ZAGREB, 19 March, 2021 - Croatia will enter the euro area on 1 January 2023 at the earliest, and introducing the euro has a number of advantages but for those advantages to be greater the economy needs to be more flexible, including with regard to the labour market, a conference heard on Friday.

The conference, focusing on the introduction of the euro as the official currency in Croatia, was organised by the students' association Financial Club.

Croatian National Bank (HNB) Governor Boris Vujčić said in his opening remarks that Croatia cannot enter the euro zone before 1 January 2023.

"Whether Croatia will enter the euro area on 1 January 2023 or a year or two later, depends on when it will meet the nominal convergence criteria," said Vujčić, recalling that in July 2020, Croatia entered the European Exchange Rate Mechanism II (ERM II), a sort of waiting room for the euro.

He explained that the ERM II envisaged a minimum two years of participation in it so that a candidate aspiring to join the euro area can meet the nominal convergence criteria (Maastricht criteria). On the other hand, if it does not satisfy the criteria, which refer to the stability of the exchange rate, prices and interest rates, the budget deficit and the level of foreign debt, a country can remain in the ERM II indefinitely, Vujčić said.

He recalled a survey indicating that citizens fear that with the introduction of the euro the standard of living will deteriorate and prices will increase. However, surveys in countries that have already introduced the euro indicate that prices increased by 0.23 percentage points on average in the year when the euro was introduced, mostly for everyday goods such as coffee. Prices of such products are relatively lower so their increase could have been relatively high due to rounding off.

"That left the impression in public that prices increased more than they did," explained Vujčić, underscoring that the standard of living did not fall in any country that introduced the euro but rather it improved.

Ćorić: Biggest advantage to companies exporting to euro area

Minister of Economy and Sustainable Development Tomislav Ćorić said that it was clear that citizens would not start living better on the first day of introducing the euro, however, what points to better prospects was the fact that the macro environment in the euro area was free of risks that non-member countries were faced with.

The risk premium in all countries that entered the euro area has dropped, said Ćorić, noting that that was something that in normal circumstances should  bring benefits to Croatia, such as reducing yields on long-term security instruments and lower interest rates on commercial and consumer loans.

Considering, however, that we live in "fairly radical economic times," and a period of very low interest rates, the effects which countries that entered the euro area some ten years ago had would be somewhat lower, however, they would still be significant, he said.

The advantages are potentially biggest for export-oriented companies considering that the exchange rate risk will be eliminated, he said.

Ćorić said that the project for euro introduction was not an end in itself but was primarily a very good tool for Croatia's long-term economic growth and development.

Mačkić: Flexibility of labour market, final goods and services market

President Zoran Milanovic's economic adviser, Velibor Mačkić, conveyed the president's message saying that it was necessary to discuss the benefits and potential harm of Croatia joining the euro area.

Mačkić believes that Croatia has not developed its own institutions sufficiently and that that poses a problem. "The country needs a different economy, a much more flexible economy, to be able to benefit more significantly from the monetary union," said Mačkić.

He added that the labour market and the market of final products and services need to be more flexible.

Mačkić underlined the importance of an efficient fiscal policy and of the reform of the tax system which Mačkić believes needs to change from "a consumption-based to income-based tax system."

For more about business in Croatia, follow TCN's dedicated page.

ZAGREB, 17 March, 2021 - The main Zagreb Stock Exchange indices slipped on Wednesday by about 0.7%, falling for the second straight day amid a poor trading day of just over HRK 3 million.

The Crobex fell by 0.73% to 1,863 points and the Crobex10 fell by 0.68% to 1,172 points. Both indices dropped for the second day running.

All sector indices dropped too with the construction index falling the most by 5.93%. 

Regular turnover was a mere HRK 3.3 million or 2.2 million less than a day earlier.

Not one stock crossed the million kuna mark.

The highest turnover of HRK 676,000 was generated by the HT telecommunications company with the price of its shares plunging by 1.79% to close at HRK 192.50.

(€1 = HRK 7.6)

For more about business in Croatia, follow TCN's dedicated page.

ZAGREB, 17 March, 2021 - Representatives of the PPDIV agriculture union on Wednesday met with Rovinj Mayor Marko Paliaga, saying afterwards that the story of the future of the Rovinj Tobacco Factory (TDR) "ended well and British American Tobacco (BAT) stays in Croatia."

Paliaga thanked the unionists for fighting for TDR workers, the City of Rovinj said in a press release.

The Kanfanar-based TDR is owned by British American Tobacco.

The unionists thanked the mayor for the cooperation and support in negotiations with BAT on keeping the plant in Kanfanar, following announcements last year that it might be shut down.

The workers need not fear for their future any longer because TDR is staying in Kanfanar, the press release said.

PPDIV president Denis Paradiš said TDR's staying in Croatia was important for Rovinj, Istria County as well as for the Slavonia region and tobacco growers. "It's important for all of Croatia."

BAT took over TDR from Adris Group in September 2015 for €505 million. Under the contract, BAT was to keep production in Kanfanar for at least five years.

