One of the recommendations is gradual depreciation of kuna against euro.
Croatian President Kolinda Grabar-Kitarović presented on Wednesday recommendations of her Council for Economic Affairs for the long-term economic development of Croatia. She said that she was encouraged by the first moves by the new government, which are in line with long-term and sustainable development of a competitive economy, reports Nacional on February 1, 2017.
“Prime Minister Plenković’s government knows about our recommendations through our regular and successful cooperation and communication,” said the President after the meeting which was attended by several ministers. “The aim of today's public presentation of recommendations is to encourage constructive public debate about topics that are important to our common future. I think that, instead of superficial and historical topics which do not contribute to our better future, we need to encourage debate about these issues that deserve special attention,” said the President, adding that government’s first steps demonstrated its focus on achieving general progress.
“We have seen specific measures to relieve the burden on businesses and make Croatia more competitive. You will see from the recommendations that some of them have already been implemented through activities of the government, such as tax reform or removal of some administrative barriers. These are measures that will have a direct impact on employment, the development of small and medium sized enterprises and high-quality greenfield and brownfield investments,” she said.
She expressed her support for the continued implementation of a comprehensive curriculum reform, with a focus on the so-called STEM area, and emphasized the need to link education with the labour market needs. “Croatia has absolutely all the prerequisites to be a rich and successful country and it is up to us to use these resources,” said Grabar-Kitarović.
The Council recommended redefining the fundamental goals of the Croatian National Bank from maintaining price stability towards achieving full employment and sustainable economic growth. It supports the strengthening of the role of the kuna, which should be allowed to moderately depreciate against the euro by 2 percent annually through five years. It also recommends entry into the eurozone.
The recommendations also include elimination of administrative and bureaucratic barriers, reducing excessive regulation of the Croatian economy, regulation of land registry and cadastre, as well as more efficient management of state-owned enterprises and state property. In the area of tax policy, Council proposes lower taxation of labour, and redefinition of products and services which are taxed at preferential VAT rates in order to boost agricultural and industrial production and tourism.
A separate set of recommendations relates to helping exporters in achieving sustainable growth of competitive exports, through incentives for innovations, patents, research and development, as well as the recapitalization of the Croatian Bank for Reconstruction and Development. In order to better attract foreign direct investments, the Council recommends significant strengthening of the capacities of the Agency for Investments and Competitiveness.
Asked about problems that some foreign investors have in Croatia, for example, investors in the project of golf on Srđ near Dubrovnik and the Four Seasons hotel group, the President said that she was aware of the extent of the problem. “I do not understand why some of these projects take so long. The company such as Four Seasons must not run into such problems in Croatia,” she said. “It has a lot to do with the lack of political will. And the other problem is that we always have people who do not deserve to work in the public administration and who have prejudices against investors,” she said.
