ZAGREB, 13 Nov, 2021 - The credit rating is important for the price of borrowing for the state, businesses and citizens as its upgrade lowers the risk premium, which has a favourable effect on the price of capital, Finance Minister Zdravko Marić told Hina on Saturday.

The Fitch Ratings agency yesterday upgraded Croatia's rating to BBB, the best in Croatia's history, with a positive outlook.

Marić said the rating was first of all closely related to debt price and the capital price for the state and, directly or indirectly, for the interest paid by businesses and citizens.

The Fitch rating has a positive effect on those processes, he said, but added that the upgrade should be viewed in continuity, recalling that until not so long ago the state paid a considerable amount for interest.

In 2015, the budgetary expenditure for interest was HRK 12 billion, which at that time was almost the entire budget of the education ministry, whereas now that expenditure is HRK 4.5 billion lower.

"Interest used to be 5-6% and now it is about 1% on the ten-year bond," said Marić, adding that the credit rating assessment was important both in times of low and in times of higher interest rates on capital markets.

"We are talking about reference interest rates," he said, adding that the increased money offer in recent years led to a considerable drop in reference rates, but that the total interest paid by citizens, businesses and the state was a sum of the reference rate and the rate related to a specific country and to the risk premium.

"That's where the rating strikes because Croatia can't influence the trend of reference interest rates, but it can the risk premium it pays."

Marić said Croatia had a stable growth, public finances in order, a clear prospect of entering the euro area, and political stability.

"Those are all elements which have an effect on rating improvement, which is then reflected in a better perception and reputation of a country like Croatia in the financial world, and in the end comes the effect on the risk premium," he said. That is important both when reference interests are low and when they are high, he added.

The investment rating is very important, not just for debt and capital prices but also for capital availability, Marić said.

"The moment you are in the investment zone, you are interesting to many more good investors who can invest in securities," he said, adding that international investors had restrictions and were often not allowed to invest in a country below the investment credit rating.

"That's why it's very good that that has changed for Croatia in terms of Fitch and Standard & Poor's," Marić said, adding that it was also important that Fitch had a positive outlook on Croatia. "That sort of indicates the direction the rating could take."

He praised the media focus on the credit rating, saying that it was good that people became aware of how important it was to know how to manage public money well.

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ZAGREB, 11 Nov, 2021 - At the end of September 2021, there were 303,535 business entities registered in Croatia, of which 58.2% were active, according to data from the national statistical office.

The majority of registered entities were trade companies (227,194), of which 140,976 were active.

There were 72,754 institutions, bodies, associations and organisations, including 34,844 active ones, 3,578 cooperatives, including 848 active ones, and 91,084 entities in crafts and trades and free lances.

Broken down by activity, the majority of entities were in wholesale and retail, with 54,417 registered and 28,990 active ones.

Services follow with 49,939 registered entities and 23,395 active ones.

There were 31,046 registered and 22,021 active entities in professional, scientific and technical activities, and 31,142 registered and 18,553 active ones in construction.

As for accommodation and food service activities, there were 24,428 registered and 14,213 active entities, while in manufacturing there were 23,720 registered and 15,629 active ones.

Seventy-nine percent of active legal entities (139,560) were privately owned.

Among active legal entities, 86,727 had between one and nine employees, 72,318 had no employees, 13,514 had between ten and 49, 3,502 between 50 and 249, 333 between 250 and 499, and 274 had 500 or more.

The majority of trade companies were limited liability companies, with 164,039 registered and 101,742 active ones, followed by simple limited liability companies, with 60,241 registered and 37,608 active ones.

The majority of registered legal entities was in the City of Zagreb (98,278), followed by Split-Dalmatia County (31,413) and Primorje-Gorski Kotar County (25,464), while Lika-Senj County and Požega-Slavonia County had the least, 2,547 and 2,627, respectively.

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ZAGREB, 23 Oct, 2021 - Close to 30% of companies in Croatia did not have any employees in 2020 when of 139,009 businesses, 41,595  (29.9%) did not have workers, the Financial Agency (FINA) has said in a report which is based on processed annual financial statements.

A total of 37,865 of the 41,595 businesses without employees operated normally, 1,273 were undergoing liquidation, and 2,457 were undergoing bankruptcy proceedings.

