As Marija Brnic/Poslovni Dnevnik writes on the 20th of July, 2019, after Croatian Parliament ratifies the Croatian Government's cabinet reshuffle, Andrej Plenković's "ship" will probably carry in sailing just as it has until now right up to the end of his mandate and an unfortunate situation such as the country assuming the EU presidency under political instability, will likely be avoided. That all looks great on paper, but it doesn't change anything at all as far as the state of the Croatian economy is concerned.

PM Plenkovićs ''new people" are Marija Vučković, Vesna Bedeković, Ivan Malenica, Gordan Grlić Radman, Josip Aladrović and Mario Banožić.

When it comes to what might be positive for Croatian business, judging by the first estimates, would be an attempt by this group of new Croatian ministers to distinguish Croatia's infamous negative business and investment climate and the absolutely tragic public perception of the state management system.

"Political stability is a prerequisite for economic growth, so it's most important that after the reconstruction of the government, that the continuity of the economic policy that goes in the direction of tax breaks for entrepreneurs remains as it is. If the staff changes in the government contribute to improving the business climate and making life easier for businessmen, then we'll support it,'' stated the Croatian Chamber of Economy's Luka Burilović.

Among the first comments on the changes in the government were made by Gordana Deranja, the president of the Croatian Employers' Association (HUP), she wants to sit tight and wait for another few days, when the first, concrete steps of Croatia's brand new ministers can be seen.

"It is the right of the prime minister to appoint their people, and I can only say that it's important for them to be aware of the situation and that there needs to be continuity in the implementation of reforms," ​​claimed Deranja.

Businessmen haven't had too much of an issue with the fact that most of Plenković's newcomers didn't leave much of an impression at all, and the public didn't hear their goals - yet. Partly because, according to all the information available, they had been selected at the last minute, and partly because the prime ministers' approval for all of the important decisions in the work of their respective ministries was an absolute must.

The ''new'' Tomislav Tolušić (former state secretary at the Ministry of Agriculture) Marija Vučković, has made it clear that no major changes have been made in her line of work, and that the continuity of the policy led by her boss will be a must. Eventually, as she herself says, it will likely be upgraded, and that is precisely what Mladen Jakopović, the president of the Croatian Chamber of Agriculture, expects of her.

"She is a very meticulous person, who counts all the decimals in their exact details and holds all of the rules and regulations close to her, we'll all be satisfied," stated Jakopović, adding that an important phase of negotiations is now underway. Since Vučković was Tolušić's most trusted person, no major personnel changes are expected within that ministry.

Although the former minister of labour, Marko Pavić, became somewhat unpopular because of his lobbying against the referendum initiative "67 is too much" (a retirement age issue) and Josip Aladrović is a supporter of pension reform, he has not yet wanted to be open about his position, but has asked to wait for the votes to be counted and verified in order to ''do what will be essential for pension reform in future''.

Petar Lovrić, president of the Association of Independent Businessmen and Employers, announced that he will immediately request a meeting with the new minister of labour to discuss not only the bad management of the pension system, but also the need for relief for employers when it comes to the burden of sickness, because it is absurd that employers need to pay for health insurance and sick pay.

The former minister had no desire whatsoever to listen to that issue. Lovrić believes that a short-term solution to the problem would be to put the current finance minister in the position of vice president for the economy because he highly values Zdravko Marić, but in the long run, he says this isn't the best solution, because the finance minister is primarily concerned with the budget and should therefore strive for the stronger authority of the economy minister.

Mario Banožić didn't really make how he intends the state property ministry clear in his recent statement. When he sees the analysis, he says, then he'll know more. Mladen Pejnović considers that the ministry's focus on property had been wrong up until now, and that the enterprises were unfairly neglected.

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As Poslovni Dnevnik writes on the 20th of July, 2019, based on economic trends and the number of residents in other transition countries, Croatian economist Velimir Šonje estimates that less developed countries, as well as Croatia can stabilise their number of inhabitants when they reach 80 percent of EU average.

