May the 5th, 2023 - The Croatian Employers' Association's Igor Skrgatic has stated that a new Labour Law which would allow for greater flexibility is now more necessary than before.

As Poslovni Dnevnik/Josipa Ban writes, Croatia is a country lacking in people, warned Igor Skrgatic, the president of the Croatian Employers' Association's Association of Small and Medium Enterprises, at a working lunch with Minister of Labor Marin Piletic.

Igor Skrgatic stated that this problem, which has numerous consequences, the most important of which is the lack of manpower, should be properly addressed and work needs to be done properly and diligently on policies that will lead to a functional solution. Therefore, the Croatian Government must think and act in the direction of keeping those who have decided to remain in Croatia, as well as work harder on encouraging the return of those who have left.

Is an immigration strategy coming?

Irena Weber, the chief director of the Croatian Employers' Association (HUP), told Minister Piletic that the government must raise its general level of awareness of the importance of entrepreneurship because they are the ones who create jobs, fill the state budget and create much needed added value.

The best way to retain workers is by increasing their wages, and for higher wages, Weber repeated, tax relief is needed. As is already more than well known, this will be implemented next year, and while HUP welcomes it, they are also looking for a change in other policies.

In his part of the presentation at a recently held HUP gathering, where this year the topic was the labour market, the Labour Minister was supposed to give an overview of the policies implemented by the state to improve the unenviable position in which entrepreneurs currently find themselves. From everything that the minister said during the 20-minute speech, it turns out that the ruling party doesn't actually have many concrete policies in this regard, apart from active employment policy measures.

For example, a large influx of foreign labour requires certain properly laid out immigration policies, and Croatia does not yet have such a thing. Piletic announced that the first immigration strategy, which the Ministry of Internal Affairs (MUP) is in charge of, will be adopted by the end of the year.

In the meantime, 124,000 foreign (non-EU) workers arrived in Croatia last year alone (we know this because that's how many work permits were issued), and this number is expected to reach 200,000 this year. In addition, there are more and more people arriving from more ''exotic'' countries among the foreign workers currently arriving, warned Igor Skrgatic, such as Nepalese, Pakistanis, Indians, Uzbeks... all of whom need to be properly integrated into society, and Croatia simply isn't ready for that process.

In addition, as Igor Skrgatic stated, employers would also like the new Labour Law to be looked into and amended. "Here in Croatia, there is a lot of unused man power, and according to statistics, this country is the record holder for having an inactive population. The lack of interest in taking up gainful work is part of the Croatian mentality and a consequence of rentierism, and on the other hand, a consequence of demographic trends and the general state of the labour market. In order to change that, we need to change the Labour Law and enable greater flexibility for both employers and workers,'' believes Igor Skrgatic, adding that the amendments to the Labour Law that came into force at the beginning of this year very much failed to meet employers' expectations.

Piletic stated that the plan and agreement is to start creating a new Labour Law, but that it isn't a realistic idea at least for the next year.

"Since the changes came into force at the beginning of the year and the drafting of by-laws and ordinances necessary for the implementation of a new Labour Law are yet to follow, it isn't realistic to start drafting a new law until we pass all of that,'' said Piletic.

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

March the 10th, 2023 - This week in Croatian politics, we've had a rather poor response to Plenkovic making it illegal to leak information from active investigations, Milanovic has claimed that people are drowning in corruption, and pensioners have had some relief from paying certain health insurance contributions. Oh, and there's been talk of price increases, again.

Plenkovic made leaking information an act punishable by law last month, and it's proved wholly unpopular

Index writes that the Promocija plus agency recently conducted some research for RTL regarding the announcement of changes to the Criminal Procedure Act and the Criminal Code. These alterations to the law would make the leaking of information a punishable act, and a survey was conducted from March the 1st to the 3rd on a sample of 1,300 respondents with a standard error of plus or minus 2.7 percent and a confidence level of 95 percent.

