ZAGREB, 2 Sept 2021 - Croatian Defence Minister Mario Banožić on Thursday took part in an informal meeting of EU defence ministers in the Slovenian capital of Ljubljana, which focused on the situation in Afghanistan, the Croatian ministry said.

Banožić said at the meeting that lessons learned in Afghanistan should be applied in the common security and defence policy so as not to repeat the same mistakes.

"In cooperation with our partners, we must focus on the prevention of a humanitarian disaster in the form of uncontrolled migrations and make sure Afghanistan does not become a haven for terrorist organizations," he said.

As for the EU's operational engagement, Banožić said that support to partners in the Sahel, Libya, and the EU's immediate neighborhood was unquestionable but that at the same time one should make it clear that the partners were expected to implement the necessary political and security reforms.

For more on politics, follow TCN's dedicated page.

ZAGREB, 2 Sept 2021 - Industrial producer prices in Europe increased in July at the highest rate since statistics have been kept by Eurostat, reflecting the recovery of demand as COVID-19 restrictions were eased, the EU's statistical office reported on Thursday.

In July 2021, industrial producer prices rose by 2.3% in the euro area and by 2.2% in the EU, compared with June 2021, the strongest increase in the past twenty years. In June prices increased by 1.5% in the EU and by 1.4% in the euro area.

The accelerated increase in industrial producer prices reflects strong demand and frequent problems in the supply of parts and raw material alongside economic recovery from the coronavirus crisis and the hike in energy prices.

The highest increase in prices on the month was registered in the energy sector, of 5.3% in the EU and 5.7% in the euro area.

In the EU, industrial producer prices increased by 2.1% for intermediate goods, by 0.7% for durable consumer goods, by 0.6% for capital goods, and by 0.1% for non-durable consumer goods. Prices in total industry, not including energy, increased by 1.1%.

Industrial producer prices increased in all member States except Malta, where they remained stable. The highest increases were recorded in Ireland (+20.6%), Estonia (+6.4%), and Belgium (+4.2%).

In Croatia, industrial producer prices increased by 1.5% on the month, the strongest jump since the end of 2016. In June they increased by 1.1%.

Year-on-year, industrial producer prices in the EU increased by 12.2% in July and by 12.1% in the euro area. In June they increased on the year by 10.4% and 10.2% respectively.

The increase in prices was the strongest in the energy sector, where prices jumped by 28.3% in the EU and 28.9% in the euro area.

Industrial producer prices increased in all member states, with the highest increases being registered in Ireland (+67.7%), Estonia (+23.5%), and Belgium (+23.0%).

In Croatia the annual increase in industrial producer prices in July was 8.9%, this being the biggest increase since September 2012. In June they increased by 8.0% y-o-y.

For more, make sure to follow our business section.

ZAGREB, 2 Sept 2021 - The cattle farming sector is among the sectors worst hit by the corona crisis, and budget support to cattle farmers was one of the topics on the agenda of Thursday's meeting between Prime Minister Andrej Plenković, Agriculture Minister Marija Vučković and representatives of that sector.

The meeting also discussed the continuation of negotiations with the European Commission on additional measures necessary for the regulation of the market.

The talks focused on the rise of fodder prices in the last nine months, and Vučković said that this trend was triggered entirely by external circumstances and disruptions caused by climate change.

Animal husbandry in Croatia is particularly affected by a rise in the prices of cereals and oil crops of between 20% and 80% on the year.

Commenting on the vulnerability of livestock farming, the minister admitted that the sector had been faced with big challenges since Croatia's admission to the EU.

However, some statistics show recovery, such as the halting of the drop in the number of cows, and there has been a modest rise in cattle headcount, the minister said.

She said that since Croatia's admission to the EU, the number of milk producers had dropped by 60%, however, the output per milk producer had risen twofold.

A representative of cattle growers, Damir Horvatić, said that the authorities should step up the protection of domestic production.

He proposed a ban on the export of cereals until local demand is met so as to avoid fodder shortage.

Horvatić also appealed for better regulation of the use of arable land.

He pointed out that in 2020, a kilogram of maize cost 1.20 kuna to rise to 1.80 kuna this year, whereas the price of a liter of milk was HRK 2.80 to fall to HRK 2.70 this year. 

For more, make sure to follow our business section.

ZAGREB, 2 Sept 2021 - Memorials honoring Holocaust victims were put up in the northern Croatian towns of Čakovec and Prelog on Wednesday, with Israeli Ambassador Ilan Mor expressing hope that the memorials, called Stolpersteine (stumbling blocks), would prompt young people to ask themselves who those victims were. 

The Stolpersteine placed in the pavement in six locations in Čakovec and two in Prelog commemorate 28 members of the Jewish community and the event was organized by the Jewish community of Čakovec, Čakovec town authorities, the town authorities of Prelog and Međimurje County.