A total of 17,438 businesses operated at a profit while 24,157 reported losses.

The share of businesses without employees in the total number of businesses was high, 29.9%, but it was small in relation to other positive indicators, with the share of businesses without employees in total revenue being 2.7%, in expenses 3.1%, pre-tax profit 7%, profit for the period 7.4%, exports 2% and investments 2.7%, FINA said.

Most of the businesses without employees operated in trade (8,280), followed by professional, scientific and technical activities (6,023) and construction (4,644).

Businesses without employees in trade had the highest total revenue (HRK 4.3 billion), followed by businesses in real estate activities (HRK 3.5 bn), and businesses in construction (HRK 3.3 bn).

Businesses without employees in 2020 incurred a net loss in 13 activities and operated in the black in eight activities.

The total financial result of all businesses without employees was negative, a net loss of HRK 2.1 billion.

The highest net loss was reported by businesses in real estate activities (HRK 755.7 million), construction (HRK 690.7 million), and manufacturing (HRK 403.2 million).

The lowest loss was reported by businesses in Other service activities (HRK 3.4 million).

Businesses without employees reported a net profit in only two counties - Međimurje County (HRK 16.8 million) and Virovitica-Podravina County (HRK 8.6 million) - while those in other counties reported losses, the highest having been reported in Istria County (HRK 436.1 million), followed by Split-Dalmatia County (HRK 433.1 million), and Zadar County (HRK 304.5 million).

The net loss of businesses without employees in the City of Zagreb, which had the largest number of such businesses (14,500 or 35% of the total number), was HRK 54 million.

Broken down by type of ownership, most businesses without employees were privately owned (41,165 or 99%) and they also reported the highest loss, of HRK 1.8 billion.

(€1 = HRK 7.5)

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ZAGREB, 6 Oct, 2021 - The main Zagreb Stock Exchange (ZSE) indices increased on Wednesday, the Crobex by 0.03% to 2,033 points, its highest level since February 2020, and the Crobex10 by 0.01% to 1,245 points, its highest level since March 2017.

Regular turnover was HRK 13.5 million. Another HRK 4.5 million was generated in a block transaction with Atlantic Group stock at HRK 1,550 per share.

The most traded stock in regular trading was Valamar Riviera, turning over HRK 3.6 million. It closed at HRK 31.2 per share, down 0.95%.

Forty-nine stocks traded today - 20 gaining in price and 13 losing, while 16 were stable.

(€1 = HRK 7.486388)

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ZAGREB, 5 Oct, 2021 - The main Zagreb Stock Exchange (ZSE) indices closed mixed on Tuesday, with the Crobex gaining 0.26% to reach 2,032 points and the Crobex10 shedding 0.23% to end the day at 1,245 points.

Turnover at the close of the trading session was HRK 14.7 million, which is 10.9 million higher than on Monday, and as many as six stocks passed the turnover mark of one million kuna.

The stock of the Valamar Riviera hotel company turned over HRK 2.2 million, closing at HRK 31.5 per share, up 3.3%.

The Podravka food company followed with a turnover of HRK 1.9 million. The price of its share fell by 3.27% to HRK 650.

The Koka poultry processing company saw the price of its share jump by 6.72% to HRK 470, turning over HRK 1.82 million.

The Atlantska Plovidba shipping company turned over HRK 1.77 million, with the price of its share increasing by 3.0% to HRK 550.

Telecommunications equipment manufacturer Ericsson Nikola Tesla saw the price of its share drop by 0.29% to HRK 1,710, turning over HRK 1.5 million, while the HT telecommunications company turned over HRK 1.4 million, with the price of its share remaining unchanged at HRK 190.

A total of 41 stocks traded today, with 21 of them recording price increases, 11 registering price decreases and 9 stagnating in price.

(€1 = HRK 7.490910)

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September 29, 2021 - Gordan Maras' post-political life sees the former economy minister and MP going into private business.

Croats often discuss politics, whether on social media or in bars over coffee or something stronger. As such, one could say they love politics but despise politicians.

