May 10, 2023 - Vice president of the Government and Minister of Spatial Planning, Construction, and State Property Branko Bacic stated on Wednesday, in the context of the dynamics of reconstruction after the earthquake and the use of EU funds, that another 140 million euros should be used in the next 50 days.

"The deadline for using the funds for the Zagreb and Petrinja earthquake reconstruction is practically the same, so by June 30, we have to use the funds in the total amount of one billion and three million euros. As of today, we have reached 863 million euros, so there are still 140 million euros left to use in the next 50 days," Bačić said on Croatian Radio's show A, sada Vlada.

Problems caused by inadequate laws

He assumes, as he said, that at this pace the EU funds could be used even before the deadline. "In the less than four months that I have been at the head of the Ministry, we have achieved a dynamic in which we realize projects on a daily level of around 4.5 million euros. Tomorrow or the day after tomorrow, we will use the full amount from the Reconstruction Fund for the Petrinja earthquake," he predicts.

Bačić also listed the problems his ministry is facing due to inadequate laws.

"What I have witnessed in the past four months is that in Zagreb, in the Ministry or the Government, we spend time deciding on managing small parcels worth around 1,000-2,000 euros, which are necessary to realize a project. There are many situations in which it is unnecessary that the center of Zagreb decides on parcels in the area of, for example, Dubrovnik-Neretva County," he points out.

"We inherited 50,000 pending cases"

In this sense, he says, he announced the draft of the new law on real estate management. "As a ministry, we are not sufficiently educated to manage the financial assets of the Republic of Croatia. We are primarily architects, engineers, and surveyors. Therefore, we have shared financial management with the Ministry of Finance," he continued.

He added that many unresolved cases are hindering the economic growth of the Republic of Croatia. "In the Ministry, we inherited 50,000 unresolved cases. That number is a terrible brake on the economic development of the Republic of Croatia. It is important that it works and permeates," he asserted.

For more, make sure to check out our dedicated News section.

ZAGREB, 31 March 2022 - Croatia has surpassed nine EU member states in terms of EU funds absorbed since 2020 and now ranks 19th, the Regional Development and EU Funds Ministry said on Thursday.

According to Cohesion Data, the European Commission platform on finances and achievements under the European Structural and Investment Funds 2014-2020, in 2020 Croatia ranked 27th among the EU's then 28 countries in terms of payments.

Croatia is better at absorbing funds than Spain, Italy, Slovakia, Romania, Belgium, Denmark, Luxembourg and Austria. Lithuania has absorbed the most EU funds.

In the 2014-20 period, Croatia had €10.73 billion from ESIF at its disposal. By 24 March 2022, projects worth €13.4 billion were contracted, or 124.91% of the allocation, above the EU average of 113%.

Of that amount, €7.32 billion was paid and €6.03 billion was verified, 68.17% and 56.17% of the allocation, respectively. The EU payments average is 63%.

If €763.17 million from REACT EU and €597.56 million added to the Rural Development Programme are added to the original allocation, the total allocation by 2023 amounts to €12.09 billion.

Between 2013 and 24 March 2022, Croatia received from the EU budget HRK 49.06 billion more than it paid into it. When the advance paid for the National Recovery and Resilience Plan is included, Croatia is HRK 55.19 billion in the black, the ministry said.

Politics: For more, check out our politics section.

28 March 2022 - The European Commission on Monday approved Croatia's €7.5 million state aid scheme for the maritime sector, transport and transport infrastructure affected by the COVID-19 pandemic.

The state aid will be used to cover fixed costs incurred from March 2020 to June 2020.

Enterprises that suffered at least a 30 percent decline in their revenue in this period compared to the corresponding period in 2019 are eligible to this aid.

The maximum amount of aid is HRK 12 million, and the aid should be approved by no later than 30 June 2022.

The temporary framework for state aid was adopted on 19 March 2020 at the start of the pandemic when the enterprise sector faced difficulties due to a lockdown.