Most respondents have indicated that they don't support criminalising the leaking of information from investigations, which is the government's plan. The majority, i.e. 51.4 percent of respondents are against this idea, while 34.5 percent support it.

14.1 percent didn't know or didn't want to answer. Among those who are in favour of making the leaking of information a punishable act, as expected, are HDZ voters (55.6 percent of them support it), followed by those who vote for HNS (80.6 percent of them support it), those who would vote for the Suverenisti (64.5 percent) and Bandic's party (59.1 percent).

While the Prime Minister is making little to no effort to hide that he is bothered by the political damage that results from the disclosure of information from investigations, the respondents see this very reason as the main trigger for changing the law. 51.1 percent of respondents think this is the sole reason for the idea. At the same time, 13.1 percent of them think that the reason is the protection of the rights of all persons involved in investigations, and even the protection of the investigative procedure, which is what 10.1 percent of respondents think.

People believe that the biggest victims of such a change would be journalists

Only 4.9 percent of respondents believe that the main reason for changing the law is the independence of the judiciary. According to Prime Minister Plenkovic's announcement, leaking information from judicial investigations will become a criminal offense, and the goal, as stated, is to prevent information and details from investigations from being released to the media.

The prime minister claims that he isn't trying to stifle any media freedom, but the main victims of this kind of judicial maneuver are precisely journalists, and this is what almost 37.5 percent of respondents believe. 8.9 percent believe that judges and court officials will suffer, and 8.4 percent of the survey participants believe that the public itself is the main victim.

President Zoran Milanovic says that the Croatian public is ''drowning in corruption'' and that the current situation is worse than it was during Ivo Sanader's reign

Milanovic is no stranger to simply blurting out whatever he thinks, with little to no regard for anyone he might offend, and the arguments between him and PM Plenkovic have become somewhat iconic. He has taken another swipe at Croatian politics as run by Plenkovic and stated that the Croatian public is ''drowning in corruption'' and in a ''worse state than when Ivo Sanader was in charge''. 

"When someone comes and tells me that they're ending their cooperation with the president of the republic [in reference to Plenkovic allegedly saying that to him], who was elected democratically, then that's a clear violation of the Croatian Constitution, I'm surprised that that person is still the prime minister, and that someone in the parliament supports that. Let's take a good look at ourselves because Plenkovic is now violating the constitution,''

Milanovic then went on to quote a list of names and positions within either the government or within society that he believes Plenkovic arranged for his own benefit, and even dragged members of his family into it all.

''You people are absolutely drowning in corruption, this whole situation is worse than the one Ivo Sanader caused. At least he only stole for himself,'' Milanovic stated, before continuing with more quite jarring statements about Plenkovic being arrested in Brussels.

Government session closes with the abolition of health insurance contributions for pensioners and VAT amendments

The amendments to the VAT Act proposed by the government at the most recently held session have resulted in the retention of lowest VAT rate yet on gas and some other energy products, and the amendments to the Contributions Act have abolished additional health insurance contributions payable by pensioners.

Amendments to the Law on VAT

According to Plenkovic, the government is proposing changes to the VAT Act, which will see it retain the VAT rate of five percent on deliveries of natural gas and heating from thermal stations. This includes fees related to these deliveries, as well as for deliveries of firewood, pellets, briquettes and wood chips even after March the 31st of this year.

"We're continuing with the reduced rate of VAT on gas, pellets, briquettes, wood chips, and we're going to extend this measure for another year. In this way, we're successfully enabling everyone to be supplied with these types of energy sources on time and at the lowest possible rate," Plenkovic said.

"We support pensioners"

When it comes to changes to the Law on [Health Insurance] Contributions, the proposal is to abolish the payment of an additional contribution for health insurance, which includes about one million pensioners, to whom the said contribution will be paid at the expense of the state budget. This will refer to around 32,000 such individuals.

