November the 11th, 2022 - This week in Croatian politics, we've had everything from still apparently not really knowing what's going on with Sberbank's shares in Fortenova and talk of the alleged Croatian desire to squash corruption, to more cash for foster parents, a blast from the past with COVID-19 and of course, Croatia's Schengen approval.
The Croatian Government is seeking additional financial help from the European Union following the coronavirus pandemic
With the utterly dire situation being faced by Ukraine following Russian invasion early this year and inflation causing us to have to dig deeper and deeper to make ends meet, the global coronavirus pandemic which rocked the world in 2020 almost seems like a distant memory. The government however is still working on patching up the enormous holes it left in the state budget and now wants additional financial help from the powers that be in Brussels.
Assistance in the amount of 550 million euros from the SURE instrument will be sought by the Croatian Government, and with the decision it recently made on that, it also obliged state-owned companies to pay 60 percent of last year's net profit into the state budget for the year 2022.
Taking into account the increase in public expenditures by 2.2 billion euros from February the 1st, 2020 to the end of April, 2022 due to national measures taken to address the socioeconomic consequences of the outbreak of the coronavirus pandemic, Croatia decided to request additional financial assistance from the SURE Instrument in the amount of 550 million euros, stated Finance Minister Marko Primorac, noting that the SURE Instrument (a European Union instrument for the issuing of temporary support to reduce the risk of unemployment in an emergency situation) provides extremely favourable financing conditions.
He also stated that on October the 25th, 2022, the Council of the EU adopted an amendment to the Implementing Decision of the Council, which approved Croatia's request for additional financial assistance to be paid out in the amount of 550 million euros.
European Chief Prosecutor Laura Codruta Kovesi says there is a will to stamp out corruption in Croatia
Laura Codruta Kovesi stated that corruption can unfortunately be found absolutely everywhere and there are no "clean" countries anywhere in Europe. She added that Croatia is showing its willingness to uncover and investigate criminal acts that harm the financial interests of the European Union.
"There's a myth that I would like to dispel today. If Croatia or Bulgaria or Romania have more cases of corruption that come to light than some other EU member state, it doesn't mean that these countries are more corrupt than others. There is no 'clean' country in Europe. Corruption is everywhere," said Europe's chief prosecutor.
"Here in Croatia, I see the will to uncover these criminal acts, to investigate them, and I think that is very important because when we talk about corruption and the fight against financial fraud, how the authorities position themselves is very important. If they sweep everything under the rug and don't uncover any cases, it doesn't mean that things are clean. I think the number of cases shows that there is political will... And that everyone is doing an excellent job," she pointed out.
She said that all cases are equally important, whether they involve ministers or ordinary people, because everyone is equal before the law and investigations into corruption are conducted in the same way. More than 1,200 cases of corruption are now under investigation by the European Public Prosecutor's Office (EPPO), but she said she couldn't talk about them publicly and couldn't comment on individual cases and cases which are currently under investigation.
It is estimated that the loss from VAT fraud, especially related to organised crime, amounts to 60 billion euros annually across the EU. In the first year of the EPPO's operations, criminal assets worth 250 million euros were confiscated. The EPPO's annual budget otherwise stands at a massive 44 million euros.
The Fortenova saga continues, and it has now come to light that the Dutch court never gave its approval for the sale of Sberbank's Fortenova shares to anyone
The competent Dutch court did not approve the sale of Sberbank's stake in Fortenova to an investor from the United Arab Emirates, claims the Croatian Ministry of Foreign Affairs, stating that permission was neither sought or issued at any point.
The Croatian Ministry of Foreign Affairs asked the Dutch Ministry of Foreign Affairs for an answer to the question of whether the Dutch authorities had given approval for the above transaction. They received an answer that permission was never requested, nor was it issued.
The MVEP states that the ministries will cooperate in order to determine all of the relevant information regarding the violation of the EU sanctions regime which has caused this scandal. It should be noted that the approval for the sale of Sberbank's 43 percent stake in Fortenova was not even given by the competent authorities right here in Croatia.
According to the EU regulation, a possible exemption can be provided for such transactions in the event that the competent authority of that EU member state grants its approval, but considering that the competent authorities here in Croatia and up the Netherlands have not done this, it is likely that the mystery surrounding the Fortenova saga will continue.
