
Enrollment in higher education institutions in Croatia has been determined by grades obtained during high school exit exams since back in 2010, with the study programmes being aligned with the Bologna Process since 2005. Croatian higher education institutions are divided up into colleges, faculties, academies of art and polytechnics and they offer both university and professional studies. While students (or should I say their parents) need to pay for their supplies, public primary and secondary schools, as well as institutions of higher education, are free. Scholarships are also regularly given out by the state in the case of higher education institutions.
I'm a foreigner and my kids don't understand the language, is a Croatian international school up my alley?
Many foreigners who move to Croatia have very valid concerns about their children who don’t speak the language. There are multiple Croatian international schools which cater to all age groups with their various programmes, some of which are internationally (as the name suggests) recognised. There is also usually extra help on offer for foreign children attending Croatian public schools to get their language skills up to par.
To start off with, it’s important to state that Croatia has both public and private schools on offer, and that in public schools, lessons are taught solely in Croatian. International schools teach in English, Spanish, German, French and numerous other languages. This might be a much better choice if you have children who need to continue their education in their native languages, with Croatian also being drip fed in.
If you’re planning on moving to a more rural area and you have school-age children, you will have a tough time on your hands. Zagreb and Split, Croatia largest and second largest cities, have several international schools respectively. Most of the schools and kindergartens listed below also have some lessons or at least some instructions given in Croatian as well as the primary language used in teaching.
Croatian international schools and kindergartens - Zagreb
Zagreb is home to many internationally recognised and respected international schools and kindergartens, and being the capital, it is home to the highest number of them in the country.
The Mala kuća International Kindergarten (Little House)
Obzori Kindergarten (Horizons)
The Learning Tree International Kindergarten
Dječji vrtić zvjezdica (The Little Star Kindergarten)
The British International School of Zagreb
The American International School of Zagreb
The Bright Horizons British International School of Zagreb
Ecole Française Internationale de Zagreb
The Matija Gubec International School
Deutsche Internationale Schule Zagreb
The International Baccalaureate at MIOC
Croatian international schools and kindergartens - Split
Split, Dalmatia’s largest city and the country’s second largest city, also has a few international schools and kindergartens to boast of, although there are considerably less to speak of than in Zagreb.
Harfa International School
Split International School
Fun2Learn
Bravo!
All in all, public education in Croatia does very well considering the level of funding it gets, and when it comes to private and international schools, the reviews speak for themselves. They are the best choice for expat families, with the only downside being that they are very much located in the two largest cities. ESL schools, however, are spread across the country, from all the way down south in Dubrovnik to up in Koprivnica.
For more tips and tricks related to moving to and living in Croatia, from information on driving and jumping on a ferry to renting a property to finding a job, make sure to keep up with our dedicated lifestyle section. A special How to Croatia article focused on a specific topic is published every Wednesday.
February the 1st, 2023 - Pula apartment prices, much like most other things which are purchasable of late, have shot up by as much as seventy percent in some cases.
As Poslovni Dnevnik writes, s fully furnished apartment in the attic of an Austro-Hungarian building spanning 48.57 square metres in Stoja (Pula) is currently for sale for 135,000 euros. At that price, it means that a single square metre of an apartment in Stoja costs a whopping 2,779 euros. A two-room apartment in the Sijana area spanning 75 square metres in a building built back in 2008 is being sold for 200,000 euros or, if it's easier for people to calculare in the old way - for one and a half million kuna.
There are also Pula apartment prices coming in at 2,666 euros per square metre, and the brand new residential area under development in Marina Veruda offers luxury apartments with a swimming pool, where a one-room apartment on the ground floor spanning 51.41 square metres on a turnkey basis, costs a massive 289,181 euros.
There are even some where the price per square metre will cost a buyer as much as 5,624 euros. A resident of Pula can hardly afford that even if they held a position in any one of the top paying local companies, but the location above Marina Veruda is probably not intended for locals. It's more than likely aimed primarily at foreign buyers who are perhaps more affluent, and who will be able to get from their yacht to their apartment easily, or rent it out while aboard their yacht, writes local portal The Voice of Istria/Glas Istre.
In a way, this is a picture of the Croatian real estate market as it currently stands, which, judging by the prices per square metre, is almost entirely intended for a buyer from Western and Central Europe, but not for a Pula local, who simply doesn't take home that sort of cash each month or year.
"Regardless of the interest rates, Pula apartment prices have jumped so much that our customers can't keep up with them," explained Sergio Ricchiuto, the owner of the Pula-based real estate agency Immobilia Nekretnine/Property, who has been in the business for more than forty years now. He says he doesn't know why square metres in Pula have become so expensive recently.
''The media claims that the prices went up by about 10 to 20 percent, which isn't quite the case because the prices of some properties jumped from 50 to 70 percent, depending on their location. For our locals, especially young people and young married couples who are thinking of buying an apartment, it becomes mission impossible because at these prices they simply can't afford it regardless of the current interest rate, which is a small item compared to the price,'' Ricchiuto concluded.
For more, make sure to check out our dedicated news section.