"We support Croatia's pensioners, and another 32,000 of them will keep what they have been paying so far as part of their regular pension," Plenkovic said.

Freedom House says corruption continues to represent a very serious problem for Croatia

Political rights and civil liberties are generally respected in Croatia, but corruption and discrimination against certain minorities remains a very serious and real concern, Freedom House stated in its 50th annual report on the level of freedoms across the world.

Compared to last year, Croatia lost a point and now has 84 - 35/40 for political rights and 49/60 for civil liberties. Civil and political rights are generally respected in Croatia, but corruption in the public sector remains a serious problem, according to the Freedom House report.

As key events last year, they cited the arrest of various big names from the world of Croatian politics, the staggering INA affair and the fulfillment of the conditions for Croatia's entry into the Eurozone and Schengen despite these issues. The American non-governmental organisation warned that Roma, Serbian nationals, ethnic Serbs and members of the LGBTIQ+ community continue to face discrimination. It also noted the presence of far-right groups and people who promote discriminatory values in public spaces as a legitimate concern.

Irena Weber, the Croatian Employers' Association (HUP) president, talked about price increases and about Croatia's lack of competitiveness economically

Irena Weber from the Croatian Employers' Association (HUP) commented on various economic topics for N1 television, from tax policy to government measures to unjustified price increases and the issue of non-working Sundays.

HUP's salary taxation model

HUP has proposed an increase of salaries through tax relief in such a way that the non-taxable part of an individual's salary rises from 533 euros to 663 euros and that the tax bracket of 20 percent is reduced to 15, and that 30 percent of the income tax is applied only to salaries greater than 50,000 kuna. The amount that local self-government units would lose would be compensated by the introduction of a 10 percent tax on apartment rent. Commenting on the HUP initiative, Finance Minister Marko Primorac said that it was not particularly well thought out.

"The idea was to draw attention to the fact that the income tax burden in Croatia is very much an issue, while, on the other hand, income from other sources is practically not subject to taxation. The intention was to point out that in this country, in which we continuously swear by education, work and similar, work is heavily taxed while we have a large number of people who don't participate in payng income tax whatsoever,'' said Weber.

"The idea is to start discussing all of that. We're arranging a meeting with the Minister of Finance and we need to open this topic properly because there is a large amount of unfairness in the distribution of the tax burden from labour in relation to property tax. With this kind of tax burden on labour, low productivity and the like, we're quite uncompetitive as a country,'' she added

She also pointed out that the government has relieved the tax burden on wages in several rounds already, but also that this increase coincided with strong GDP growth. "Croatian GDP grew by over 20 percent, which is an excellent result even in European Union terms, but that also coincides with the increase in income into the budget."

When asked how much employers raised prices, Weber says: "The domestic labour market continually lacks the staff, employers are fighting to get their hands on every possible worker, there's a real struggle. The problem of labour shortage is also being solved by importing labour from abroad, which isn't efficient either. The State Bureau of Statistics (CBS) announced that wage growth stood at 9.3 percent. We have information from our survey that HUP members increased the wages they pay out by over 15 percent, and yesterday morning we had a meeting with the trade unions, the merchants had raised their wages by over 20 percent. We really must keep raising wages."

"There were no unjustified price increases''

Weber and other HUP members support the continuation of the government's measures to limit energy prices. However, she believes that the issuing of fines for retail chains and others in the trade sector that didn't send the government a list of their products and their prices for the so-called ''white lists'' will not come to pass: "I think all of that was nothing more than speculation.''

She added that inspections carried out showed that almost no irregularities were found even in several hundred checks. "In addition, the CBS published data on price growth in January and February - 1.3 percent in the beverage, food and tobacco sector, which confirms that there was no unjustified price increase there. Retail chains played perhaps the most significant role in the conversion of the euro as an important channel."

"It's not pleasant for me to see any kind of jump in prices either, but we need to look at the bigger picture, inflation is a global problem, we know how the prices of energy, the cost of labour, the price of packaging, and raw materials have risen. With such a price shock, it's logical that the price of the final product also rises. I think that prices will start to stabilise," added Weber.