If you regularly read TCN's political section, you can see why. Numerous instances of corruption among political elites or an inadequate bureaucratic system are just the tip of the iceberg. Add-in politicians (for a year, most notably President Zoran Milanović and Prime minister Andrej Plenković) spending more time insulting each other than dealing with the many problems Croatian people have, and you can really understand the constant trash-talking about politicians that Croats almost constantly do.

Some Croatian politicians, such as the late Zagreb Mayor Milan Bandić, despite heavy criticism, remain in power till the end of their lives. In contrast, others, such as former Prime Minister Jadranka Kosor, eventually retire from politics (and then spend time writing for TCN, no less).

One such politician who recently said goodbye to politics is Gordan Maras.

Many Croatian media outlets, such as Dnevnik.hr reported on Maras's social media post that his 20-year-old long political career doesn't mean the end of his working days.

After briefly being unemployed, Gordan Maras came with a business plan and became an entrepreneur. More precisely, he will be a consultant for European Funds, as well as a project financing advisor. Basically, if you have an idea to start a business, but you don't know how to start it, Maras is now the guy to talk to.

''I feel full of energy, thirsty to work and aware that I have a fresh start in front of me and I'll do everything I can to use this opportunity,'' Maras said, as noted by Dnevnik.hr

In general, apart from receiving edgy humour and cynicism at your expense from the public, the end of a political career may not be so bad after all. If your political endeavor brought you to parliamentary level politics, you're in line to receive a parliamentary pension. As Mirovina.hr writes, a parliamentary pension is 10,077 kuna, allowing for a more than pleasant life.

''If an MP has held office for three consecutive years, in each term longer than half, he may retire with 15 years of service. His pension is 55 percent of his base salary (parliamentary net salary), increased by two percent per year of service,'' informs Mirovina.hr when stating the conditions you need to satisfy for a Croatian parliamentary pension.

Gordan Maras, having been an MP from 2007 and economy minister from 2011 to 2016, certainly has the right to this luxurious pension. Not to mention the fact that his last job was being the head of Zagreb's local SDP branch.

Maras stated how ''a parliamentary pension was never an option'' and despite corruption scandals he was allegedly involved in, that is a praiseworthy decision on his part. But the downside is that he still received state aid for his new private business adventure. Let's just hope he will pay his taxes.

Gordan Maras's career change is followed by the tensions in the Croatian Socialdemocratic party (SDP) after new party president Peđa Grbin removed Maras and three other (in)famous party members: Rajko Ostojić, Zvane Brumnić, and Nikša Vukas. As TCN reported, this decision caused an unbelievable tremble within SDP, the second biggest political force in all of Croatia.

Despite the current president Zoran Milanović (who is also the former prime minister and the head of the government which had Maras as a minister) starting his career in SDP, the party hasn't won any parliamentary elections since 2015. Grbin hoped to improve SDP's rating by removing those associated with ''less than top quality'' political work (or alleged criminal affairs) in the past from the party. He also believes these individuals are the result of less than satisfactory election results with Rijeka being the only big city an with SDP mayor.

With Maras now retired, new faces came to the parliament. From the green-left Možemo! Party (currently ruling Zagreb) or the Centre-party Fokus (who earned their name in handling Sveta Nedelja ) to conservative star Marin Miletić from the Most party. With new names for every political preference, there may be a glimmer of hope that these new names will work honorably and convince Croats that politicians aren't so bad after all. Who knows, maybe the millionth time's a charm?

Learn more about Croatian politics and history from the 1990s on our TC page.

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ZAGREB, 29 Sept, 2021 - The Zagreb Stock Exchange (ZSE) Crobex index on Wednesday decreased by 0.21% to 1,983 points, while the Crobex10 increased by 0.03% to 1,126 points.

Regular turnover was HRK 13.3 million.

Again, the most traded stock was the Podravka food company, which turned over more than HRK 4 million, closing at a record-high HRK 636 per share, up 1.3%.

Podravka has been recording an increase in turnover for three weeks, during which time its shares have mainly been bought by the Pivac meat industry, which holds 3.18% of Podravka's equity.

Forty-four stocks traded today, with 12 increasing in price and 20 decreasing, while 12 were stable.