February the 1st, 2023 - The ongoing conflict going on in Ukraine and its consequences have replaced the global coronavirus pandemic as the main issue for the growth of world trade exchange, and due to geopolitical circumstances, the Croatian ICT industry has some great opportunities before it.
As Darko Bicak/Poslovni Dnevnik writes, the Croatian ICT industry and the country's production of machinery and equipment could do well at the moment, as large companies are looking for opportunities to shorten their supply chains, according to the Boston Consulting Group's (BCG) analysis entitled "Protectionism, pandemic, war and the future of trade".
It was also emphasised that standard trade patterns will change, but not only as a result of the war in Ukraine, but also due to the decreasing reliance of Western countries on trade with China and the rise of economic blocs such as the Association of Southeast Asian Nations (ASEAN), assesses the BCG analysis.
Energy will be the sector that will be most affected by the slowdown in global trade, and it has been estimated that from 2023 to 2031, the European Union (EU) will increase energy imports from the USA by 338 billion dollars, and a huge expansion will also take place in trade with ASEAN countries - Africa, the Middle East and India.
BCG also estimates that trade between the EU and Russia will decline sharply as Western Europe seeks to reduce its dependence on Russian oil and gas. As a result, Russia will try to shift its trade flows from Europe to other regions, especially to China and India. Like the US, the EU has also taken an increasingly cautious stance towards China in general.
The growth of mutual trade is slowing down, to a modest rate of 2.3 percent by the year 2031, and it will amount to 72 billion dollars. Tomislav Corak, a partner within BCG, pointed out that we're currently witnessing a time of tectonic changes in global trade. BCG predicts that trade will recover from the slowdown caused by the coronavirus pandemic and grow at a rate of 2.3 percent per year, but it will no longer be in the form of the trade we've known so well for the past forty years.
Over the next decade or so, global trade will become more regionalised, mostly under the influence of geopolitical forces," believes Corak, adding that Croatia is well positioned to take advantage of these changes.
"Membership of the EU's internal market enables Croatia to trade under the same conditions as the other 26 member states, which already represent more than 70 percent of Croatian foreign trade. It's problematic that the greater part of this exchange falls on the import of lower-value goods and services, which doesn't make Croatia very competitive After the introduction of the euro, the currency risk for Croatia in foreign trade exchange with EU member states finally disappeared, which opens up huge opportunities for attracting direct foreign investments necessary for the transformation of the economy and the development of activities with higher added value.
However, Croatia will have to compete with Slovakia and Slovenia in that regard, which have already been identified by global companies as countries where they can diversify their supply chains. In this way, global companies will continue to reduce their dependence on China, while at the same time building production capacities for the entire EU market," Corak believes.
In this context, according to BCG, Croatia and the Croatian ICT industry has significant opportunities before it when it comes to development in the production of machinery and equipment, because it has knowledge and experience in engineering such technologies. However, this will require significant investments in infrastructure and professional knowledge and skills, as well as smart policies to attract foreign and retain Croatian IT experts.
In their analysis, the consultants estimated that the consequence of the slowdown in trade between Western countries with Russia and China will be an increase in trade between northern and southern regions, as these countries will find even more new trade partners in Africa, South America and Southeast Asia.
The clear winners, according to BCG, are the ASEAN countries, which are likely to see new trade opportunities, especially with China, Japan, the US and the EU as a bloc. According to them, they will increase trade by more than a thousand billion dollars from 2023 to 2031.
For more, make sure to check out our news section.
February the 1st, 2023 - A very welcome fifteen million euros is set to be poured into a Sunce Hotels investment as part of yet another such cycle. As things begin gearing up for the 2023 summer tourist season, it's a move that can't come too soon.
As Jadranka Dozan/Poslovni Dnevnik writes, Sunce Hotels (Hoteli) has taken yet another step towards the continuation of its investment cycle. At an assembly held recently, the proposal on recapitalisation was confirmed.
Along with the recalculation and adjustment of the share capital as part of the conversion to the euro (by reducing the nominal value of the share from 13.27 euros to 13 euros), the proposal to increase the share capital by slightly less than nine (8.86) million euros, from 92.88 million euros to 101.75 million euros was accepted.
This new increase will be implemented through the issue of new shares, which will be subscribed by the majority owner, the Arab Eagle Hills Real Estate, through its company in the City of Zagreb. Since the registration of new shares is planned at 22 euros per share, which is significantly above the "nominal value", 15 million euros of fresh capital will flow into the company through recapitalisation.
After about 45 million euros were invested last year, this will ensure financing for this year's planned investments. Sunce Hotels investments are already taking on a very firm shape, as the company has already announced the renovation of Hotel Afrodita in Tucepi on the mainland and of Hotel Bonaca in Bol on the island of Brac.
In addition to the above, there are also plans for several smaller operations within the new Sunce Hotels investment cycle to improve the overall offer and raise the quality of services provided in their other facilities. So far, it is not known whether Eagle Hills will also take over the state's stake in Brac Airport.
For more, make sure to check out our dedicated news section.
January 31, 2023 - And suddenly it is summer again, and time for sailing in Croatia. A spectacular video from the air by local specialists 45 Degrees Sailing. Meet the Croatia they love - wow!