The message from Tao Zhang, the deputy director of the IMF, was that Croatia's region would grow old before it gets richer, ie, before it reaches a certain level of economic development that will provide all of its inhabitants with a decent standard.

Bleak outlooks dominate in almost all of Croatia's demographic forecasts by which the number of older people will be doubled by the middle of the century, and by the end of the century, there will be two retirees for every one working individual, Večernji list writes.

As stated, based on economic trends and the number of residents in other transition countries, Croatian economist Velimir Šonje estimates that less developed countries, as well as Croatia, can manage to stabilise their numbers of inhabitants when they reach 80 percent of EU average. - The Czech Republic, Slovenia and Slovakia, with no particular population decline, are around or above 80 percent of the EU average.

Estonia, which has recently reached that level, had experienced a decline earlier, but it eventually stopped, says Šonje. A researcher from the Vienna Institute, Isolda Mara, came to the conclusion that salary growth resulted in the slowing of certain types of migration. Another conclusion was also drawn, that external mobility from the newer EU member states had slowed down since 2015, and is likely to remain at a lower level in the future.

However, this analyst also points out the fact that it is too early to talk about stronger return migration. 2018 could prove to be a breakthrough year for Croatia, because last year, there was a decrease in emigration and growth in immigration ever since Croatia joined the European Union back in 2013. New Europe is copying Western countries more than those in Croatia realise it is, and they're filling their own labour market gaps with immigration from their less developed, poorer close neighbours.

Even though it makes up part of the group of countries that have managed to reach 80 percent of the average EU GDP, emigration is also still present in neighbouring Slovenia, where this year, according to official information, there are about 40,000 foreigners working there, mostly from Bosnia and Herzegovina and Serbia. Unlike Croatian migrants who raise their anchors and take their entire families with them abroad, Slovenians prefer daily migration and travel to work in Austria or Italy, but continue to ''make their beds'' at home in Slovenia.

''Croatia's tragedy is the fact that it could already be close to 80 percent of EU's average growth. In 2007, Croatia was at 61 percent of the EU average, Poland was at 53 percent, and today Poland is at 71 percent! In the meantime, Croatia has steadily grown two percentage points faster than the EU average, today Croatia could have been at 76 percent instead of at 63 percent,'' said Velimir Šonje, who calculated that Croatia would reach 85 percent of the EU's average development level by 2035, if it continued to grow two percentage points faster than the EU average.

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When not discussing daytrippers and cruise ship passengers, foreign tourists generally spend huge amounts in Croatia, particularly during the summer months. It seems however that Croatia's desire for all-year tourism and a stronger pre and post-season are coming to fruition as the numbers look promising.

As Poslovni Dnevnik/Marija Crnjak writes on the 4th of July, 2019, revenues from foreign tourists in Croatia increased by 5.4 percent in the first quarter of this year compared to the same period last year, according to data from the Croatian National Bank (CNB/HNB).

During January, February and March 2019, tourism revenues from foreign guests amounted to a massive 475 million euros, which is 25 million euros more than was recorded during the same period of 2018. This is more than twice the growth compared to the first quarter of last year, when tourism made 54.3 million euros more than it did back in 2017, which was mainly thanks to last year's earlier Easter.

The increase in revenue in this first quarter of this year matches the increase of foreign tourists' arrivals in Croatia, by almost five percent, while in March and and Easter weekend in the first quarter of last year brought 27 percent more tourists to Croatia.

Tourism Minister Gari Cappelli is pleased with the results of 2019's first quarter.

''The government places great emphasis on the growth and development of the quality of tourism, and significant advances are most noticeable through continuous revenue growth. In the mandate of this government, revenues for the first quarter increased by 23 percent. It's also proof that our policy of strengthening the pre-season yields positive results, not only in terms of tourist traffic, which grew by 36 percent in the same period, but also in tourist spending,'' stated Minister Cappelli.