(€1 = HRK 7.489688)

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ZAGREB, 29 Sept, 2021 - Expectations for Croatia's economy in September 2021 came close to the pre-pandemic level, supported by confidence in services and retail trade, while consumer confidence was down, a European Commission report said on Wednesday.

In September 2021, the Economic Sentiment Indicator (ESI) in Croatia went up 0.7 points on the month to 112.7, its highest level since February 2020, just before the pandemic broke out, when it was  at 113 points.

Services and retail trade confidence saw the highest increases, by 3.3 and 3 points, respectively, while industry confidence increased by 0.4 points.

Construction confidence decreased by 0.8 points and consumer confidence by 1.6.

Business leaders said they planned to intensify hiring in the coming period, resulting in a 0.9 point increase of the Employment Expectations Indicator (EEI) to 111.5, a record high since 2019.

Optimistic European consumers

In September 2021, the ESI remained unchanged in the EU (at 116.6) and broadly stable in the euro area (+0.2 points to 117.8).

Construction confidence went up by 1.8 points in the EU and by 2 points in the euro area, while consumer confidence went up by 1.1 points in the EU and by 1.3 in the euro area.

Industry confidence remained unchanged in the EU and marginally improved in the euro area.

Retail trade confidence decreased by 2.8 points in the EU and by 3.3 in the euro area, while services confidence decreased by 1.4 points in the EU and by 1.7 in the euro area.

The EEI increased further (+1.0 point to 113.6 in the EU and +0.8 points to 113.6 in the euro area).

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ZAGREB, 28 Sept, 2021 - The main Zagreb Stock Exchange (ZSE) indices went up on Tuesday, the Crobex by 0.43% to 1,987 points and the Crobex10 by 0.47% to 1,216 points, while regular turnover was HRK 11.5 million.

The most traded stock was the Podravka food company, turning over HRK 2.55 million. It closed at HRK 628 per share, up 1.95%.

Forty-one stocks traded today, with 19 going up in price and ten going down, while 12 were stable.

(€1 = HRK 7.491414)

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September the 23rd, 2021 - A scandal involving a Croatian businessman and Turkey has caused international scandal and seen powerful politicians from both countries apparently discuss it.

As RTL/Silvana Mendjusic writes, the construction of the first geothermal power plant in Ciglena near Bjelovar in a project worth more than 300 million kuna, and it was started together, and the Turkish investor, the majority owner, cut the ribbon in the company of Minister Tomislav Coric. Production at Geoen began, and huge sums of money and generous support began to flow into an account.

Over a period of twelve years, they were supposed to earn more than a billion, and then it all got complicated. The minority owner, Croatian businessman and entrepreneur Dragan Jurilj, allegedly set out to get the Turks kicked out of the story and has so far succeeded. While he claims that everything is being carried out according to the law, the Turks claim that their investment was stolen from them. They're threatening arbitration, warning that in the end everything will be paid for by Croatian citizens, and they have even called on Erdogan for help.

On the sidelines of the summit in Antalya, Croatian Prime Minister Andrej Plenkovic and Turkish President Erdogan talked about illegal migration, Bosnia and Herzegovina, economic cooperation, but also one concrete and currently very ''hot'' case involving this Croatian businessman.

"We've been informed that our President Erdogan mentioned the case to the Croatian Prime Minister," said lawyer Ozlem Canbeldek Akin.

According to the legal representative of the Turkish company BLT, who claims that their Croatian partner stole a project worth more than a billion kuna from, the stakes are high, and they're equally nervous on both sides.

"How they did not have a fair trial!? All of these processes are legitimate and every investor in the Republic of Croatia is obliged to respect final court decisions, whether they're satisfied with the outcome or not. I'm not satisfied with all these verdicts," said Dragan Jurilj.

The dispute, which has now risen to quite a high political level, is one taking place much lower down, a few thousand metres below the surface in fact, deep in the geothermal treasures of Croatia in which these former partners are arguing over the ownership of the Velika geothermal power plant near Bjelovar. The Turks claim: "We've invested about 300 million kuna in this, that's roughly 55 to 60 million euros. We have invested a lot, and now we've been left with nothing."

At the beginning of this saga, which is all to do with the ownership ratio within Geoen - the project holder was 80 percent for the Turkish company, and 20 percent for the Croatian businessman and their partner, Dragan Jurilj.