This is an exceptional idea that pays tribute to all families and innocent victims of the Holocaust, Ambassador Mor said, adding that the memory of the victims continued to live in the cities where their names were inscribed in public areas.

The head of the Jewish community in Čakovec, Andrej Pal, said that "certain historical facts falling into oblivion or even being denied contributes to the disappearance of the community that lived and worked in this area and helped develop it."

Pal noted that before World War II 1,200 Jews lived in Međimurje, of whom 700 were killed or went missing during the war.

Međimurje County head Matija Posavec said that with Holocaust remembrance Međimurje was being promoted as a tolerant, open and humane region.

"We have organized The Week of Jewish Culture, the local museum has organized numerous exhibitions, Eva Panich Nahir is an honorary citizen of Čakovec, and the State Archive has restored the Jewish register of births, marriages, and deaths, simply because Jews have left an important mark on Međimurje's economy, culture and overall development," said Posavec.

For more about Croatia, CLICK HERE.

ZAGREB, 2 Sept 2021 - Croatian National Bank (HNB) governor Boris Vujčić has said that the HNB's legal proposal is aimed at regulating tacit overdrafts the same way authorized overdrafts are regulated, which would result in greater consumer protection but also cause a drop in bank revenue of more than HRK 100 million annually.

Addressing a news conference on Thursday, Vujčić recalled the HNB's proposal for amendment of the Consumer Credit Act in the segment concerning authorized and tacit overdrafts. The HNB will agree to those changes with the government and it will also meet with bank representatives, Vujčić said, noting that the final form of the bill had still not been defined.

Vujčić said that the HNB completed a market analysis in Q1 2021 and that its findings, together with legal proposals, were presented to the Finance Ministry in April.

The analysis of the overdraft market was launched in 2020, showing that a large portion of overdrafts had changed from authorized to tacit overdrafts.

Vujčić stressed that the Consumer Credit Act, adopted much earlier, was designed to make tacit overdrafts an exception, but that when it was established that most overdrafts had turned into tacit overdrafts, a decision was made to impose the same regulation mechanism for those overdrafts as for authorized overdrafts.

In the case of authorized overdrafts, the effective interest rate is capped and banks have the obligation, when opting to cancel that service, to offer their client the possibility of repaying their debt in 12 installments.

"This legal proposal is an attempt to set a maximum effective interest rate (on tacit overdrafts) and make banks offer repayment in installments if their clients get into problems. Banks can do that now but they are not obliged to. In the future, they will have to do just that," said Vujčić.

He noted that the legal proposal was not about abolishing tacit overdrafts.

New agreements on tacit overdrafts will thus have to be limited to 90 days and HRK 1,500, and Vujčić said that the adoption of the new law could result in a drop in bank revenue of HRK 100 million annually, noting that that would depend on the final version of the bill, however, the estimate was not expected to change significantly.

Depending on the type of loan, wage, and overdraft amount, consumers would be able to save between HRK 150 and 450 a year.

Interest rates should reflect product-related risks 

Vujčić also said that of some 1,000 consumer complaints the HNB received in 2020, seven referred to tacit overdrafts, and when asked if the HNB could have reacted sooner, he said that this was not a problem previously as the effective interest rate on tacit overdrafts was not high.

The average effective interest rate for overdrafts grew in 2020 because banks raised their fees, not interest rates. "Before that, we did not have any reason to intervene, and now we do," he said.

Vujčić said that the matter was a very complex and sensitive one and that putting a cap on the interest rate was not, as believed by some, necessarily the best solution because it could exclude a large number of citizens from the market.

He noted that interest rates should reflect product-related risks and that in principle tacit overdrafts indeed entailed the most risk as there was no collateral and the client's creditworthiness was not checked, hence the high-interest rate.

He added that interest rates on tacit overdrafts in Croatia were lower on average than in EU countries that had not introduced the euro and higher than in those that were part of the euro area, but that that was not the case with other financial products.

Speaking of inflation, Vujčić said that there was no risk of very high inflation rates.

"However, in the euro area the inflation rate is slightly higher than forecast but we are still between 2% and 3%, which should not be worrying," he said.

For more on politics, follow TCN's dedicated page.

ZAGREB, 2 Sept 2021 - The latest macroeconomic trends indicate the upward revision of forecasts of the growth for this year and we now can expect a 7% rise on the year, Finance Minister Zdravko Marić said on Thursday.

He recalled that the government's current forecast is five percent.

Marić said that tax revenue from 1 January to 31 August was 0.7% higher than fin the corresponding period last year while VAT was over four percent more year on year.

YTD profit tax is a little lower as against the same period last year, but that was to be expected given that that is calculated based on the results in 2020. Contributions for pension insurance were 4% higher and that is on track with what we expected, he said.

