In First Half of 2020, Coronavirus "Took" 66000 Jobs in Croatia
The ongoing coronavirus pandemic has delivered a heavy blow to the Croatian economy, which relies an enormous amount on tourism, and the virus has taken a concerning amount of jobs across the country.
As Poslovni Dnevnik/Jadranka Dozan writes on the 14th of August, 2020, according to the Croatian Employment Service's records on the number of unemployed people recorded in the first two weeks of August, their number decreased by five hundred when compared to the end of July. Yesterday, there were 150,959 people registered as jobseekers, and last month ended with 151,433 registered unemployed persons. When compared to June, the number of registered unemployed increased by 782 persons in July, while compared to July last year, it increased by more than 37,000.
In parallel with the monthly increase in the number of unemployed people, however, employment measured by the number of insured persons at the Croatian Pension Insurance Institute also increased in July. When compared to the month before, there were 0.8 percent or 12.7 thousand more people, reaching a total of 1.55 million people. This was the third consecutive month of growth in the number of insured persons in Croatia, although the negative trend that began in April unfortunately continued in the year-on-year comparisons.
For months now, the real momentum of the negative consequences of the coronavirus pandemic on the Croatian labour market has been announced with apprehension, because, in addition to seasonal shock absorbers, most government subsidies will be fully expressed in the sense of needing to subsidise employee salaries. During July alone (for the payment of salaries for the month of June) these subsidies covered significantly fewer workers than they did back during the first wave; a total of 67,040 workers were paid, all of whom were working for a total of 16,200 employers, while a total of 577,000 workers were paid for the month of April.
Up to 300,000 unemployed people in Croatia as a result of the coronavirus pandemic?
How many jobs will prove vulnerable in a few months, under these conditions of considerable uncertainty about the development of the coronavirus crisis, can only be guessed through rough estimates. Drazen Orescanin, an entrepreneur who has recently been primarily exposed through his role of executive director of the Voice of Entrepreneurs (Glas Poduzetnika) Association, recently stated that with the end of the tourist season and the arrival of autumn and winter on its way, we can realistically expect "some 250 to 300 thousand unemployed people at the Croatian Employment Service". Anything beyond that, according to the aforementioned association, "would mean a very big crisis indeed."
In the analysis published over recent days, Hanfa estimated the consequences of the coronavirus crisis on the labour market at around 66,000 lost jobs across Croatia in the first half of the year. The number of unemployed people in the first six months was a little less, more specifically 19 thousand less, but the analysis states that in recent years, at that time of year, the number of unemployed decreased by an average of 48 thousand, so the effect should be attributed to this variable.
According to Hanfa's analysts, the rise in unemployment will hit the younger population the hardest, as the higher share of permanent contracts is among them, and seasonal workers, especially those working in the provision of services and in the tourism sector.
"In terms of the share of the total aid for job preservation, the processing industry and the trade sector are significantly endangered, as they rely heavily on cross-border trade, which has decreased,'' they emphasised. In most of the current economic forecasts, the unemployment rate in Croatia, after falling to seven percent last year, could rise to ten percent again this year. The speed and intensity of the return to lower single-digit rates will depend to a large extent on the availability of European economic recovery assistance programmes.
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Zagreb Company's E-Tricycle Can Clean Streets and be Tourist Rickshaw
As Sergej Novosel Vuckovic/Poslovni Dnevnik writes on the 14th of August, 2020, the Zagreb company Viking deals with heating systems, primarily radiators, in the field of which it has gained numerous references, and its activities include plastic coating, locksmithing and digital printing, as well as 2 and 3D modelling. However, in addition to construction and production, director Robert Vlasic is making sure not to neglect the development and research aspect, most present through the Gy3o project.
This Zagreb company's partners are the Faculty of Mechanical Engineering and Naval Architecture (FSB) in Zagreb and the Faculty of Electrical Engineering and Computing (FER). A few years ago, Gy3o received 2.1 million kuna from the EU Regional Development Fund (the company invested its own 1.1 million), a prototype was made, and this year, a further 2,405,805 kuna in non-refundable funds arrived.
