An overview of the latest political, business and tender news from Croatia, including analysis on Brkic's decision to withdraw from consideration for the Veterans Minister. This is the last bulletin which will be posted on TCN. If you would like to try a free trial for a week delivered to your inbox by 09:00 each weekday morning, or information about our subscription rates, contact us on This email address is being protected from spambots. You need JavaScript enabled to view it.
Zagreb, March 14, 2016.
Politics 1
Business and Economy 2
Analysis 3
Bulletin 4
Weekly Agenda 5
Selected Tenders 6
Politics
Milijan Brkić Withdraws His Name from Consideration for Veterans Minister
HDZ secretary general Milijan Brkić announced on Sunday evening that he had withdrawn his name as a candidate for Veterans Affairs Minister. He informed the public about his decision on Facebook. “I thank you for the support you gave me in the last 20 days since HDZ and its president Tomislav Karamarko nominated me as a candidate to be the Veterans Affairs Minister. I am proud that I was suggested as a candidate, particularly since I have received great support from my fellow soldiers and the general public. Of course, in politics, there are those who would like different solutions. The number of candidates has increased to about ten, and the unresolved situation has been used for speculation and defamation of the Patriotic Coalition, HDZ, Croatian veterans, and me personally. The post of the Veterans Affairs Minister must not be a ‘field’ for relentless political bickering and the future Minister (whoever he or she is) should not be held hostage by the irresponsible part of politics and the media. My first condition for the acceptance of this honourable duty was a fair, open, and honest relationship and consensus among the ruling majority, which on this occasion has not been achieved. In order to end this agonising situation, I would like to announce that at this moment I cannot accept this honourable duty. In addition, I would like to emphasise that I am very pleasantly surprised by the sensibility that was shown with regards to the veterans’ issues by Prime Minister Tihomir Orešković. I am sure that, whoever the new Minister is, they will have his full support, for which I am sincerely grateful. Finally, today we can confirm the great words of the first Croatian President Franjo Tuđman, who said that we have our Croatia and that we know how to preserve it, because ‘The future belongs to us’.”
MOST MPs Leave Parliament in Protest over HNB
Members of Parliament from MOST, together with opposition MPs, left the Parliament during a voting session on Friday because Parliament was not scheduled to vote on reports about the activities of the Croatian National Bank (HNB). During the last week, there have been arguments whether the reports should be put to a vote or whether they should just be officially acknowledged. MOST disagreed with those who claimed that putting the reports to a vote would be against European rules which demand independence of the Central Bank. MOST’s MPs left their benches after Speaker Željko Reiner refused to allow a break in the session. They were followed by members of the opposition. “There is no quorum so we cannot continue,” said Reiner. Commenting on the situation, Ivan Šuker, president of the HDZ Parliamentary Caucus, said that MOST was behaving irresponsibly. Ivan Bulj (MOST) replied that MOST was actually being responsible to the citizens. Afterwards, Ines Strenja Linić (MOST) and Gordan Jandroković (HDZ) gave a joint statement to the media saying that it was all a misunderstanding and failure in communication. “It was a small misunderstanding that has been resolved,” said Strenja Linić. “We came to an agreement of sorts and next week we will continue with the regular session,” she explained. Jandroković added, “Starting from next week, we are certainly going to improve the level of communication and organisation.”
NGOs Protest against Closure of Borders for Migrants
About three hundred protesters gathered at St. Mark’s Square in Zagreb on Friday evening, protesting against the closure of the so-called Balkan migrant route. They sent a message to the European Union that the decision to close the borders for refugees means giving the green light to smugglers and threatens human lives. During the peaceful gathering, the protesters expressed their disagreement with the policies of the Croatian government and the EU toward refugees. “Croatia is a country of open doors, both due to its war and refugee past and due to a moral obligation to people whose lives are in danger,” said the protesters. The crowd expressed its disapproval of Prime Minister Tihomir Orešković’s statement after the decision to close the borders on the Balkan route, when he reportedly said that “zero refugees is a good result for Croatia.” They described it as a shameful statement and added that “the only positive result for Croatia would be to accept all people who need security and protection.” The protesters carried banners reading “The President and the Prime Minister were also economic migrants,” “Cowards, open the borders,” “You delivered people to smugglers,” “History will remember you by the barbed wire,” “There is no them and us, we are all people,” and others.