At the end, she commented on the government decision on non-working Sundays: "We cannot support any ban. HUP is against any restriction of the right to work. This is not the time for that."

For more on Croatian politics, make sure to check out our dedicated section. For a weekly roundup of what's been going on, keep an eye out for our Week in Croatian Politics articles which are published every Friday.

This week in Croatian politics, we've had everything from Spanish royalty visiting the country for the very first time to Milanovic insulting the foreign minister, missiles hitting Poland, complaints about taxes being put on taxes and still not actually knowing who dropped a drone on Zagreb back in March.

PM Andrej Plenkovic meets the Spanish king

Andrej Plenkovic met with the Spanish king during the very first visit of the Spanish royals to the Republic of Croatia this week. King Felipe VI of Spain and Plenkovic sat down to discuss economic cooperation, the ongoing energy crisis, migrant policies and Croatia's imminent entry into the Schengen area.

As stated, this was the Spanish royal couple's very first official visit to Croatia, and Plenkovic pointed out that the visit is "a pledge to further strengthen bilateral relations with Spain at all levels, with a special emphasis placed on on cultural, educational and scientific exchange".

A Memorandum of Understanding was also signed between the Croatian Ministry of Science and Education and the Spanish Ministry of Science and Innovation on cooperation in the creation of the DONES Programme, which envisages a partnership between Croatia and Spain in fusion research.

"Projects like this are an opportunity for further cooperation between Croatian and Spanish companies in the high-tech and scientific sphere, they also represent the improvement of economic relations," the press release on the matter stated. Plenkovic was quick to thank King Felipe for Spain's ongoing support in Croatia's entry into Schengen, which is set to occur on the 1st of January, 2023, the same date on which Croatia will officially adopt the euro as its currency.

The pair also discussed current challenges such as the energy crisis caused by Russian aggression against Ukraine and the bloc's migrant policy, which requires a unique European response, as well as the role of the EU in Latin America and in the Western Balkans.

The Croatian Employers' Association (HUP) claims the new tax which was proposed recently will further discriminate against certain companies and work to punish the most successful

''We're shocked by the government's proposal for a new profit tax because it's discriminatory and puts the most successful companies in Croatia at a disadvantage. This is actually the dishing out of a punishment to the most successful companies in this country, the companies that fill the state budget the most, employ the most people, pay the highest salaries and invest the most," said the Croatian Association of Employers, reacting to the introduction of the new profit tax.

"Companies operating here in Croatia don't have extra earnings, this year's profit barely covers losses from previous years, and it's completely unclear as to why the government is doing this. Ahead of us lies a crisis and recession, the depth of which we don't yet know. What we know is that Croatian companies are cancelling orders left, right and centre and that now we need the strength to survive the recession and let people keep their jobs," they warned from HUP.

"This is a proposal to introduce a tax on taxes, which will certainly stop investment in development, which means that there will be no new jobs or salary growth, and we're once again becoming an unsafe country for business and looking unattractive to investors. Along with Hungary, we're the only country that spreads the tax across the entire economy instead of, as prescribed by the European Commission Regulation, keeping it exclusively to the energy sector, which made an unexpected profit thanks to market disruptions caused by the war in Ukraine," announced HUP.

"HUP cannot support the unjustified discrimination of large companies that this proposal brings. On top of that, this tax cannot be introduced retroactively for the year 2022, when investment and employment plans have already been implemented. This proposal will unjustifiably penalise the most successful Croatian companies, the best employers and the largest investors who and they pay the most into the state budget," said Irena Weber, CEO of HUP.

Instead of introducing yet more new taxes, HUP very concretely advocates a full tax reform and stronger work relief through an increase in the personal tax deduction and a reduction in income tax rates. This is the way to strengthen the economy, attract new investments, increase wages and create new jobs, according to them.