Vlasic, satisfied with the funds provided, stated that this is only on paper because it is necessary to invest, ie co-finance the implementation to the full value of the project of 5,822,379.08 kuna, so that it can be successfully implemented. That is why, he noted, he is grateful for the media support that helps him to reach investors.
In the meantime, this Zagreb company's director isn't giving up and is bravely approaching the development of new projects continuing in the direction of electromobility. He also designed an electric tricycle. Unlike the Gy3o which would function as a personal vehicle for private use, Viking’s new R&D project is for urban, commercial purposes.
''There was a need for a cargo bike, ie, a tricycle that could overcome ascents around the city and in hilly areas. The electric motor tricycle is an ideal compromise when it comes to ecology,'' Vlasic explained when discussing how he initially came up with the idea. They have a prototype, test engines and batteries and the suspension with shock absorbers, steering and hydraulic brakes, the prototype can even be used to transport waste. He confirmed that they are working on the first major series of vehicles for Zagreb Holding, for the needs of Cistoca Zagreb. The purchase order is 30 vehicles.
“It’s perfect for transporting smaller loads around the city through crowds in a short amount of time. It can serve as a means of promotion or as a delivery vehicle. For example, as a rickshaw for tourism, a postal delivery vehicle, a vehicle for ice cream, popcorn and the like. Its speed is powered by a strong electric motor and the freedom of constant movement within 6 hours,'' added Vlasic. The special features of the Zagreb company's e-tricycle are that it is narrow, less than a metre in width, that it doesn't require any permits, and is not subject to a ban on entering the city centre as a delivery vehicle, nor is it banned in tourist centres during certain periods.
“Delivery with this vehicle can be done through all zones and at all times, because tricycles with an electric motor don't belong to the category of delivery vehicles that have bans placed on them. In addition, these vehicles can be adapted to the transport of europallets and cargo weighing up to 500 kilograms,'' explained Vlasic.
In light of the growing need for ecological and sustainable, "green" transport, as well as the need for safe hygienic standards, Vlasic pointed out that the e-tricycle-cleaner is "anticovid" and doesn't pollute the environment.
"There's room for the commercialisation of tricycles and cargo bicycles, especially with the new EU initiatives for ecological transport,'' concluded Robert Vlasic, the director of the Zagreb company Viking.
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August Looking Good, But Crisis Will Interrupt Jadran's Investment Cycle
As Poslovni Dnevnik/Suzana Varosanec writes on the 14th of August, 2020, in the first seven months of 2020, the hotel company Jadran from Crikvenica reached 53 percent of last year's turnover in the same period. Given the current state of booking, and in the event that there are no major "shocks", Jadran's management expects that the company's annual realisation will amount to more than 60 percent of last year's turnover.
This is obviously the result of Jadran's investment cycle, although the President of the Adriatic Management Board Goran Fabris notes that it must not be forgotten that this is a very difficult tourist season, which in other words means that the overall results will be significantly worse than expected at the beginning of the year. According to Fabris, this will inevitably lead to a slowdown in the investment cycle.
However, in spite of the unfavourable tourist season accompanied by the enforced epidemiological measures, with intensive preparations and completed investments, the company did very well in July. This privatised company, majority owned by the pension funds PBZ CO and Erste Plavi, has been waking up more and more over the last three years due to an investment cycle, meaning that all renovated accommodation facilities - especially those with three or four stars - have better results than last year. Such an example is the Esplanade Hotel (39 rooms) in Crikvenica, which is an investment from back in 2017, before the company's privatisation and its new investment cycle.
This year is also the first in which investments made since Jadran was privatised are starting to return, and the data on the share of Croatian guests is very interesting, as it showed that they are more significant than initially expected, not only in Crikvenica, but also in Baska. When it comes to the structure of guests, Jadran says that along with Croats, the most numerous guests are Austrians, Germans, Slovenes, Czechs and Hungarians, but the share of Slovenes and Croats is 15 percent higher than it was during previous years.