September 14, 2021 - The first Croatian STED microscope purchased and owned by the Ruđer Bošković Institute (IRB) in Zagreb offers new opportunities for Croatian scientists and researchers.

The super-resolution microscope (STED) worth 4.5 million kuna has become a new edition to the selection of delicate but useful equipment the Ruđer Bošković Institute (IRB) uses to tackle the hottest questions faced by modern science.

As IRB reported in its press release, the microscope made its way to Iva Tolić's lab with thanks to the European Union funds.

"Stimulated Emission Depletion microscopy (STED) is a super-resolution technic of fluorescent microscopy and one of the methods of overcoming the limitations of visible light microscopes in observing matter structures of incredibly small sizes. German physicist Stefan W Hell received the Nobel Prize for developing STED in 2014,'' informed IRB in its press release. It also stated this is the first microscope of its kind in all of Croatia.

''With the help of this STED microscope, we can see three times the amount of small structures in a cell than we could before with the standard microscopes. We'll use them for observing cell division, more precisely for chromosome division. When it comes to division, it's very important that the chromosomes are well-connected microtubules, which are protein pipes that tie chromosomes and pull them onto separate parts of the cell. With this type of microscopy, we'll be able to determine how microtubules are connected to chromosomes in various phases of spindle formation, which is still a mystery,'' explains Iva Tolić.

As TCN previously reported, Iva Tolić's team already made a significant contribution to cell biology and spindle research when their work led them to new information on microtubule-sliding.

In addition, back in 2014, the then-president of Croatia Ivo Josipović awarded her the Order of the Croatian Danica (the medal which boasts an image of a famous scientist, Ruđer Bošković) for her particular contribution to the promotion of science in Croatia and abroad.

''Tolić earned her international reputation due to her research into complex cellular processes. Namely, not so long ago, in cooperation with her colleagues from the Max Planck Institute, Tolić discovered the first potentially immortal organism – a special kind of yeast, which was isolated from African beer. This type of yeast is very special because it rejuvenates every time it reproduces. In the case of most other yeasts, the mother cell creates a young daughter cell while it ages and eventually dies. Contrary to that, the mother cell of this yeast splits into two equal daughter cells, which remain young throughout their divisions,'' wrote IRB on its website at the time of the ceremony.

With Tolić's international reputation and well-established name, as well as scientific findings found by other scientists at IRB, it is understandable that European Union funds supported the further development of IRB's equipment.

''The outstanding power of STED microscopy allows researchers to discover complicated processes in cell structures. These understandings are the basis for further research on how specific medications, chemical compounds or bacteria and viruses affect processes in a live cell,'' concluded IRB's press release.

Learn more about Croatian inventions and discoveries from Tesla to Rimac on our dedicated TC page.

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

July the 22nd, 2021 - An additional 580 million euros has been approved by the European Commission (EC) for use by the Republic of Croatia as part of the wider REACT-EU initiative.

As Novac/Iva Badanjak writes, the European Commission has approved an additional 580 million euros for use by Croatia to preserve jobs during the ongoing pandemic and after two major earthquakes during the spring and winter of 2020 (in Zagreb and Sisak-Moslavina) that had a serious impact on the Croatian economy.

The funds have been sourced from the operational programme of the European Social Fund (ESF) within the REACT-EU initiative.

This additional financial support is aimed at supporting the resilience of the Croatian labour market, employment, small and medium-sized enterprises and low-income families, as well as building a sustainable foundation for the green and digital transition and a sustainable form of socio-economic recovery.

The funds from this new programme will be used for job preservation programmes for about 280,000 people in sectors disproportionately affected by the coronavirus crisis, such as the tourism sector, the health sector and the food production sector.

Belgium will also receive three million euros from the same fund and for a similar purpose, and Germany will get 48.5 million euros.

The European Parliament and individual EU member states reached an agreement on the REACT-EU initiative and fund back in November 2020, and MEPs and the Council approved the content of the agreement in plenary in December.