Milanovic and King Felipe talk politics while their wives talk healthcare and the prevention of obesity in children

King Felipe VI of Spain and Croatian President Zoran Milanovic are both satisfied with the bilateral relations between the two European countries, while their wives emphasised the importance of preventing obesity in children for preserving the health of the entire population, according to the press releases published after their meetings in Pantovcak.

The Spanish king was on a two-day official visit to the Republic of Croatia together with Queen Letizia, and after the ceremonial reception at Pantovcak, President Milanovic and his wife Sanja Music Milanovic spoke with the royal pair. The Spanish king and the Croatian president both stated that they are satisfied with the bilateral relations between Croatia and Spain, which are two friendly and allied countries, members of the European Union and NATO.

King Felipe and Milanovic also referred to the close scientific cooperation between the two countries, which is particularly marked by the joint partnership in the aforementioned DONES programme, which the Spanish king also discussed at length with Plenkovic.

The meeting also discussed current European and global topics, including the security crisis in Eastern Europe caused by Russian aggression against Ukraine, while their wives discussed the importance of preventing obesity in children.

Sanja Music Milanovic and Queen Letizia of Spain separately discussed innovative approaches to obesity prevention in children in Croatia, Spain and the entire continent. The importance of obesity prevention in children for preserving the health of the entire population was emphasised and the importance of a comprehensive approach to obesity prevention through a multisectoral set of interventions aimed at all periods of life was emphasised, the press release on the topic stated.

Music Milanovic presented the professional and scientific activities she carries out in this area in Croatia and Europe and announced the upcoming inaugural summit of the spouses of European leaders on the topic of childhood obesity prevention across Europe, which she will jointly organise with the European Office of the World Health Organisation (WHO).

The King and Queen of Spain were, as stated, on their very first official visit to Croatia during the year which marks the 30th anniversary of the establishment of diplomatic relations between Croatia and Spain, all with the aim of confirming exceptionally good bilateral relations and providing incentives for their further development.

Croatian authorities still don't know who launched the six-tonne drone which hit Zagreb eight months ago

As news broke about an alleged Russian missile having crossed over into Polish territory, killing two people, our memories return to the drone which struck Zagreb eight months ago. It turns out that the powers that be still have no idea who launched the mysterious drone which crash landed and ended up in pieces. 

The Russians are still claiming that the drone which struck Poland had nothing to do with them, saying all those who are claiming it to be Russian are just trying to provoke. Still, we were all shocked and we went from speculating about a Russian attack on Poland, a NATO country, to thinking about the possibility of a third world war to, what is now increasingly likely, finding out that the missile was in fact Ukrainian.

As a reminder, two people were killed after, as Polish authorities then said, a "Russian-made projectile" fell near the village of Przewodow, about 6.4 kilometres west of the Polish-Ukrainian border, around the same time that Moscow forces launched their largest wave of missile attacks on multiple Ukrainian cities in more than a month.

The circumstances of the incident, including information about who fired the missile and from where it was fired, were unknown, which caused possible speculation about Russian involvement in the event and expectations of NATO's next step following the apparent striking of Poland, a NATO member state. But according to US officials, initial findings suggest that the missile that hit Poland was actually fired by Ukrainian forces at an incoming Russian missile.

Three officials told the Associated Press (AP) news agency that the Ukrainians were trying to defend themselves against Russian fire aimed at their electrical infrastructure. This is the event that reminded us of the incident that happened on March the 10th right here in Zagreb, just two weeks after the start of the Russian invasion of Ukraine. Then, a strange Soviet-made Tu-141 unmanned aircraft crashed in Zagreb near the "Stjepan Radic" student dormitory. During the fall, the unmanned aircraft crashed into the ground, leaving a crater behind it.

The circumstances behind it all are still unclear, so Index asked DORH recently if it had ever actually been established who had sent that drone into Croatian territory.