The police contact the State Attorney's Office of the Republic of Croatia in regard to the Fortenova situation
Interior Minister Davor Bozinovic recently confirmed that the police have approached the State Attorney's Office of the Republic of Croatia (DORH) regarding the sale of Sberbank's shares in Fortenova. He also pointed out that at the stage when the Council for the Implementation of Sanctions is in session and they are collecting all the necessary information, nobody can give any concrete answers.
When asked if the Arab investor to whom Sberbank sold its stake in Fortenova is coming to Croatia and if there will be a meeting in the government, Bozinovic repeated that he did not know and that there were many things that needed to be investigated and clarified before he could speak on anything.
When asked if the government had received SOA's report on Fortenova, he said that SOA regularly reports to the state and institutions about this and other such matters. When asked repeatedly whether he had received information from the SOA, he answered in the affirmative, but added that he could not reveal anything at this moment in time.
The government increases allowances paid out to foster parents
Prime Minister Andrej Plenkovic stated at a recent government session that by increasing the basis for calculating the compensation to be paid out to foster parents and maintenance allowance for the year 2023, an additional step forward will be made for 2,504 Croatian foster parents.
"We are making an additional step forward for 2,504 foster parents and 5,838 beneficiaries in foster families," Plenkovic said, adding that this is a continuation of the increase in financial resources being poured into the field of foster care.
The government provides 160.5 million kuna in EU cash for the construction of a new port terminal in Osijek
The Croatian Government recently secured state co-financing in the amount of 160.5 million kuna for the construction of a bulk cargo transshipment terminal in the Port of Osijek. Government decisions have as such given consent to the Port Authority of Osijek to assume obligations at the expense of the state budget throughout 2023, 2024 and 2025 in the total amount of 160.5 million kuna.
Back in September this year, the Board of Directors of the Osijek Port Authority made a decision to enter into a contract for the construction of a new port terminal with GH Holding from neighbouring Slovenia. The value of the works was determined in the total amount of 143.5 million kuna without VAT, or 179.3 million kuna with VAT, with a deadline of 28 months.
The financial resources needed to settle the anticipated contractual obligations have been secured from the European Cohesion Fund and the State Budget of the Republic of Croatia for 2022 and projections for the years 2023 and 2024.
The new terminal for transshipment of bulk cargo in Osijek will be located on the right bank of the Drava River in the eastern part of the port area, and it will include two new connections spanning a length of 240 metres, the installation of facilities for the transshipment, loading and unloading and transport of goods, an access road which will be 300 metres long, railway tracks with a length of 610 metres, crane tracks and roads with a length of 285 metres, a substation and the construction of the necessary communal infrastructure, according to the State Secretary in the Ministry of Maritime Affairs, Transport and Infrastructure, Josip Bilaver.
The construction of the brand new Osijek port terminal will reduce traffic congestion in the city centre and the negative impact on the environment and noise, and the safety of ships in the port will increase, he added.
Croatia is given the nod to join Schengen by the European Parliament
Last but by absolutely no means least, the moment we've all been waiting for has finally arrived and Croatia has been given the final nod from the powers that be to join the Schengen zone at long last. This is certainly a moment HDZ is likely to run with as a scamp of their perceived success in Croatian politics.
In his opening address at a recently held government session, Prime Minister Andrej Plenkovic said that the European Parliament had just voted for Croatia's entry into Schengen.
"We are very satisfied with the presentation of the Commissioner, that is, the Vice-President of the EC, who gave very clear and strong support. There were 534 votes in favour of Croatia's membership of the Schengen zone," said the Prime Minister, congratulating Interior Minister Davor Bozinovic and the whole team who have been leading the activities to push for Croatian Schengen accession for the past few years.
"We are moving towards the final steps of the final adoption at the level of the EU Council on December the 8th" said the Prime Minister, adding that "with this, in addition to the decisions already made regarding membership in the Eurozone, Croatia will complete its two goals of deeper integration within the EU with both Schengen and Eurozone entry as of the 1st of January, 2023.
"These are such major capital foreign policy state goals that have now finally been realised, and in the years ahead we will have the opportunity to talk about the fruits of Croatia's additional international positioning," he said.
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