Throughout 2018, foreign tourists realised slightly more than 10 billion euro in revenue in Croatia, and in the first quarter of the same year, 450.2 million euros in revenue was realised. Shortly before the beginning of the current government's mandate, back in 2016, the first quarter brought Croatia tourism revenue in the amount of 390 million euros, which was 4.5 percent of the total annual tourist income realised by foreign tourists, amounting to 8.6 billion euros.

In that same year, foreign tourists made up 448,000 arrivals during the first quarter, compared to 626,000 in the first three months of this year. Thus, during the mandate of the current Government of Croatia, the first quarter was strengthened by 178 thousand arrivals of foreign tourists and 85 million euros in foreigner tourist income in three years.

What exactly the physical results of the second quarter, which will give a more accurate image of this year's pre-season, are still unknown.

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There are several burning Croatian economic issues, shaped primarily by a lack of qualified workforce and an increasingly bleak demographic picture, is causing concern for its immediate neighbours, most of which aren't members of the EU and therefore don't adhere to one of the EU's four fundamental freedoms of access to the single market - the free movement of labour.

Despite not being EU members, countries like Montenegro are beginning to bite their nails in fear of Croatia's dire situation leaking over into their country.

As Poslovni Dnevnik writes on the 2nd of July, 2019, concerned employers warn that even Croatia's neighbour to the south, Montenegro, will not remain immune to the outflow of labour that is negatively affecting the countries of the region and is continuing to spread, and the consequences of such a problem, being dubbed the ''Croatian situation'', are already being felt in Montenegro, regardless of the fact that this Southeastern European country is nowhere near anything like European Union membership.

The Employers' Union of Montenegro have stated that they believe the worst is yet to come for their country, which will likely be harder hit than Croatia.

''It's currently difficult to assess the impact of emigration as well as the serious threat of the aging of our population on economic development, as we don't have any official data. At the Employers' Union of Montenegro (UPCG), we believe that the outflow of workers, if we continue on at this pace, will be devastating for the Montenegrin labour market, especially given the fact that Montenegro has been struggling for years with a lack of adequate workforce and is replacing it by employing foreign workers, mainly with workers from other countries of the region, which is now turning to the European market and Croatia as the closest EU member state,'' the employers' association warned.

Just a few years ago, Croatia only allowed a few thousand foreigners to be hired by Croatian companies, and there has been an increase in this number to 65,100 (non EU nationals) this year.

In addition to the introduction of this particular measure, Croatia has also adopted a model for Croatian seasonal workers which enables things like insurance to be ensured throughout the year, beyond the summer tourist season, in which the work of seasonal employees takes place. All this is done in attempt to make sure Croatia's economic growth doesn't slow down and as such reduce the competitiveness of the Croatian economy, nor deal yet another negative blow to Croatia's demographic movements on the state's resources, the aforementioned Montenegrin association states.

''With the additional announcement of the opening up of the labour markets of certain European countries, the shortage of workers will soon become a key issue for the Montenegrin economy - not only in the field of hospitality, tourism and construction, but also many other areas, such as in healthcare, where we've witnessed the significant outflow of those who work in healthcare, which is perhaps the most sensitive issue for all of us.

Looking at Croatia's unenviable situation from within close quarters, the Montenegrins in particular are finding this economic situation more than alarming, forcing them to take measures to make sure that their country is more attractive not only to potential foreign investors, but also to Montenegrin employees.

In order to try to avoid what is considered to be an ''inevitable'' Croatian situation, Montenegro is expected to respond in a timely manner to issues at the state level by adopting responsible strategic decisions, starting with the labour market, which needs further assessment, improving the conditions for maintaining existing jobs and opening up new jobs, a faster and more efficient administration, ensuring a more predictable and stable business environment and a stable tax system that would eventually lead to adequately paid and more job satisfaction.

Montenegro is obviously looking at Croatia's constantly worsening demographic trends, dire economic situation and the outflow of qualified workers as a burning issue, and is expecting all state institutions to get on their feet to try to tackle such a situation in their country, before it's too late.