President Grabar-Kitarović Visits Jordan
President Kolinda Grabar-Kitarović visited Jordan over the weekend and met with King Abdullah II. They continued talks started in mid-February in London, on the sidelines of a donor conference for Syria. They discussed further strengthening of bilateral relations and exchanged views on key global challenges, particularly the Syrian crisis which led to the migrant crisis faced by Europe. They also talked about the international fight against terrorism, extremism, and radicalism. The President informed King Abdullah II about the situation in Southeast Europe.
Vrdoljak: There Is No Chance for Coalition between HNS and HDZ
The HNS Main Committee met and proposed candidates for leading positions in the party. The official candidate for party president Ivan Vrdoljak later said that “there is not the slightest chance” for coalition between HNS and HDZ. He declined to comment on relations between the two parties since, as he said, they did not exist. Vrdoljak pointed out that his party was the first which said “no” to this kind of government. The new party leadership will be elected at the party congress on 16 April.
SDP Criticises 2016 Budget
SDP will not support the proposed budget for 2016, since it does not contain any of the announced reform measures and is hitting hard those who have the least, said on Friday MPs Branko Grčić, Boris Lalovac, and Milanka Opačić. They said that the projected revenues were estimated as being too high, while the projected expenditures were equally low, and added that there was nothing “spectacular” in the budget.
Ivan Tepeš re-elected President of HSP AS
Ivan Tepeš has been unanimously re-elected as president of the Croatian Party of Rights Ante Starčević (HSP AS). He said that the party held a parliamentary caucus for the first time in eight years and that it was necessary for Croatian national interests to have a strong Party of Rights. “Many have tried to break us apart and we have quarrelled among ourselves, but we have to be united and look for things which bring us together,” said Tepeš in front of some 1,500 party delegates. Commenting on some controversial statements which would be heard in speeches during the event, Tepeš distanced himself from “everything the guests at the event said.” He added that they spoke on behalf of their organisations and not HSP AS. HSP AS is a part of the ruling coalition and Tepeš is currently a deputy speaker of Parliament.
HNS Condemns Hate Speech at the HSP AS Event
Croatian People’s Party (HNS) said on Sunday that it strongly condemned hate speech and threats made during the HSP AS event and called on the State Attorney’s Office to investigate. “Ivan Tepeš has not distanced himself from the statements made by his party members, who among other things suggested that “Zoran Milanović, Vesna Pusić, and Milorad Pupovac should jump off a bridge into the Sava river,” said HNS in a statement. “It is now up to judicial institutions and the ruling coalition, because there is no room for hate speech and threats in the 21st century,” concluded HNS.
Luka Keller Elected President of ORaH
Luka Keller has been elected as the new president of the political party ORaH, replacing Mirela Holy. The 37-year-old lawyer polled 133 votes, beating his rivals, Leo Vukelić (78) and Ljiljana Katičić (50). The founder and former president of ORaH Mirela Holy resigned in December on the back of poor results in the parliamentary elections, which left the party without a single MP. Keller said that he wanted to position ORaH as a green centre party and a party of citizens. He announced plans for a “shadow government” with 10 experts – each covering one portfolio. Women rights, agriculture, fisheries, environment, energy, public administration, and EU funds are all areas that will be in ORaH’s focus, said Keller.
Business and Economy
Moody’s Downgrades Croatia’s Credit Rating
Moody’s rating agency downgraded its long-term credit rating of Croatian debt, citing as the key reasons the high public debt and the continuation of poor prospects for economic growth in the medium term. It has also maintained a negative outlook for the Croatian rating. Moody’s lowered the credit rating for debt in foreign currency from Ba1 to Ba2, and in local currency from A3 to Baa1. Moody’s believes that the process of fiscal consolidation will be slow. This trend, accompanied by the expected moderate levels of real economic growth, is likely to raise the debt burden above 90 percent of GDP by 2018. Moody’s also notes that the cost of debt financing is worsening. The agency also expects that the new government will face significant challenges in implementing its reform agenda. In particular, Moody’s notes that the current ruling coalition has a very narrow majority. A wide range of political views within the coalition and the relative inexperience of MOST’s MPs at the central government level increase the risk that the new government will not be able to retain its majority support in Parliament for economic and fiscal reforms.