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Newlight: Street Lights Updated in 75 Croatian Cities and Municipalities
As Novac/Lidija Kiseljak/zupan.hr writes on the 14th of August, 2020, the NEWLIGHT project is the first project in the Republic of Croatia ever co-financed from the ELENA programme, a joint technical assistance programme of the European Commission and the European Investment Bank. The ELENA programme is intended for the preparation of major infrastructure projects across European regions and cities in the field of clean energy, transport and buildings.
NEWLIGHT was developed by the Regional Energy Agency of Northwest Croatia (REGEA) for two Croatian counties - the Krapina-Zagorje and Zagreb counties with the aim of innovative financing and launching a larger range of investments in the field of public lighting. The value of the implemented investments is around 100 million kuna, and the project also generated energy savings of around 60 percent when compared to the current situation, meaning around 20 GWh, and a reduction in carbon dioxide emissions by 5,200 tonnes per year.
This project is the candidate of choice for the best European Union project, and is part of the ''Contribution to the local and regional community'' category.
Through the NEWLIGHT project, investments have been launched in the reconstruction of public lighting in as many as 57 Croatian cities and municipalities, which is a unique case in Croatia and a widely recognised result throughout the European Union. It deals primarily with the modernisation of over 35,000 old street lights, which achieves financial savings of more than ten million kuna per year.
The project posed a huge challenge because it was supposed to unite multiple Croatian cities and municipalities up and down the country around one idea and vision - energy efficient public lighting to raise the quality of life of citizens.
The implementation of the project began back in 2017 with the application for technical assistance funds. In preparation for the project, more than 72,000 lighting fixtures were inspected, and the GIS database, which was developed for the project and which cities and municipalities continue to use, contains an enormous amount of data on public lighting in their respective areas. As part of the REGEA project, the team has developed its own methodology for energy audits, which is slowly becoming a new national standard, and an innovative model called "Design and Build" has been developed, on which reconstruction contracts are based.
In this way, two important phases of the project are connected - both the design and the reconstruction of the lighting, which significantly reduces the risks for the contracting authority.
The crown of the NEWLIGHT project is a new and unique Energy Performance Contract drawn up in accordance with Eurostat guidelines which is not considered to mark an increase in public debt for cities and municipalities.
The ESCO contract which was developed by REGEA as part of the project contains more than 60 pages, with all of the necessary attachments and the legal documentation signed by the contracting authority for the reconstruction of public lighting.
The contract that REGEA drew up for this occasion is more detailed than anything seen on the Croatian market so far. In first place is the protection of public money with the implementation of infrastructure projects that should increase the quality of life of citizens.
''This is an exceptional project, so far, no one in the Republic of Croatia has used the funds of the ELENA programme, the EU technical assistance programme for regions and large cities. We've shown that the knowledge of Croatian experts can be equally valuable to the best in Europe. Our two counties have played the role of linking investments in a larger area, regardless of administrative boundaries. This is certainly an indicator of how it can be done in Croatia. Regardless of the realised investments in cities and larger municipalities, the benefits of the project are very visible for small municipalities as well,'' says Zagreb County Prefect Stjepan Kozic.
“The NEWLIGHT project was presented back in October 2016 in Brussels, Belgium, in the Committee of the Regions of the European Union in front of about 250 participants and was recognised as an example of project aggregation and good practice not only in Croatia but also at the European Union level.
Few projects can successfully bring together so many cities and municipalities, so many different people with different lists of priorities, and yet set one clear goal for all - improving public lighting.
At the level of Krapina-Zagorje County, 28 local self-government units were included in this project with a capital value of the project of reconstruction and modernisation of public lighting standing at about 2 million euros. Such an intervention wouldn't be possible from the budget of local self-government units alone, and the ELENA programme has made this possible. The reconstruction of 8000 street lights not only means better, and therefore safer lighting for pedestrians and drivers, it will also achieve potential energy and cost savings of 60 percent at the level of Krapina-Zagorje County and reduce the amount of CO2 emissions by 700 tonnes per year. The equivalent of those savings can be expressed by the consumption of about 1000 average households in Croatia,'' says Krapina-Zagorje County Prefect Zeljko Kolar.
How successful the project is can be shown by the fact that in February 2019, it received the prestigious European Energy Services Award (EESA) in Brussels.