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Students from numerous Croatian schools up and down the country will be offered the chance to be trained for positions which are more in line with the current needs of the Croatian labour market.

In seventeen Croatian counties, students enrolling in this year's summer program will be given the option to take their education in a more practical direction in an attempt to aid the ailing Croatian economy, currently burdened with a demographic crisis, the main symptom of which is a lack of an appropriately qualified workforce.

As Poslovni Dnevnik/VLM writes on the 21st of June, 2019, what this involves is vocational interests that have never before been taught in these schools. In various secondary schools, each county has opened up new subjects by predicting the number of interested students who could enroll and start their education for occupations needed on the Croatian labour market.

Owing to the move, at the beginning of the new school year at the Prelog secondary school in Međimurje County, seven future brewers will be educated, and in a similar school in Čakovec, twenty places for budding interior decorators and ten places for shoe modellers and those who deal with leather garments will be opened.

Future high school students of a school located in Križevci will be able to, among other things, enroll to study to be computer technicians, a new class will be opened at a school in Koprivnica, where future technicians will be trained for electrical machines with applied computing, and in Đurđevac, education for potential future pedicurists will be made available.

In another Zadar school, students will be able to study to become CNC operators from autumn onwards, while in nearby Benkovac, the plans are to educate fourteen glassmasters and six chimney sweeps. In Croatia's southernmost county, Dubrovnik-Neretva County, they have decided to offer the opportunity for future high school students to be educated as hairdressers and beauticians, according to the Croatian Ministry of Education.

Zagreb high school students will be able to enroll in a language school which will be formed in one class in which there will be places for 26 students.

In Ludbreg this autumn, six students will have the opportunity to enroll in studying to become home appliance installers and six places will be available to learn the ropes of baking and the type of work in bakeries. In Vukovar-Srijem County, new courses are open to three schools, one will teach future auxiliary chefs and confectioners, there will be 22 places for the education of future hotel and tourism technicians, and budding auxiliary administrators will also have the chance to educated.

A new class will be opened at a school in Sisak where 24 future technicians will be educated for the development of video games, and in Velika Gorica near Zagreb, there will be a new class of mechatronics technicians starting this autumn.

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Croatia's paradoxical economic situation continues as the country continues to raise its quota to allow for the importation of foreign workers to do the jobs it seems that Croats simply don't want to do.

As Poslovni Dnevnik writes on the 22nd of June, 2019, in the Republic of Croatia, as many as 600,000 residents over the age of 25 and younger than 65 aren't working, nor are they even looking for work, according to a report from Vecernji list.

Most of them, as the aforementioned publication quoted, referring to the data of the Central Bureau of Statistics (CBS), are of an age when it's typically more difficult to gain employment, which is over 50, but among them are nearly 190,000 younger people who could work without any issues, but remain completely economically inactive.

Contrary to what might one think at first sight with an issue such as this, among this group there aren't just people with less of an education, but a large number of highly educated men and women. Interestingly, there are more highly educated women in this group of economically inactive citizens than there are men.

It isn't possible to accurarely assess in which age group these highly educated economically inactive citizens are in, and there's a chance that a decent number of them are actually retired, but the fact remains that in Croatia, as many as 204,000 highly educated people aren't employed, nor are they searching for work. There are almost 97,000 men and 107,000 women in this group, Večernji list pointed out.

Such is the level of disinterest for work among Croatia's inhabitants, that it would only be natural to come to the conclusion that this is a problem of the rent economy or about the grey economy in Croatia.

Otherwise, it is completely illogical that there are so many people in the country who just don't want to work, so it can be concluded that they must be making their money in some way or another, or they've simply not reported their departure from Croatia and are currently working abroad, and these statistics simply refer to them as being present in Croatia, when they may not be at all.

On the other hand, there are about 200,000 less educated Croats who haven't even completed their primary school education, and are likely to be living off the social system because their qualifications can't gain them adequate employment. However, in this group, there is huge potential for auxiliary workers in tourism and construction, two sectors which lack the most workers of all in Croatia at this moment in time.