It is a package worth as much as 47.5 billion euros (50.5 billion euros in current prices) that will be distributed to the bloc's member states over the next two years. Resources will be available through the EU Structural Funds, with 37.5 billion euros allocated for 2021 and 10 billion euros for 2022. The funds are being made available to member states in full.

MEPs have called for countries to be allowed to use additional funds until the end of 2023, instead of 2022, which was the European Commission's proposal. These resources will be allocated to countries in accordance with the partnership principle, including local and regional authorities, as well as relevant bodies representing civil society and the social partners.

Co-rapporteur Andrey Novakov (EPP) said that the REACT-EU initiative was a textbook example of cohesion policy as part of recovery immediately after the agreement was reached, and before the legal texts were approved by the Council and the European Parliament in plenary.

"2020 was a year of interruption, but also a year of recovery, companies and the healthcare sector have all been hit hard and this funding will bring a breath of fresh air to them. We hope the Council will overcome its internal divisions to allow the flow of these recovery funds across EU.''

MEPs also insisted that a stronger focus being placed on the people most affected by the coronavirus crisis, including but not limited to various cross-border projects. Social Democrat co-rapporteur Constanze Krehl added that she was glad that member states had agreed with MEPs' view that the REACT-EU initiative must focus on the social consequences of the pandemic, as well as on the regions and people most affected by this continuing crisis.

"This includes cross-border projects and support for the most vulnerable people and young people. All spending must respect the goals of sustainable development, as well as the Paris Climate Agreement - that should be self-evident, but it is good to remind member states of these commitments," Krehl said at the time.

Two Croatian members of parliament, Tomislav Sokol and Karlo Ressler, also took part in drafting the package for repairing the damage caused by the crisis, advocating that funds be allocated primarily to the least developed EU member states.

For more on Croatian and EU politics, follow our dedicated section.

May 26, 2021 - With Energy Institute Hrvoje Požar (EIHP) being the lead partner, the REPLACE Project from Horizon Europe steadily continues the progress of renewable energy for the Kvarner region.

Earlier in January, TCN wrote about Croatian energy development, whose goal is to be based on clean technologies. And that it's not all empty talk, as shown by the third meeting of a local workgroup enrolled in the REPLACE Project. As Energy Institute Hrvoje Požar (EIHP) reports on its website, the REPLACE Project has a goal of supporting European energetic, climate, environmental, economic, and social goals with the deadline until 2030 and 2050.

As part of the OBZOR 2020 (Horizon Europe) EU program for research and innovations in the 2014-2020 time frame, the REPLACE Project receives EU funding. Twelve partners from nine countries participate in the project, and EIHP is in charge of the project activities in Primorska-Goranska county. In support of European goals, the plan of REPLACE Project is to gradually switch the current ineffective and outdated heating and cooling systems with new efficient systems which rely on renewable energy.

The meeting held at the Faculty of Economics at the University of Rijeka saw Dražen Balić, Antonia Tomas Stanković, and Lea Leopoldović from EIHP hold lectures presenting results of the first period of the project, but also the plans for future activities. The accent was put on implementing campaigns and collective actions supported by the members of the local workgroup. Energetic poverty, gender aspects, and „lock-in effect“ (an economic practice, where a company makes it extremely hard for their customers to leave them, even if the customer wants to) are the obstacles the project runners are aware of and were explained in greater detail. Another thing that stood out in the presentation was the presentation „Technology of Blue Energy in Croatia“, which presented modern technologies used in heating and cooling in coastal areas, and applicable to the Primorska -Goranska county.

Key institutions in the regions such as REA Kvarner (regional energy agency), Energo Rijeka (gas and heat energy provider), representatives of the Primorska-Goranska county, OIE Hrvatska (The economic-interest association The Renewable Energy Sources of Croatia - RES), and Rijeka Consumer Centre were present at the meeting, showing that the motivation to bring energy efficiency in Primorska-Goranska County is in its full strength. Both on corporal, political, and expert levels. 