"I gave the company 157 million in appraised assets - four wells, permits, a power purchase agreement, concessions... I didn't indebt the company, I gave the company 157 million. They were supposed to give 300 million to give and not borrow based on my assets. They they just took out loans and indebted the company,'' said Jurilj.

''Why didn't you take out a loan yourself?'' Jurilj is asked.

- Well, OK.

''You had no references at the time...''

- That's right. I didn’t have any references at the time, but for references you get a commission or some smaller percentage, you don’t get 80 percent.

''Okay, did you agree to it?''

- I didn't agree to anything. They were supposed to convert that loan after the completion of the project, they were one hundred percent indebted to the company, and they were supposed to convert it into capital reserves. They didn't do that.

Two years ago, the geothermal power plant was inaugurated. According to the agreement, the financing is on the side of BLT. And we've met those requirements. BLT has provided the capital and a loan," he said.

Along with Muharem Balat, the owner of the Turkish company, Minister Coric openly praised the project. He will now be asked to rule on the administrative proceedings.

"Our investment was stolen from our shareholders, we want compensation from those shareholders. But if we fail in that, then we'll have to go to the European Court of Human Rights and we'll seek arbitration and compensation which will then end up being the burden of Croatian taxpayers which we wouldn't have wanted… "

The foundation of any such move, he says, will be the thesis that they didn't have the right to a fair trial in Croatia.

"There's no arbitration, so Croatia can't be responsible for inter-member relations, the Republic of Croatia can only be responsible if it harms the project, if the project stops functioning for any reason ...", said Dragan Jurilj.

When operating, the geothermal power plant produces electricity for about 29,000 households in total. The power plant is a privileged producer of energy, as it produces electricity from renewable sources, it is then sold on at a discounted price. This directly regards about one billion and 200 million kuna of revenue annually, if not more.

Last year’s amount alone is enough to understand why these ex-partners are fighting so hard for ownership, as back in 2020, they produced 76.2 gigawatt hours of electricity and 120 million kuna without VAT was paid. The market value of energy was 21 million kuna and the amount of aid paid out was 99 million kuna. This generous relationship between the market and the preferential price is the greatest thing this plant can boast of.

It all started last year, say the more than disgruntled Turkish partners. Jurilj then sent an envelope to Turkey marked as an invitation to the Assembly of the Society. But it wasn't an invitation to the Assembly, but some unimportant documentation. Invitations to the assembly don't need to be notarised. If you register an envelope in the post office as an invitation to the Assembly - it is classed as an invitation. So, he registered it and at the session of the Assembly in our absence he changed the management. According to our agreement, our members must be on the board. They kicked us out of that session.

How the deception of the Turks began, according to them...

"I sent an invitation to the Assembly based on the Companies Act, I haven't engaged in anything illegal. I've invited them to the Assembly several times. If they don't respond the first and the second time, I have the right to legitimately make decisions," Jurilj added.

That's illegitimate, claimed the Turks. They then filed a complaint and the measure was temporarily suspended in the Commercial Court. Jurilj was then asked not to send the invitation to Turkey but instead to their Zagreb branch. Unfortunately, another invitation to Turkey was sent, this time it really was an invitation for the Assembly, but when the Turks received it, because it takes some time for the shipment to reach Turkey, they claim that the Assembly had already been held.

"I did everything according to the law, if something was late, then that's not my fault, and they ignored my invitation to the Assembly for a couple of years," claims Jurilj.

They say they asked you to send it to the office in Zagreb.

"It's not written in the law, it says it's sent to the address of the centre. I sent them that invitation."

Doesn’t it feel like you wanted them not to come?

"I did everything according to the law."

Jurilj and his new partner Goran Pavlovic convened a new assembly, they called upon Turkish board members, and then Jurilj demanded that the Commercial Court in Zagreb, due to non-fulfillment of the partnership agreement, register the deletion of the Turkish company BLT from the project.

"Unfortunately, at the Assembly held without our presence, they made a decision that BLT must pay additional performance to Geoen," the lawyer added.