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Minister: Situation Is Not the Same in All Regions in Croatia
ZAGREB, Aug 14, 2020 - Interior Minister Davor Bozinovic said about the warnings from abroad concerning a resurgence of COVID cases that efforts were being made to point out the particularity of epidemiological situations in different regions of Croatia.
The situation is not the same in counties where more than half of today's new cases were registered or in some others, he underscored.
In counties where there are mostly Austrian and Slovenian tourists, the epidemiological situation is good, Bozinovic told a press conference of the national COVID crisis management team.
He said they were communicating this to authorities in Vienna and Ljubljana.
10 counties with the incidence of fewer than 10 cases per 100,000 people in 14 days
Croatian Public Health Institute head Krunoslav Capak said that in 14 days 10 counties had an incidence of fewer than 10 cases per 100,000 people, which is by Slovenian criteria a green zone. These are Bjelovar-Bilogora County, Istria County, Koprivnica-Krizevci County, Krapina-Zagorje County, Medjimurje County, Pozega-Slavonija County, Primorje-Gorski Kotar County, Sisak-Moslavina County, Varazdin County and Virovitica-Podravina County.
Vukovar and Split Counties with more than 40 cases per 100,000 people in 14 days
Two counties are in the red zone, with more than 40 cases in 14 days, and they are Vukovar-Srijem and Split-Dalmatia County.
Other countries are in the so-called orange zone, between 10 and 40, which Capak underscored as a good and favourable situation.
As for comparisons with other EU countries, he said that of the 27 countries we were not at the top or at the bottom, but in the middle, as the 13th country by incidence. The Netherlands, which has introduced measures for us, is below us, as one of the countries with a worse situation.
Commenting on the fact that the number of infected foreigners does not match data from abroad, Capak said that they had data they received officially and that since June there had been 54 persons for whom we had received a notification through the EWRS system that they had become infected in Croatia.
"We communicate with everyone, whoever officially sends us a report, we respond to it and conduct an investigation," Capak said.
Istria Urges Croatian Government to Respond to Italy's Decision on COVID Testing
ZAGREB, Aug 14, 2020 - Istria County and Istrian cities called on the Croatian government on Friday to immediately send a request to the Italian government to carry out the obligation to test all arrivals from Croatia selectively, in accordance with the real epidemiological situation in different parts of Croatia.
They called for the same request to also be sent to the Slovenian government, which had announced that entire Croatia could be put on the red list of epidemiologically unsafe countries.
"We are sure that you yourself understand that such a unilateral move by Italy, as well as announcements from Slovenia, are seriously jeopardising the tourist season, especially at a time when tourist arrivals are most numerous and a large proportion of guests are from Italy and Slovenia themselves," representatives of Istria county and cities said.
They underscored that Istria was keeping the health situation under control, just as it had been in the previous months, and that it had great results in tourism and the biggest portion of Croatia's overall tourism turnover, as a result of great effort and responsibility of all Istrians.
"Our county is safe health-wise and successful in tourism - we call on you to enable it to stay that way," Istrian officials said, noting that the state budget, which had already suffered a massive blow because of the crisis caused by the coronavirus, also depends on the results of the tourist season.
They, therefore, request that at the moment when Dalmatia's epidemiological situation has significantly worse, it should be made possible for Istria, as a safe destination, to save Croatia's this year's tourism results.
A prompt reaction by the government, the Foreign and European Affairs Ministry and the Tourism Ministry to Italy's decision and Slovenia's announcement has also been requested by the Istrian Democratic Party (IDS).
"Italy's decisions has far-reaching negative consequences for the Croatian economy and requires maximum engagement of all relevant institutions. Croatia must use all available diplomatic channels, extremely well-developed bilateral relations with Italy and diplomatic channels at the EU level to revise Italy's decision," IDS said.
Hospitality Sector: New Decisions Unjust to Those Adhering to Measures
ZAGREB, Aug 14, 2020 - The national association of hospitality providers on Friday called for compliance with the latest measures and recommendations by the Civil Protection Authority related to bars, but considers that they are unfair to those who have adhered to the measures all the time.