Learn more about Rijeka on our TC page.

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

May the 8th, 2021 - The plan for many different Croatian reforms and investments, packaged as the Croatian Recovery and Resilience Plan, is on its way to the European Commission's door in the Belgian capital.

As Poslovni Dnevnik/Ana Blaskovic writes, the Croatian Recovery and Resilience Plan, the key to an enormous 49 billion kuna intervention injection, has been completed and it is time to send it to Brussels, with a final agreement set to take another ten days. The more than 1,100 pages list 77 Croatian reforms and 152 investments that the Government, with the practical absence of public debate, envisioned as a springboard for recovery from the ongoing coronavirus crisis and the transformation of the domestic economy.

Finance Minister Zdravko Maric stated that the focus was on grants and that the core of the document was Croatian reforms and both public and private investments. The plan is designed for five components and one initiative - 26.2 billion of the total amount (54 percent) should be poured into the economy, 4.36 billion (10 percent) into public administration, judiciary and state property, education, science and research should get an injection of 7 .5 billion (15 percent). Then, for the labour market and social protection, another 2.09 billion (4 percent), for the healthcare system 2.56 billion (5 percent of the amount). A large amount of these funds, 5.95 million, is intended for building renovation initiatives.

GDP growth

The effect of this Croatian plan this year should be reflected in 5.2 percent of real GDP growth, which would have stopped at 4.9 percent without it. Next year, growth is expected to reach 6.6 percent instead of what would have been 5.2 percent without such a plan, in 2023 it should reach 4.1 percent instead of 2.7 percent. In 2024, Croatia's GDP should grow by 3.4 percent instead of 2.5 percent, and in 2025 by 2.7 percent instead of 2.5. It should be noted that the predictions of the acceleration of the economic momentum are based on the (rather optimistic) assumption of a successful withdrawal of this money, although Croatia has so far withdrawn less than half of the total funds available to it.

Brussels has already warned that payments will be conditional on the fulfillment of very specific goals, if a member state fails there is a (theoretical) possibility of payment at the discretion of the EC, which, despite the offer, should not be counted on.

About two thirds of the funds will go directly to investments, and one third to desperately needed Croatian reforms. What the funds won't and cannot be used for is "patching up any holes", such as resolving debts in the healthcare sector. The government has begun work on a rebalance in that regard which is planned for early June.

"The purpose of implementing Croatian reforms is to influence the better use of factors of production, those that create added value," Maric added. In particular, education reform would improve the quality of human capital by including children in occupations where there are needs in the labour market. In the judiciary system, reforms will be aimed at greater efficiency and the faster resolution of cases in order to improve the business climate. Referring to the segment of state property, Maric pointed out that many companies are owned by the state. From his words, one can read the good news for the stock market is because “activation can directly contribute to the revival of the capital market”.

Looking ahead...

After the European Commission gives its consent over the next two months, the draft plan will be sent to the European Council, and by the autumn, Croatia could receive a six billion kuna advance (13 percent). Implementation begins at the end of the year.

Commenting on the criticism that insufficient funds are directed to the private sector, which should be the engine of recovery and job creation, Maric reiterated: ''There's no need to divide investments into the public and private sectors because public investments also mean the participation of the private sector. The greatest value of the document is looking ahead, as resilience in the long run means implementing 77 Croatian reforms.''

For more, follow our politics section.

ZAGREB, 4 May, 2021 - Although planned for the beginning of this year, the new electronic toll collection system in Croatia will be put into operation as late as the end of 2025, the Večernji List newspaper wrote on Tuesday.

Once installed on the motorways managed by the HAC and Bina Istra companies, the toll will be charged automatically by an upgraded version of the electronic toll collection and number plate recognition system without vehicles having to stop at a toll booth.

To get most of the money needed for the new system, the government has decided to apply for EU funding, including this project in the national recovery and resilience programme 2021-2026. The project has been presented as being part of digitalisation and development of a competitive, sustainable and efficient transport and traffic system.