While 600,000 people in Croatia apparently don't want to work, or even look for work, the country is continuing to import nearly 70,000 foreign workers to deal with the strain on the Croatian labour market.

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As Novac writes on the 6th of June, 2019, fiscal consolidation, investment and business barriers and the burden on the Croatian economy make things very difficult for business in Croatia, according to the results of HUP Skor for 2018, showcased by the Croatian Employers' Association (HUP).

It is a tool to measure the progress of reforms in the twelve critical areas necessary for doing better business and improving life in the Republic of Croatia when compared to the EU 10.

As Gordana Deranja, HUP's president, explained, "HUP Skor is an objective measure of how much we're really reforming."

Since the countries of central and eastern Europe progressed faster than Croatia last year, Croatia's HUP Skor for 2018 is a rather embarrassing 36 out of the possible 100 points, and what continues to push Croatia to the bottom, as was stated by HUP, are taxes and similar burdens. The ratio of general government tax and social contributions to the GDP in Croatia is continuing to rise, and even now it's exceeding the maximum achieved before the reforms in the tax system.

''Structural problems continue to pose a serious threat to adaptation to one of the next crises and permanently limit the speed of economic growth. Although we're satisfied that [Croatia's] GDP grew by 3.9 percent in the first quarter of this year, the fact is that this is still too little and we should be at least four percent more in the long run,'' Deranja said.

"The Croatian economy is the most burdened and that's reflected in its productivity. The economy is congested and has no power to grow," she said.

In addition to the above-mentioned problematic areas in the Croatian economy, the encouragement of investment, productivity and competitiveness, the justice system and the labour market, education, health and pension systems continue to be ''in the red''.

''This year's result suggests that Croatia is lagging significantly behind the EU member states from Central and Eastern Europe, and what's particularly worrying is the fact that Croatia's score is worse than that in countries which are less developed than Croatia, such as Bulgaria and Romania,'' said Davor Majetić, Director of HUP.

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When Croatia jointed the European Union back in July 2013, it agreed that it would eventually have to introduce the euro as its main currency as part of its accession to becoming a full member of the bloc. While many are concerned with the eventual introduction of the euro as Croatia's main currency, with a number desiring a referendum on the matter, it seems that Plenković is quite right when he says it's already a done deal.

The first official step in the process of sending the Croatian kuna to the history books has now been taken by the powers that be.

As Poslovni Dnevnik writes on the 30th of May, 2019, Finance Minister Zdravko Marić and Croatian National Bank (HNB/CNB) governor Boris Vujčić have requested that Croatia enter the Single European Banking Supervisory Mechanism, the first pillar of the European Banking Union, the primary duty of which is bank supervision, according to a report from Večernji list.

This is the first step of replacing the Croatian kuna with the euro, which could happen in five years.

The single supervisory mechanism is mandatory for all Eurozone member states. It is one of the last steps that Croatia has now taken before it officially requests the introduction of the euro as its main currency, abandoning the kuna, and entering into the European exchange rate mechanism, Večernji list writes.

Rather morbidly, this event coincides with the celebration of 25 years of the Croatian kuna, one of the few European currencies whose introduction is celebrated as a major historical and national event, yet in which citizens have little real confidence and in a country over which the euro still dominates.

While opposition among some members of the public remains strong, when it comes to savings and other financial practicalities of life, the euro has no competition in Croatia, just as German marks never did either.

If all goes well in not only Croatia but in the wider European Union ''family'', Croatia could introduce the euro during the year of the thirtieth anniversary of the introduction of the kuna - 2024.

If that doesn't occur, anything else could. It's possible that some of the sovereign and populist Croatian parties could seek and even succeed in launching a referendum, binding or otherwise, and convince citizens to reject the euro, which will force the government to stop the Eurozone accession process, but, that seems distant for now.