Reacting to the news, Finance Minister Zdravko Marić said that the government would not repeat the mistakes of the past – constant hesitations and delays of reforms. “The government, and everyone who cares about Croatia, cannot be satisfied with this decision,” said Marić, and pointed out that Croatia’s credit rating is now at the same level in all three major rating agencies. “Moody’s gave its opinion on the basis of the work of the former government,” said Foreign Minister Miro Kovač. “However, you will see very soon, when they reassess the credit rating again, there will be changes,” said Kovač.
Economists React to Credit Rating Downgrade
Reacting to Moody’s decision, economists have largely agreed with its assessment. “Moody’s was waiting for the new Croatian government and expected it to follow the recommendations of the European Commission and initiate structural reforms. But they saw that it had continued with the same policies and that nothing had changed,” said economic analyst Damir Novotny. HSLS economic strategist Josip Budimir was also critical, “Anyone who comes to power does exactly the same thing the previous government did. We invent optimism without any basis, just in order to avoid serious reforms,” said Budimir. According to economic analyst Željko Lovrinčević, reforms should be radical. That would mean a significant reduction in the number of employees in the public sector, by about 35,000 to 40,000 jobs, elimination of parallel structures between agencies and government institutions, and termination of financing of various interest groups and the majority of NGOs from the state budget. He noted that Croatia currently had good external factors – low interest rates from the European Central Bank, low oil prices, tourism growth – but that in the next two years all that could change. According to Lovrinčević, if Croatia does not improve its credit rating in the meantime, interest on debt will begin to grow and that will bring problems for debt refinancing.
Regional Development and EU Funds Minister Meets with EU Commissioner for Regional Policy
Minister of Regional Development and EU Funds Tomislav Tolušić held talks on Friday in Brussels with EU Commissioner for Regional Policy Corina Cretu. This was his first visit to Brussels and his first meeting with the Commissioner in charge of the European Regional Development Fund, which has earmarked seven billion euros for Croatia in the 2014-2020 period. The Minister pointed out that Croatia had at its disposal 1.29 billion euros for the period 2007-2013, but had so far withdrawn only 738 million euros. The remaining funds must be withdrawn by the end of this year, since otherwise they would be lost. “We have to withdraw some 500 million euros in the remaining nine months, which is a big challenge,” he said. “We hope that the losses will be minimal, but it is clear that some major projects will be carried forward to the next programming period,” Cretu opined. She added that the EU could help, but that it could not do the job of the Croatian administrative system.
Croatian Exports of Goods Fall in January
Croatian exports of goods in January declined by 0.59 percent compared to the same month last year, while imports grew by 2.8 percent, announced the State Bureau of Statistics. According to preliminary data, Croatian exports in January amounted to 5.6 billion kuna, while imports reached 9.09 billion kuna. The trade deficit in January amounted to 3.46 billion kuna and was 9 percent higher than in January 2015. The export-import ratio decreased by 2.2 percentage points to 61.9 percent.
Analysis
Brkić’s Decision Opens the Way to Solve the Crisis in Government
Krešimir Macan analyses the latest developments. He is a respected Croatian PR profes sional specialising in crisis man agement, strategic communica tion in politics, and new social media, operating today a suc cessful private consultancy – Manjgura. You can contact Krešimir on: This email address is being protected from spambots. You need JavaScript enabled to view it.