The only levy that is mildly staggering is for automobiles which he explained by the reduction in some levies and global stagnation in the automobile industry.

As far as budget revenue is concerned, in August alone the value of fiscalised receipts was almost 21% higher than they were in August 2020.

He underscored a key role of the expenditure side for the sustainability of public finances.

Asked by the press about possible inflation in autumn particularly regarding food prices, Marić said that the latest data calls for caution.

According to the latest information from the national statistical office (DZS), inflation in July amounted to 2.8% on the year, the highest rate since April 2013. Consumer prices are fuelled by industrial producer prices which in July rose by 7.9% on the year, the biggest jump since April 2011.

Marić said that inflation was to be expected given monetary concessions on the global level and the amount of money released in the system which resulted in a drop in its price which then impacted inflation pressure.

He added that he isn't sure that the price hike on food and construction material can be entirely attributed to global trends and disruptions in the supply chain.

He warned there are very few prices that can be regulated as they are mostly regulated by the market and that market development and competitiveness are a must.

He recalled that when VAT was reduced on eggs, fresh meat, fish, fruit, and vegetables, tax policies had a limited impact because even after VAT was reduced the price of these products did not decrease significantly.

He mentioned the recurring rise in the debt by hospitals and that payment deadlines are now about 180 days for hospitals, 200 days for pharmacies and that the health insurance fund had transferred about HRK 5.9 billion to settle liabilities.

For more on politics, follow TCN's dedicated page.

ZAGREB, 2 Sept 2021 - Prime Minister Andrej Plenković on Thursday commented on the latest ECDC map on which Croatia's coast has stayed orange, saying that foreign tourists had recognized Croatia as a safe destination and that this year's tourism results could exceed 70% of tourism results in the pre-crisis year 2019.

"According to the new ECDC map, the Croatian coast has stayed orange into September. Foreign tourists have recognized Croatia as a safe destination and we could exceed 70% of the tourism results from the pre-crisis year 2019," Plenković said on his Twitter account.

Prema novoj karti @ECDC_EU, hrvatska obala ostala je ? i do početka rujna. Strani turisti prepoznali su ?? kao sigurnu destinaciju te bismo mogli i premašiti 70% turističkih rezultata iz pretkrizne 2019. Odgovornim ponašanjem i cijepljenjem čuvajmo i zdravlje i gospodarstvo ??! pic.twitter.com/uFZY36C4We

— Andrej Plenković (@AndrejPlenkovic) September 2, 2021

He concluded that with responsible conduct and vaccination public health and the national economy were being protected.

According to the latest European Centre for Disease Prevention and Control map, released on Thursday, eastern and central Croatia have turned red while the coast and northern Croatia have stayed orange.

For more on politics, follow TCN's dedicated page.

ZAGREB, 2 Sept 2021 - In the last 10 weeks, there have been 117 COVID-19 patients on ventilators, and 110 of them were not vaccinated against this infection, Health Minister Vili Beroš said on Thursday.

In the last 24 hours, 9,989 coronavirus tests have been performed and 8% or 798 have turned out to be positive; 11 COVID patients have died, bringing the COVID-19-related death toll to 8,349, the national coronavirus crisis management team stated on Thursday morning.

Currently, there are 3,943 active cases, and of them, 440 are receiving hospital treatment, including 53 who are on ventilators.

In the week from 23 to 30 August, 4,140 people tested positive for the virus, and 86.16% of them had not been vaccinated.

Hospitals are increasing their capacity for COVID patients in line with epidemiological developments, he said.

The minister informed the government that the average age of hospitalized patients in the fourth wave of the pandemic was lower than in the third wave. The share of children in hospitalized COVID patients has tripled, he noted.

More than 8 in 10 doctors, 6 in 10 nurses vaccinated

Since the start of its vaccine rollout, Croatia has administered nearly 3.3 million vaccines, and 42.64% of the population, or 51.22% of adult citizens, have been vaccinated.

Until 30 August, 83.17% of doctors and 60.84% of nurses and medical technicians got vaccinated.

Broken down by age cohort, the share of persons above 65 who have received at least one shot is 69.5% and 65.8% of them have fully been immunized.

Treatment of COVID-19 and sick leave have cost HRK 2.7 billion 

A day of hospital treatment of a COVID patient costs HRK 11,000 and the average duration of hospitalization is 20 days. Hospitalization and sick leave for COVID patients have cost the state HRK 2.7 billion so far, which is equivalent to half the value of Pelješac Bridge, Beroš said.

He warned that if the trend of unvaccinated people catching the virus continued, one could expect a further rise in hospitalizations and new mutations.

(€1 = HRK 7.5) 

For all you need to know about coronavirus specific to Croatia, make sure to bookmark our dedicated COVID-19 section and select your preferred language.