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More than excellent news for the Croatian job market and the domestic economy as a whole as as many as 600 jobs are set to be opened in Zagreb County thanks to a huge investment.

As Poslovni Dnevnik writes on the 29th of May, 2019, parts for the aviation giants Boeing and Airbus will be produced in the Republic of Croatia. The parts will be incorporated into the world's most famous aircraft and their engines, including names like Airbus, Boeing, Bombardier, and Rolls-Royce. The news was announced on Wednesday by Večernji list, citing that the Austrian aeronautical company FACC is beginning to construct a production plant for the interior parts of planes in the business zone of Jakovlje in Zagreb County, close to the Croatian capital of Zagreb.

The investment is worth a massive 33 million euros and will open up 600 jobs. The land has already been purchased, the necessary permissions and the permit have been granted and the construction has begun. The plant should be completed by the end of 2020 and production at the plant will commence in 2021.

This great news has also been confirmed by the head of the aforementioned Austrian company Robert Machtlinger, who stated that FACC wants to grow and be quicker than the market and intends to work on strengthening the expertise of its employees. "Zagreb is offering us this because it has a highly qualified workforce," he added.

The company chose between different locations in Central and Eastern Europe and ultimately decided on Zagreb. The sale contract has already been signed, and the Austrian company has become the owner of the land in the Jakovlje business area, totalling 130 thousand square metres.

Vecernji list also revealed that a meeting will take place on Wednesday in Banski Dvori where the President of FACC AGI's management board and the president of AVIC Cabin Systems Co. Limited from China, a company which owns 55.5 percent of the Austrian company, will talk to Croatian Prime Minister Andrej Plenković, Economy Minister Darko Horvat and State Secretary Zdenk Lucić about the project implementation and everything that goes into the planning and licensing phase.

The plan is that construction work on the plant will be completed by December 2020, and production will begin no later than April 2021, according to Dnevnik.

As a daughter company of the Chinese state-owned company Aviation Industry Corporation of China, one of the ten largest Chinese companies, FACC, based in Austria, is part of the global market and cooperates with world leaders in the aviation industry such as Airbus, Boeing, Bombardier, Rolls-Royce. FACC is otherwise a company with more than 3,400 employees from 38 countries which work in thirteen locations worldwide, Vecernji list writes.

They added that un the financial year 2018/2019, they earned 781.6 million euros in revenue, an increase of 4.5 percent compared to the previous financial year, and also the best result in the company's thirty-year history.

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As Novac writes on the 25th of May, 2019, the headquarters of the Zagreb-based Q IT company were visited by US Ambassador W. Robert Kohorst, where the representatives of the Croatian company Q and the US Ambassador discussed their US business operations, projects and further plans.

Ambassador Kohorst, who comes from the business world, was particularly interested in Croatian Q's business strategy on the American market and what challenges they encountered. The conversation was also conducted in the spirit of bilateral relations between the United States of America and Croatia, with the aim that the US embassy could further assist Croatian companies with their operations in the United States, but also American investors here in Croatia.

''We're glad that we had the opportunity to host US Ambassador Kohorst and to Q and the projects we've worked for the US market to him. The exchange of knowledge and experience is crucial because those who can influence laws must first hear what's going on out in the field. That's why we were delighted to be able to share our experience with the ambassador,'' stated Filip Ljubic, CEO of Q.

In addition to the American Ambassador, Q was visited by three groups of American students from the Quinnipiac, Michigan and Redlands universities this year. For a total of 110 students who visited, the story of Q's success was their main interest, since Q grew by a staggering 4,000 percent in the last four years alone, and several of them expressed their personal desires to work in this Croatian company.

Across the Atlantic over in the United States, this Croatian company operates through its Los Angeles and New York offices, and they have so far successfully completed projects for leading American companies such as Coca-Cola, Facebook, Walmart, and the United States Postal Services.

In addition, last year in the United States, they were rewarded for the excellence of their brand, receiving the REBRAND 100® award alongside the likes of American HP and Cadillac.

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