Last year media reported that BAT was considering to leave Croatia due to deteriorated business conditions. In December, Prime Minister Andrej Plenković said the government's negotiations with BAT were going well and that he would do everything for BAT to keep production in Istria.

For more about business in Croatia, follow TCN's dedicated page.

ZAGREB, 16 March, 2021 - The European Commission on Tuesday disbursed €9 billion to seven EU member states, including €510 million to Croatia, in the fifth instalment of financial support to preserve employment during the coronavirus pandemic under the SURE instrument.

This is the second instalment this year. Czechia has received €1 billion, Spain €2.87 billion, Italy €3.87 billion, Lithuania €302 million, Malta €123 million and Slovakia €330 million.

So far, 16 member states have received a total of €62.5 billion under the SURE instrument in loans which the Commission is taking out on financial markets at the best terms.

Croatia received the first instalment of €510 million on 17 November.

For more about business in Croatia, follow TCN's dedicated page.

ZAGREB, 16 March, 2021 - The Croatian Chamber of Trades and Crafts (HOK) on Tuesday said that the National Recovery and Resilience Plan should include trades and crafts.

HOK said that a survey of 1,722 HOK members indicates a huge interest in EU grants.

Most of them (85%) consider investing in tangible and non-tangible assets to be the most important, notably purchasing equipment and machinery, and upgrading and building new production capacities.

The estimated value of projects that would be submitted by the majority of trades ranges from HRK 150,000 to 750,000, HOK said, adding that trades are willing to invest their own funds too.

HOK in particular noted that more than 73% of trades do not plan to use financial instruments in the coming period.

HOK is investing significant effort in preparing programme documentation for the 2021-2027 EU financial period.

The aim is to raise awareness of the needs of trades and that adequate calls for applications for grants are ensured.

HOK said that the needs of trades should be recognised through the National Recovery and Resilience Plan due to the consequences of the COVID pandemic and the negative economic trends. Hence HOK has sent its recommendations to Prime Minister Andrej Plenković in an effort to find the best possible solution for trades.

For more about business in Croatia, follow TCN's dedicated page.

ZAGREB, 12 March, 2021 - Labour Minister Josip Aladrović and deputy director of the National Foundation for Civil Society Development Luka Bogdan presented eight contracts in Zadar on Friday worth nearly HRK 10 million for projects to strengthen the capacities of old and new social enterprises and entrepreneurs.

"Today, we signed contracts with entities that are just starting and that are developing their business in accordance with principles of social entrepreneurship," said Labour, Pension System, Family and Social Policy Minister Josip Aladrović, noting that the ministry has provided over HRK 112 million to encourage social entrepreneurship.

The pandemic and crisis have created an opportunity for doing some things better and fairer, he said.

I believe that we can find a way in our business to regain a positive social impact. There are four counties among the co-signers: Zadar, Šibenik-Knin, Split-Dalmatia and Lika-Senj counties. All forms of entrepreneurship in these areas are more important than ever before, mostly due to the impact the pandemic has had on the tourism sector and all related activities, Minister Aladrović said, adding that by signing the projects they want to strengthen the capacities of old and new social enterprises through additional employment and education.

Deputy director of the National Foundation for Civil Society Development Luka Bogdan  said that social entrepreneurship was one of the models connecting solidarity and entrepreneurship that could be seen every day, not just in a crisis.

The purpose of the projects is to employ members of vulnerable groups -- women, Croatian war veterans and victims of the Homeland War, people with disabilities and others, and this will include creating new jobs and improving the knowledge and skills of employees through specialised forms of training and employment.

Before presenting the contracts cofinanced by the European Social Fund, Minister Aladrović and his associates had a working meeting with representatives of the City of Zadar on increasing capacities of retirement homes.

According to state secretary Marija Pletikosa, it is estimated that about 5% of the population aged over 65 needs accommodation in a retirement home, and Zadar has not yet reached the capacity to accommodate 3%, so it is necessary to build new retirement homes.

Aladrović said that he supported the idea because increasing the number of accommodation units for the elderly population across Croatia was one the priorities of his ministry.

For more about business in Croatia, follow TCN's dedicated page.

ZAGREB, 12 March, 2021 - Croatia's industrial producer prices fell by 0.8% in February 2021 compared with the same month in 2020, while increasing by 1.4% from January 2021, according to the data from the National Bureau of Statistics (DZS).

The annual downward trend has been present since March 2020 when industrial producer prices dropped by 2.7% compared with March 2019. The 0.8% decrease in February 2021 is the lowest in the last 11 months, while the highest annual decline was recorded in May 2020, of 6.6%.

In February 2021, compared with January 2021, industrial producer prices rose by 1.3% on foreign markets, while compared with February 2020 they declined by 2.1%. On the domestic market, they increased by 1.4% compared with January 2021 and by 0.2% compared with February 2020.

Month on month, prices of energy grew the most, by 5.1%, followed by intermediate goods (+0.7%), capital goods (+0.2%), non-durable consumer goods (+0.1%) and durable consumer goods (+0.1%).

Year on year, industrial producer prices rose by 1.2% for capital goods, by 1.1% for intermediate goods and by 0.4% for durable consumer goods, while decreasing by 4.9% for energy and by 0.3% for non-durable consumer goods.