The value of the project is estimated at HRK 730 million (€96.9m), or HRK 912.6 million (€121.13m) including VAT.

Until the new system is put in place, HAC plans to switch to a cashless-only payment service at 18 of its 76 toll booths where the toll will be charged by the existing electronic toll system or paid by bank cards. These toll points normally see very little traffic, especially in wintertime, the newspaper said.

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

ZAGREB, April 26, 2020 - The Croatian Agriculture Ministry on Saturday dismissed media reports that Croatia will have to pay back HRK 3 billion (€400m) to the European Union because inspectors from Brussels have found that only two percent of grants made available for organic farming are justified.

The ministry stresses that the two assertions are unverified and entirely incorrect.

"Since 2015, €128.3 million has been made available to Croatia for organic farming through the Rural Development Programme 2014-2020, or one billion kuna in total for the seven-year period, of which 15% are funds from the state budget and the rest are funds from the European Rural Development Fund. Since then, the interest of farmers in high-quality food production... has increased significantly," the ministry recalls.

Due to the significant increase in organic farming areas and demand in organic farming grants, the funds made available in the said programming period became insufficient, which prompted the Agriculture Ministry in November 2019 to ask the European Commission to increase the financial allocation for organic farming, the ministry recalls.

A review of grants for perennial organic crops was made at the time and based on an expert analysis, grants were proposed for walnut and hazelnut plantations, the ministry says.

It recalls in that context that back in 2015, it adopted rules on a single grant of €723 per hectare for organic fruit farming, which exceeded grants proposed by experts for individual types of fruit.

It is rather evident that the significant increase in areas covered in nut plantations is due to the increased grant, the ministry says.

"Reports that there is a danger that HRK 3 billion will have to be paid back are entirely incorrect as is the claim that 98% of organic farming in Croatia is fake, and that claim is also very unfair towards organic farmers," the ministry says.

It admits that there are irregularities regarding farming grants, but notes that it has been identifying and penalising such cases through regular checks and inspections on the ground, which has helped reduce their number.

The ministry notes that checks on the ground have established that in 2017 and 2018, 283 hectares of walnut and hazelnut plantations were not eligible for organic farming grants due to overgrowth or other reasons, which helped prevent a negative financial effect on the state budget in the amount of HRK 2.3 million.

It says that most Croatian farmers work hard and that it has been working to help them, with EU grants as well as budget funds, to earn a sustainable income and stay in their rural communities.

More agriculture news can be found in the Business section.

ZAGREB, April 20, 2020 - Croatian Regional Development and EU Funds Minister Marko Pavić said on Sunday that 400 million euros from EU funds had been redirected for medical equipment due to the COVID-19 epidemic, however, the EU funding of the ongoing projects was indisputable.

The funding of the existing agreements and conclusion of the planned agreements are certain, Pavić told the national broadcaster HTV on Sunday evening.

There is no question mark over any project underway, the minister said.

The beneficiaries of the projects have been given three more months for any deadlines so that there will be no need for extra paperwork or for any annexes to agreements in the current circumstances, according to the minister.

However, the situation caused by the coronavirus infection epidemic has led to the redistribution of some funds. Thus, €400 million has been reallocated for the purpose of procurement of medical equipment.

He explained that the shipments of medical and protective equipment coming from China to Croatia during the epidemic, which were not covered by donations would be covered by those redirected EU funds.

Pavić went on to say that the March rescue package also included an additional 140 million kuna for micro loans. In April, this set of measures includes 380 million kuna for that purpose to be ensured through the Croatian agency form SMEs, innovations and investments called HAMAG-BICRO agency.

Pavić expects about a billion kuna to be set aside for working capital from EU funds.

Considering employment measures, some €100 million from the European Social Fund will be made available to the Croatian Employment Service, he added.

More news about EU projects can be found in the Business section.