One of the things I love about Croatia is that its sheer diversity attracts so many different people with different passions, who then become experts and artists in their niche.
I am not a sailor, but I seriously could be tempted by the incredible work of Nick Hathaway of 45 Degrees Sailing (and I am talking just about his videography, the feedback from his sailing tours is nothing less than outstanding).
So pull up a chair, pour yourself a glass of wine and dream of summer on the water in Croatia. What a gorgeous video and promotion of Croatia! Full details about the video below.
CROATIA IN 4K Video UHD - Relaxing Music with Sailing and Coastal Islands.
Flying Over Croatia in 4K with 45 Degrees Sailing See islands Šolta, Hvar, Badija, Brač, Vis, Bisevo, Zečevo Towns of Komiža, Vis and Stari Grad
Adriatic Sea and Dalmatian Islands Dobrodošli u Hrvatsku. Welcome to Croatia.
We bring to you Croatia in 4K video UHD. Set to relaxing music, fly over Croatia like a bird and see the islands Šolta, Hvar, Brač, Badija, Vis, Biševo, Zečevo. Peek from up high at famous attractions like the Blue Cave (or Modra Špilja as it’s known locally) and the Monk Seal Cave. Get a panoramic experience of the quaint coastal towns of Komiža, Vis, and Stari Grad. Enjoy this rich aerial perspective of the Adriatic Sea and Dalmatian Islands.
This is the Croatia that we love. And we want to share Croatia with you in 4K. Get lost in the relaxing music of the back track and transport yourself into our 4K video footage.
Filmed with Drones:
DJI MAVIC2 Pro (Buy DJI Mavic 3: https://click.dji.com/AAJ7626Gsf6pm2d...)
DJI Mini2 - Courtesy of AdriaticHero (Buy DJI Mini 2: https://click.dji.com/ACOwHfz4jG1xsRl... )
Filmed and Edited by Mahina Hathaway and Nick Hathaway, 45 Degrees Sailing Drone:
DJI Mavic 3: https://click.dji.com/AAJ7626Gsf6pm2d...
Come sailing with 45 Degrees Sailing! Check us out at: http://www.45degreessailing.com/
January 31, 2023 - Taxation is always a hot topic in the Croatian economy. Professor PhD Fernando Pinto Hernández from Rey Juan Carlos University in Madrid with some thoughts on special taxation on energy and tobacco, in an interview in today's Jutarnji List, which is translated below in full.
Decrease of taxation is important to stimulate economic growth. Equally important is the level of taxes and the tax burden, as well as the design of the tax system itself. In the field of special taxes, it is important to design a tax system that differentiates products according to their characteristics and harm to individuals, society and the environment. Such an approach is important because of the long-term social and economic effects, stated prof. PhD Fernando Pinto Hernández from Rey Juan Carlos University in Madrid, referring to special taxes on energy and tobacco.
The problem with inflation, which partly stems from the rise in energy prices, must be accompanied by public policy decisions containing some taxes (progressive ones), such as personal income tax, and lowering others (regressive ones), such as VAT on some commodities or special taxes on consumption.
I hope that these tax policy measures, which significantly increase the tax burden on companies in certain productive sectors, are temporary. In other words, they should not be prolonged for too long, as they will lead to significant efficiency losses in the Croatian economy, which is already experiencing difficulties due to both rising inflation and its recent entry into the euro area. In the case of Spain, very similar measures are being implemented and therefore the results could be the same if the fiscal policies are not very temporary.
It seems logical to tax those products that generate a negative externality of consumption, i.e. that cause damage to the health of others that is not reflected in market prices. However, we need to take into account the real health risk they pose in order not to over-regulate them and impose extraordinarily high taxes. In even simple terms: yes to taxing them, but the level of taxation needs to be correlated to the risk (and damage) these products produce.
What they have shown is that, by setting excise taxes according to the health risk posed by these products, efficient tax policy outcomes are achieved. It could be summarized as a tax policy whose slogan is that “the lower the risk, the lower the taxes”. From my point of view, these countries are an example of success in terms of taxation design.
When taxes and public policies lack a technically based design, the desired outcome often turns out to be the opposite. In the case of France, this is exactly what has happened: in an attempt to reduce the prevalence of tobacco by raising prices, the population has opted for substitute goods of poorer quality and greater danger (e.g. illicit tobacco).
Economic theory indicates that for a tax to have a positive effect on economic growth it must fulfil several premises. The first of these is to have a good technical design. The second is that it should aim to replace the efficiency loss caused by its introduction. And finally, the tax must entail the least possible loss of purchasing power for the taxpayer, as this is the only way for the taxpayer to feel free to consume, save or invest his or her money.
It is very difficult to fight tax fraud. However, over the last ten years, the European Union and individual countries have implemented their anti-fraud policies very significantly. I would like to think that the battle can be won, but in order to do so, the tax burden and the tax effort of taxpayers must be reduced as much as possible while guaranteeing quality basic public services. This is particularly true when we think about the inefficiencies in re-distribution.
This article appeared originally in Croatian in Jutarnji List - you can read the original here.