Last night’s decision by HDZ secretary general Milijan Brkić to withdraw from the race to become Veterans Affairs Minister opens the way for Prime Minister Tihomir Orešković to elegantly solve the stalemate in which he found himself after he was publicly served with two decisions on appointments without prior consultations. Brkić was right when he assessed that it was more practical for him to resolve the issue of his allegedly plagiarised university diploma without being the Veterans Minister, since he would then be forced to resign. And, according to Interior Minister Vlaho Orepić (MOST), the Interior Ministry will complete the review of dozens of allegedly plagiarised final university theses by this summer. On the other hand, with Brkić’s withdrawal, there is now room for Orešković to countersign the decision to dismiss the Security Intelligence Agency Director, which has been served to him by President Kolinda Grabar-Kitarović, which would mark the beginning of the takeover of the intelligence apparatus, which has been quite a frustrating issue for the HDZ leadership so far. That would finally end the saga about forming the government. Prime Minister Tihomir Orešković would demonstrate that he has the final word, and he would save face and confirm his authority as Prime Minister. Milijan Brkić showed that he was not putting himself above everybody else and has smartly given up on the bid himself, especially considering that he did not nominate himself anyway. The only apparent loser could turn out to be Tomislav Karamarko, who nominated Brkić and repeatedly insisted on him in public as the choice of HDZ.
Orešković Getting Closer to MOST?
Tea Romić and Iva Puljić Šego analyse what could happen in the event of early parliamentary elections (published in Večernji List on 14 March 2016).
Relations within the government, fraught with tension between HDZ and MOST, and HDZ and Prime Minister Orešković, have given rise to speculation about early parliamentary elections. It seems that, if HDZ were to provoke new elections, Prime Minister Orešković could go to the polls together with MOST. That theory is supported by his good relations with MOST leader and Deputy Prime Minister Božo Petrov. They have a similar circle of acquaintances, and it is obvious that the Prime Minister does not consider HDZ as “his” circle. Orešković is especially bothered when coalition partners criticise one another in the media, which is how HDZ and other members of the Patriotic Coalition often act. Karamarko’s objections, raised in the media, should be seen in the context of the fact that he feels he is being ignored and that HDZ’s power and importance are not valued enough. HDZ is additionally frustrated by the fact that it is the biggest party in government, but it seems it must get a green light from MOST for virtually every single decision. People close to Orešković say that he did not leave his lucrative job to do nothing. In other words, he intends to stay in office until the end of the term. It is certain there will be no early parliamentary elections before the intraparty elections in HDZ are over, but it is possible that Orešković will then join MOST for the new elections. That would be a ‘win-win’ situation for both MOST and Orešković. Although both sides claim there were no such discussions, it is clear that such a scenario is very likely.
Bulletin
Justice Minister to Accept Resignation of Assistant Minister
The newly-appointed Assistant Minister of Justice Slavko Kovačević has offered to resign, and Minister Ante Šprlje announced on Friday that he would accept the offer. Slavko Kovačević, head of security at Pula prison, was appointed as Assistant Minister at the government session held on 4 March. He was supposed to head the Croatian prison system. Shortly after his appointment, it was discovered that Kovačević was convicted in 2004 for physical assault on a minor person which resulted in a serious bodily injury, albeit resulting in a suspended prison sentence.
HRT Acting Director General Names New Senior Editors
Acting Director General of Croatian Radio and Television (HRT) Siniša Kovačić on Friday appointed Katarina Periša Čakarun as the acting Head of News, replacing Lamija Alečković. Ružica Renić Andrijanić was named the editor of HTV1, replacing Igor Tomljanović. On Sunday, HRT announced that starting on Monday the main evening news will have new presenters and editors.
Scientific Community “Shocked” by 2016 Budget Proposal
The Croatian scientific community is shocked by the 2016 budget proposal, in which the field of science lost some 450 million kuna, which means among other things that the academic community will have no access to leading scientific journals, since no money has been provided for subscriptions, said on Friday the Vice-Rector of the University of Zagreb Miloš Judaš. Funds for science have been cut by 150 million kuna, with an additional 300 million kuna being lost when compared to the budget review which was adopted at the end of last year, said Judaš.
Ivan Macanić Appointed Acting Director of the Paying Agency for Agriculture, Fisheries, and Rural Development
Ivan Macanić has been appointed Acting Director of the Paying Agency for Agriculture, Fisheries, and Rural Development. He was previously the Deputy Director and was appointed to his new post after former Director Ante Pezo’s term expired.