"On April the 13th, 2022, the County State Attorney's Office (DORH) in Zagreb, in the presence of experts, held a press conference where they reported on the results of the investigation related to the crash of the drone.

''At the aforementioned press conference, it was stated that the answers to the questions about where the [unmanned] aircraft came from and whose aircraft it was are under the jurisdiction of other bodies, and not under the jurisdiction of the State Attorney's Office," the answer reads. As for the press conference that DORH mentions in the answer, it was said that the drone had Ukrainian colours on it, but also that it was carrying a bomb. "It was undoubtedly established that it was fragments of an OFAB 100-120 aerial bomb," Major Mile Tomic said in a DORH press release back in April, adding that a lighter was also found.

"During the impact, an explosive device did explode, as was evidenced by the creation of a large crater, the scattering of earth and stones, the ejection of fragments from the crater, as well as traces of tearing and hardening of the metal parts of the bomb," said Ivana Bacic, a chief fire and explosion expert.

"The original aerial bomb should contain 40 to 46 kilos of TNT military explosive, which would be characterised by blackening," Bacic noted.

The Zagreb drone incident could therefore have had horrendous consequences, and yet it seems we're none the wiser. By sheer luck, a real tragedy was avoided. When people say the word 'drone', to many people it sounds like a plastic toy or indeed a type of worker bee, but in this case we're dealing with something that weighs six tonnes and was carrying an explosive on it. It fell in the immediate vicinity of the student dormitory and what could have happened doesn't bear thinking about. In spite of all of that, it is still not known who the drone belonged to, how it was launched, or and why.

Back at that time, the drone event stimulated two debates. First, the question arose as to how much protection NATO provides to Croatia in general.

Before entering Croatian territory, the drone flew over two NATO member states, Hungary and Romania, only to crash in the third NATO member state, Croatia, after seven minutes of flight. In those seven minutes, no one reacted, neither the Armed Forces of the Republic of Croatia nor the Directorate of Civil Protection. NATO did nothing either, and all that lack of action in the then very fresh situation of the shocking Russian invasion of Ukraine and the outbreak of war here in Europe once again.

"NATO's integrated air and anti-missile defense followed the flight path of the object that subsequently crashed in Zagreb. The Croatian authorities have announced that they are investigating this incident," said a NATO official at the time.

Second, in parallel with the investigation, there was a debate about whether the drone really had a bomb on it or not. Defense Minister Mario Banozic and Prime Minister Andrej Plenkovic claimed that there was an explosive device in the drone, while a number of experts disputed this. President Zoran Milanovic was also skeptical about the presence of a bomb in the drone, and he was quick to reproach Plenkovic and Banozic for stoking fears.

Even NATO Secretary Jens Stoltenberg entered the discussion about the explosive device on the drone, and he stated at a press conference that the drone was unarmed. After that, another press conference was called by Prime Minister Plenkovic, who denied his claim, along the way showing photos of parts of the drone that he said belonged to the bomb.

As stated, despite the severity of this incident and all of the potential reasons behind it which are extremely concerning to think about given Russia's actions and the ongoing war over in Ukraine, nobody seems much more in the know then they were back on March the 10th.

Foreign Minister Gordan Grlic Radman says that we will not be training Ukrainian soldiers on Croatian territory

If you recall, Zoran Milanovic was among the loudest in his opposition to this idea, and it seems he is far from alone in his thoughts that supporting Ukraine should be as far as Croatia goes, as we don't want to bring the war to our doorstep. 

"I'm absolutely not going to give my consent. Grlic Radman went to Brussels without my prior consent. There are enough of Plenkovic's mini ministers going up to Brussels without the prior consent of the commander-in-chief, and it isn't going to carry on that way. Grlic Radman is nobody and nothing, Plenkovic is actually important here, but he went and pushed himself to the front row like a dumb nerd,"  Milanovic said about the Minister of Foreign Affairs, once again using another opportunity to sling mud and throw insults around.