For more about business in Croatia, follow TCN's dedicated page.

ZAGREB, 11 March, 2021 - After a slight drop on Wednesday, the Zagreb Stock Exchange (ZSE) Crobex index rebounded on Thursday, increasing by 0.12% to 1,864.90 points, while the Crobex10 continued its upward movement for the fourth day in a row, closing up 0.25% at 1,166.04 points.

Turnover at the close of the trading session reached HRK 7.3 million, about 2 million less than on Wednesday.

The highest turnover, of HRK 2.25 million, was generated by the stock of the HT telecommunications company. It closed at HRK 192 per share, up 2.13%, its highest price since June 2013 when it closed at slightly over HRK 200 per share.

The only other stock to pass the turnover mark of one million kuna was plastic car parts manufacturer AD Plastik, turning over HRK 1.2 million. It ended the day at HRK 185.50 per share, up 0.27%.

A total of 44 stocks traded today, with 18 of them recording share price increases, eight registering price decreases and 18 stagnating in price.

(€1 = HRK 7.582776)

For more about business in Croatia, follow TCN's dedicated page.

November 4, 2020 – The best economic examples in Croatia will be awarded in early December, which will be decided by an expert jury, but also by the general public.

As Večernji list/Stela Lechpammer reports, one of the main reasons why Večernji list and Poslovni Dnevnik launched the selection of Businessman of the Year and Economic Event of the Year four years ago is to divert attention from negativity and trivia to positive and successful stories from the economy.

Due to the coronavirus pandemic, this is even more important now, and this autumn the manifestation continues. The expert jury and readers will select new, and perhaps some already known companies, names, and events that marked the Croatian economy this year.

Despite the often negative and uninspiring political and social environment, Večernji list and Poslovni Dnevnik have recognized Croatian businessmen as promoters of excellence, innovation, and successful business ventures. By highlighting positive examples such as business excellence, export success, the opening of new plants, and thus jobs, they want to open a new perspective on life in Croatia.

"Economic successes are an incentive for many small and medium-sized enterprises and a message to young people not to leave Croatia, which has been a particularly painful topic for several years now," said the organizers.

The winners will be decided by the general public and an expert jury composed of leading Croatian journalists and editors who cover the economy, as well as the professionals and scientists. The winners will be awarded in early December in four categories.

"The selection of businessmen and the economic event of the year is of great importance, and at the same time, it is very important that the selection is carried out according to objective criteria and that the recognition goes into the right hands. We need to look at the placement and quality of products, indebtedness," says a well-known Croatian entrepreneur and one of the richest Croats, Branko Roglić.

Based on objective criteria, the expert jury will select the businessman of the year, and the criteria are business excellence, above-average business results, a successful investment project, job creation, and export success. On the other hand, readers will make decisions based on the reputation that each company and entrepreneur have in public.

"The popularization of entrepreneurship in Croatia is very important and that is why this is an important event. Most entrepreneurs in Croatia are very hard-working people who run the economy and take care of their employees, but often the public has a wrong image, both because of the past and because there are always exceptions in every business that ruins the reputation. I would like, when someone in Croatia mentions an entrepreneur, to think of a team from Infinum, Nanobit, Infobip," said the two-time winner of this competition Mate Rimac.

Among the winners in recent years were Ante Vlahović from the Adris group, Željko Kukurin from the tourist company Valamar, and Marin Pucar, the leader of Podravka.

To read more about business in Croatia, follow TCN's dedicated page.

When it comes to Croatian companies, there tends to be an enormous amounts of excellent ideas and promising businesses but the state tends to put up too much red tape for them to succeed. Croatia doesn't provide a business friendly atmosphere, nor does it handle investments well, and as for entrepreneurs, they often feel that their only hope is to leave. Infobip from Vodnjan, however, isn't one of them.

We've written extensively about Infobip and how this company has beaten the odds and managed to grow to proportions I imagine not even its founder, Silvio Kutic, could have imagined. This Croatian company has only gone from strength to strength and it seems that that trend isn't about to alter anytime soon.

As Novac writes on the 22nd of January, 2020, the Vodnjan-based IT giant, Infobip, is planning to hire about a thousand new employees, expanding further globally after reaching the impressive figure of 3,000 employees, and ending last year with 2,100 employees.

In addition, by the end of this year, the company expects the completion of the city campuses in Sveta Klara in Zagreb, which should accommodate as many as 650 Infobip employees.

According to a report from Lider.hr, Infobip also announced its plans for placement on the world famous New York Stock Exchange, further development of technological solutions and products in the direction of ''conversational messages'' and ''conversational commerce'', and they just launched their own ''chatbot'' platform, which took six months to develop in total.

Infobip's production will soon be offered to customers who will be able to create ''chatbots'' on our platforms. We aim to get feedback so they can leverage the products, which is in line with our customer-centric strategy. In 2020 we will continue to focus on artificial intelligence and its implementation in our decisions,'' said Tomislav Smiljanić, senior product manager at Infobip.

Make sure to follow our dedicated business and Made in Croatia pages for much more on Croatian companies, products and services.