BLT reacted by submitting to the Commercial Court the measure according to which the exclusion of BLT could not be carried out. Unfortunately, at the Assembly held without our presence, they made a decision that BLT must pay additional payments to Geoen.

The Turks claim that in one year, Dragan Jurilj withdrew more than 80 million kuna...

The Turks have had the most objections to the court register. The response we received from the Commercial Court was: "Oh, we checked the court register and you aren't co-owners, plus there is no more Geoen and we have to suspend the proceedings."

They are directly accusing Jurilj of ''extracting'' more than 80 million kuna from the company since the summer of 2020.

"That isn't true, and secondly, BLT has expressed disloyal behavior, disrespect and made threats of lawsuits against banks, and threats to institutions that have succumbed to its influence ...", the Croatian businessman said, and the Turkish investors are now filing criminal charges for fictitious debentures.

"They managed to extract eight million euros paid by HROTE (Croatian energy market operator)," the lawyer added.

"At the same time, the bank isn't allowing me to dissolve the company's account, although I'm the director, the authorised person and the sole owner.'' said Jurilj.

What has HROTE got to do with it all?

What's going on now? The power plant is still working. In the first eight months, the power plant produced electricity worth 25 million on the market. There have been incentives worth 49 million. But those 75 million HROTE - the market operator with which the energy purchase agreement was signed - are no longer being given to anyone.

HROTE proposed to the court the establishment of a court deposit in which they would pay the funds. The court refused to establish a deposit, HROTE appealed and the appeal proceedings are ongoing. Dragan Jurilj, on the other hand, accuses HROTE of paying 25 million kuna to Geoen into a foreign account.

"I went to the bank on behalf of Geoen, and the order wasn't accepted. They came to HROTE to transfer my money abroad, HROTE isn't even the director of the company, it was reported to the institutions which deal with this, and that Turkish bank has been as well,'' said Jurilj.

HROTE replied that their actions were supported by appropriate court decisions and that Jurilj's allegation was unfounded.

If HROTE doesn't pay you, do you not have a contract stating how you'll perform your obligations to the workers?

“According to the workers we're dealing with, we have issues with the difficulty of paying the tax debt according to the budget because it is a debt from 2020 while BLT ran the project and while they were taking money from the project,” claims Dragan Jurilj.

DORH (State's Attorney Office of the Republic of Croatia) has been informed of the situation

We informed the DORH in a timely manner about the legal situation regarding Geoen, as well as about our actions. Given the many ongoing court proceedings, we don't wish to go further into commenting on the statements made by the opposing parties.

"They're ignoring the opinions of the law. They haven't yet transferred the energy purchase agreement and are putting the entire plant into question, and then it will only continue to harm BLT and me as a creditor member, and the state budget."

The chronology of court decisions shows that the Commercial Court in Zagreb and the court register acted faster in favour of Croatian businessman Dragan Jurilj, and slowly when decisions had to be made, they leaned more in favour of BLT.

"We were first deleted from the court register, we lost our stakes, and while we were fighting for those stakes, Geoen was attached to GS, and the economic entity was transferred to another Eco Consult entity."

They pointed out that they haven't so far been allowed to prove their claims in court.

"We have nothing to lose, I'm being honest, I know these are serious accusations being made against the judges. I wouldn't want to go that far, but when I look at the case, there are things I can't understand, some things can't be legally explained." the Turks claim.

"BLT constantly keeps going to all these institutions and claiming to have been damaged, that they're going sue the state, but they can't sue the state. They do have the right to demand compensation for those shares and they'll have them paid. Nobody is trying to run away from that fact," assured Jurilj.

In this dispute, both parties filed several criminal charges, the State Attorney's Office was informed in the meantime. Jurilj, on the other hand, is exploring a new geothermal field - Slatina dva, which is twice as strong as the power plant near Bjelovar, and there is a much bigger investment to be had in Slatina.

The Ministry of Economy failed to respond to our request. Although the representatives of the Turkish side claim: None of Jurilj's companies still has a legal basis for the exploitation of geothermal waters. They explained that the rights from the license can be transferred to another economic entity only if the Government, at the proposal of the Ministry, gives explicit prior written consent. However, Minister Tomislav Coric is not making any sort of move as far as this is concerned - yet.

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