Foreign Minister Kovač Meets with Representatives of Republika Srpska
Foreign Minister Miro Kovač met in Zagreb on Friday with Vice President of Republika Srpska (RS) Josip Jerković and Minister for Refugees and Displaced Persons Davor Čordaš with whom he discussed relations between Croatia and Bosnia and Herzegovina (BiH), and the status of Croats in BiH, especially in RS. “We are convinced that the Croats in Bosnia and Herzegovina, the Croats in the RS entity, will be a powerful engine of integration into the EU,” said Kovač.
Weekly Agenda
Monday, 14 March
The Prince of Wales and Duchess of Cornwall will arrive in Croatia. They will meet with President Kolinda Grabar-Kitarović and Prime Minister Tihomir Orešković.
Foreign Minister Miro Kovač will take part in the meeting of EU Foreign Ministers in Brussels.
Parliamentary committees and bodies will meet and discuss the 2016 budget and budgetary projections for 2017 and 2018.
Minister of Construction and Urban Planning Lovro Kuščević will officially present keys to buyers of apartments built as part of the Subsidised Housing Programme in Split.
HNS will hold a press conference “The Budget Proposal – A Step Backwards for Croatia.” Speakers will include party president Vesna Pusić and vice president Ivan Vrdoljak.
Ahead of the upcoming European university games which will be held in Zagreb and Rijeka, 500 trees will be planted at the Jarun Sports Centre in Zagreb. The planting ceremony will include Mayor of Zagreb Milan Bandić, Minister of Science, Education, and Sports Predrag Šustar, President of the Organising Committee Zrinko Čustonja, Rector of the University of Zagreb Damir Boras, and well-known Croatian athletes.
The Zagreb District Court will continue the trial of former Prime Minister Ivo Sanader in the Planinska case.
The Ministry of Science, Education, and Sports will organise the round table “Financial Literacy and Young People,” as part of the World and European Week of Money.
Annual awards for the best achievements of young scientists and artists in 2015 will be awarded in Zagreb.
Tuesday, 15 March
The Prince of Wales and Duchess of Cornwall will continue their visit to Croatia. They will visit Osijek and Đakovo. In the evening, they will attend the celebrations of the 70th anniversary of the British Council in Croatia.
The Parliamentary Committee on Labour, Pension System, and Social Partnership will meet and discuss the 2016 budget.
The Ministry of Justice will mark the conclusion of the twinning project “Improvement of the Enforcement System in the Republic of Croatia.” The project was financed by the European Union and jointly implemented by Ministries of Justice from Croatia, Spain, and Hungary.
Split will host an international conference on the commercialisation of scientific research and innovations with the goal of developing the Croatian economy. The conference will be opened by Predrag Šustar, Minister of Science, Education, and Sports, together with senior representatives of the World Bank.
The National Conference of Primary School Principals will be opened in Šibenik. This year’s topic is “Organisation of Activities in Schools – Roles and Responsibilities.”
Wednesday, 16 March
A conference will mark the official beginning of the implementation of the Interreg IPA cross border cooperation programme Croatia-Serbia for the financial period 2014-2020. The programme will continue the successful cooperation between four counties in north-eastern Croatia and five districts in north-western Serbia.
The Croatian Academy of Sciences and Arts, International Institute for Brain Health, Croatian Society for Neuroscience, and Croatian Institute for Brain Research will jointly organise the symposium “Research and Disorders of the Brain.”
Thursday, 17 March
Lider weekly will organise the conference “Smart Cities 2016 – The Future Starts Now.” The aim of the conference is to bring together representatives of cities, creators of smart solutions, academia, and the public sector in order to jointly work towards the development of smart cities.
The website MojPosao will organise a two-day conference on human resources management – HR Days: “How to Manage a New Generation of Employees?”
Friday, 18 March
The Agency for Electronic Media and the Council for Electronic Media will organise the round table “Hate Speech and Responsibility of the Media – From Freedom of Expression to Violation of Law.”
Ambitio College will present the “Training Programme for Managers in Health Tourism.” The project is co-funded by the EU’s European Social Fund. The goal is to train staff necessary for the expansion of health and medical tourism in Croatia.