The national COVID response team on Thursday adopted a decision whereby hospitality venues described as 'bars', which refers to night clubs, night bars, disco-bars, cafe bars and the like, will not be allowed to be open after midnight. The measure will remain in force as of today and for the next ten days.
Ahead of the coming public holiday weekend, the association of hospitality providers called on everyone in the hospitality sector to, as always until now, comply with all the measures and recommendations by epidemiological services and the civil protection authority.
However, coming to terms with the epidemiological reality, the association warns that that decision was adopted without considering the specific features of hospitality and the broad definition of the variety of enterprises that are considered to be bars.
"It is unfair that hospitality venues that have until now operated in accordance with all the recommended measures, and entire regions without a rise in new cases of the infection such as Istria and the Kvarner archipelago, to be penalised due to the negligence of some individual clubs. We object to limiting working hours, seeing that bars encompass too broad a number of hospitality venues, from peaceful cafe bars on the beach in Istria to the biggest clubs in the Adriatic. Our proposal is that each club and other venues identified as hotspots (of the infection) to be immediately closed temporarily for 14 days and that their employees be tested," Marin Medak said on behalf of the association.
The association called for more frequent inspections and penalties for those venues that do not adhere to epidemiological measures, as they are causing damage to public health and to all those businesses that are operating in consistence with the authority's measures.
Austria Cautions Citizens Not to Travel to Croatia
ZAGREB, Aug 14, 2020 - Austria's foreign ministry on Friday warned against travel to Croatia, as concerns grow that vacationers could catch the coronavirus and spread it once they return, the Reuters news agency reported.
Austria fears that when holiday-makers return from Croatia, which on Thursday recorded a record number new cases of the infection, that could lead to accelerating the spread of the virus on its territory.
The ministry said that the warning is effective from August 17 (you can read the full text of the warning, in German, on this link).
On Thursday Italy introduced a mandatory test for the coronavirus for anyone arriving from Croatia, Greece, Malta and Spain. That same day spokesman for Slovenia's COVID response team, Jelko Kacin, hinted that Croatia might be denoted to the red list of unsafe countries.
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Croatia Reports Record High Daily Cases of COVID-19
ZAGREB, Aug 14, 2020 - In the last 24 hours there have been 208 new cases of the infection with coronavirus in Croatia, and the infection took two more lives, the national COVID-19 crisis management team reported on Friday.
The number of active cases rises to 961, the head of the Croatian Institute of Public Health (HZJZ), Krunoslav Capak told a news conference in Zagreb.
This is the second day in a row with record-high daily numbers of new cases. On Thursday, the team reported 180 new infections.
Currently, 106 COVID patients are receiving hospital treatment, and of the 10 are placed on ventilators.
The latest two fatalities were a patient born in 1960 and a patient born in 1934 with underlying health conditions.
Since 25 February when the country reported its first confirmed case of this communicable disease, 6,258 have tested positive, and of the 163 have died, while 5134 have recovered.
Currently, 3,158 people in Croatia are self-isolating.
Since the outbreak of the disease, 134,742 people have been tested, including 1,249 in the last 24 hours.
The average age of the newly-infected patients is 31 and they usually develop mild symptoms, Capak said.
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Stari Grad Council Votes 13-0 Against Plan Amendments for Four Seasons Hvar Resort
August 14, 2020 - Another major foreign investment in Croatia heading for the graveyard, despite being a project of national strategic importance? A major blow for the Four Seasons Hvar project.
It is more than three years since I find myself in the rather unusual position of drinking Champagne on a specially chartered train from Zagreb to Sesvete, in the east of the Croatian capital, before a transfer to a warehouse.
It was perhaps not the most luxurious of settings, but what I found inside certainly was, a mock-up room of the 140-million-euro showcase Four Seasons Hvar resort, which was about to up the luxury tourism story on the Adriatic.