Selected Tenders
Tender: Reconstruction of Čikola-Kljaci Water System
Client: RAD, d.o.o.
Value: 227,000 euros
Submission deadline: 30 March
Description: Water supply system in Drniš is made of pipes in a very poor condition. The project involves replacing the existing pipeline in the length of 1.5 kilometres. The area involved is Kljaci-Mirlović Polje. Construction works must begin with 14 days after the contract is signed. Works should last no more than seven months, and should finish by 15 December at the latest.
Tender: Forth Phase of the Construction of the Sokolovac Elementary School and Sports Hall Complex
Client: Koprivnica-Križevci County
Value: 350,000 euros
Submission deadline: 29 March
Description: Subject matter of the procurement are the following works: construction works on the existing school building, delevelling of the kitchen and of the toilets for people with physical disabilities, construction works on the sports hall, landscaping, installation works. Works must begin within eight days after the contract is signed, and must be completed by 15 August. Works related to the kitchen and toilets for people with disabilities can begin only after the school year 2015/16 is finished.
Tender: Professional Audio Equipment
Client: Croatian Radio Television
Value: 125,000 euros
Submission deadline: 18 April
Description: The client is procuring professional audio equipment. The equipment is divided into five groups (wireless microphones for TV studio, audio equipment for Centre Pula, audio equipment for Centre Rijeka, audio equipment for Centre Dubrovnik, audio equipment for Centre Osijek). The equipment must be delivered to HRT central storage facility in Zagreb within 45 days after the order is received, by 31 August at the latest.
Tender: Renovation of the Hot Water Supply Network
Client: HEP –Toplinarstvo, d.o.o.
Value: 215,000 euros
Submission deadline: 25 March
Description: Subject matter of the procurement are works on the renovation of the hot water supply network in the city of Osijek, including: replacement of distribution system JUG III (pipe dimensions from NO40 to NO100; length: 640 m); replacement of the Kapetanija hub (pipe dimensions from NO50 to NO100; length: 142m); replacement of Crikvena hub (pipe dimensions from NO50 to NO100; length: 365m). The final deadline for the completion of construction works is 1 October 2016.
Tender: Automation of Meteorological, Hydrological and Piezometric Stations with Operational Database
Client: HEP – Proizvodnja, d.o.o.
Value: 790,000 euros
Submission deadline: 12 April
Description: Subject matter of the procurement is the supply of equipment and services for the automation of meteorological, hydrological and piezometric stations with operational database for basins of rivers Lika and Gacka, Lokvarka and Ličanka, Kupa and Zagorska Mrežnica, and Dobra and Rječina, in accordance with the technical specifications. The deadline for works to be completed is 18 months after the contract comes into effect.
Tender Furnishing and Equipping Border Police Facilities
Client: Ministry of Interior Affairs
Value: 880,000 euros
Submission deadline: 18 April
Description: The client is procuring various equipment needed for border police facilities. The equipment is divided into groups (wood furniture; metal furniture; chairs, sofas, couches; kitchens and kitchen equipment; TV sets and other office equipment; gym equipment and other sports equipment). The equipment must be delivered by 1 July to border police facilities in Kupari, Metković, Vrgorac, Trilj, Donji Srb, Dalj, Ilok, Tovarnik, Slavonski Brod, Bajakovo, Stara Gradiška.
Tender: Procurement of Ambulance Vehicles
Client: Istarski domovi zdravlja
Value: 160,000 euros
Submission deadline: 5 April
Description: The client is procuring six ambulance vehicles. The vehicles must be new and unused. The deadline for delivery is 120 days after the contract is signed. The vehicles should be delivered to local health centres in Buzet, Labin, Pazin, Poreč, Pula and Umag.
Tender: Maintenance and Improvement of IBM Hardware and Software Support
Client: Croatian National Bank
Value: 590,000 euros
Submission deadline: 19 April
Description: The client is procuring services of maintenance, improvement and technical support for its hardware and software equipment during a period of one year. The services will be provided at the premises of the Croatian National Bank in Zagreb, starting immediately after the contract is signed and lasting for one year.
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