The Brizenica Bay and Four Seasons partnership in Stari Grad was set to give Croatia's premier island of Hvar the global hospitality brand worthy of its elite identity, and the mood within that Sesvete warehouse was ebullient, as TCN reported at the time:
"This extremely important project, almost a billion-kuna investment, will be of great importance to Stari Grad on the island of Hvar as well as for the whole of Croatia. The island of Hvar will be provided with the necessary quality accommodation facilities, which will certainly stimulate further investment in additional facilities, thus enabling the further development of tourism on the island of Hvar. This is also an opportunity for the local tourist community to begin with the complete management of this destination and thus make the island of Hvar a high quality destination. As an islander, I am particularly pleased to see that the potential of our islands has been recognised and I would be delighted if such investments were made on my island as well.'' said Tourism Minister Gari Cappelli, adding that this investment would certainly trigger other potential investors to pay deeper attention and look for opportunities for investment on the island of Hvar, in Split-Dalmatia County and in Croatia in general.
Dennis Wijsmuller, co-founder and CEO of Arqaam Capital, highlighted how proud Arqaam Capital is to support the Croatian tourism development strategy and contribute to the social and economic development of the country, the island of Hvar, and especially Stari Grad.
"By realising this project, we are strengthening the tourist infrastructure within the region, creating new jobs, and firmly placing the island of Hvar on the global luxury destination map'' stated Wijsmuller, noting that the first guests at Brizenica Four Seasons - Resort and Private Residences are expected in 2019.
Time passed.
2019 passed.
Minister Cappelli's time in the spotlight passed.
Nothing happened.
It is now 13 years since the investors bought the land to develop the resort. One might have thought that a public announcement from a government minister stating that this was a project of strategic national importance would mean something in a country starved of foreign investment, largely due to its bureaucracy. And yet, it appears not to be the case.
A town council meeting in Stari Grad yesterday voted on the changes to the urbanistic plan to include amendments to the Four Seasons Hvar project, which now has a location permit, but still no road access after all these years. The investors must have been confident that the amendments would pass or they would not have put it forward for approval (if rejected, an amendment cannot normally be resubmitted for 6 months). But it would seem that their local intelligence was somewhat lacking.
The vote of the 13-person Stari Grad council was unanimous - for the motion 0, against the motion 13.
Yet one more delay for this increasingly ill-fated project, perhaps a fatal one. Interestingly, 6 of the 13 councillors to vote against were members of the ruling HDZ party, whose minister talked of the project's national strategic importance just three years ago.
As a message to the international investment community, this is the latest high-profile failure of a major international hotel brand in Croatia.
As I noted in an editorial over a year ago, while the potential of Croatian tourism is huge for international investors, the successes are miniscule compared to the competition. Neighbouring Montenegro, for example, has a much higher investment despite a lesser tourism brand and only a sixth of Croatia's coast. Major investments of 1.1 billion euro (Orascum, Egypt), 900 million euro (Porta Novi, Azerbaijan) and 500 million euro (Porto Montenegro, Canada and UAE) are just some investment examples which dwarf the size of the most successful major investments on the Croatian Adriatic - 160 million euro in Falkensteiner Punta Skala in 2011 and Sun Gardens Dubrovnik in 2009.
Local sources in Stari Grad told me that the opposition to the project resolves around unfulfilled financial promises (a commitment to pay for the connecting road - a road, it should be noted, whose ownership is still to be determined), aggressive lobbyists, a total absence of community involvement. Issues, one would have thought, could have been resolved over a 13-year period since the acquisition, but apparently not.
A 13-0 vote against three years after a public government commitment tells its own story and probably signals the Brizenica Bay Four Seasons Project to the major foreign investment graveyard for which Croatia has unfortunately become well-known. The door has been left open, however, as next year is election year. Applications can normally be resubmitted only after six months, but the council has agreed to a vote at any time. One wonders what would have to happen to enable a unanimous vote against to suddenly become acceptable.
It is not all bad news for foreign investors, however, and this weekend sees the opening of only the second 5-star hotel on Hvar. Maslina Resort in Stari Grad lies across the bay from Brizenica Bay. Smaller in size, embracing local manpower and products where possible, it has managed to navigate the rocky waters of Croatian planning, as well as the setbacks of corona, to open one of the most luxurious developments on the Adriatic.
It is a rare exception to the rule for foreign investments on the Adriatic.