Grlic Radman also said later today that there will be no training of Ukrainian soldiers in Croatia, and he remained polite and professional in his wording.

"What Croatia can offer, it will offer. Is it the training of Ukrainian soldiers on our territory? No, no it isn't, it will be on the territory of some other EU member states that have offered. However, the countries in which that might take place still haven't been determined,'' Grlic Radman said in an interview with RTL Danas/Today.

For more on Croatian politics, make sure to keep up with our dedicated section and keep your eyes peeled for our Week in Croatian Politics articles which are published every Friday.

May the 27th, 2022 - The Croatian Employers Association (HUP) is launching a praiseworthy initiative aimed at the prevention of underage drinking, which continues to pose a very real issue across the world.

As Novac/Jutarnji writes, the Croatian Employers Association is launching activities for the public and for those in the hospitality and catering sector, with the aim of providing additional information on the importance of the moderate and responsible consumption of alcohol, as well as responsible serving of alcohol in restaurants to encourage the proper prevention of underage alcohol consumption.

One of the activities of the Croatian Employers Association in this regard is the launch of an online educational page called www.konzumirajodgovorno.hr (consumeresponsibly) where readers can find useful information on the impact of alcohol on the body and on overall health, warnings about groups for which alcohol consumption isn't at all recommended, with special emphasis placed on the negative impact of alcohol on minors.

The site contains useful tips and educates parents on how to approach and talk to their children and other young people when it comes to alcohol. With this initiative, Croatia has joined other European countries which work to promote responsible alcohol consumption as part of the campaign and the international website www.responsibledrinking.eu.

This branch of the Croatian Employers Association simultaneously launched a quiz on responsible alcohol consumption across eleven European countries and supported a project launched by spiritsEUROPE, a European association that brings together the spirits sector through 31 national associations. The quiz provides guidance and answers to key questions about moderate alcohol consumption, explains the differences between moderate and excessive alcohol consumption, contains tips on responsible consumption and explains the differences between different alcoholic beverages. The quiz can be accessed via the website konsumirajodgovorno.hr or directly via the link: http://edapp.click/spiritseu-hr.

In addition to educating the public, the aforementioned association has also developed a platform for online educational training on the responsible serving of alcohol intended for the hospitality sector. Entitled "I serve responsibly", it aims to reduce irresponsible alcohol consumption, and point out the problem of juvenile alcohol consumption, as well as to promote catering and hospitality facilities that serve alcohol responsibly.

"Raising awareness among both the public and among those working with alcohol in a professional sense is key to encouraging responsible behaviour, which is why we've launched a series of activities to highlight the importance of moderate and responsible alcohol consumption, the prevention of juvenile alcohol consumption, and the need for education on potentially dangerous situations such as driving under the influence, with the goal of building responsible behaviour in the community in which we operate and do business. Consumers must have access to information to know the effects of alcohol on their health, and those working with alcohol should contribute to the promotion of moderate and responsible consumption through doing responsible service and business,'' said Zoran Maksic of HUP.

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

ZAGREB, 13 June, 2021 - An estimated potential loss for the Croatian budget due to the illegal tobacco market in 2020 was HRK 1.4 billion, according to findings of a survey conducted by the Croatian Employers' Association (HUP) and the Ipsos pollster.

The findings of the survey, conducted on a representative sample of 1,344 households with a total of 3,299 respondents, show a marked share of untaxed cigarettes and tobacco products used by consumers.

As many as 28.1% of adult Croatians are tobacco consumers, and 17% of tobacco products consumed in a year are illegal products, with illegal cut tobacco accounting for the largest portion.

As a result, in 2020 Croatia lost 1.4 billion kuna in tax revenue due to tobacco smuggling, HUP main economist Iva Tomić said last Wednesday at the presentation of the survey's findings.

Nearly 3 in 10 Croats aged over 18 are smokers

Davor Tolić of the Ipsos pollster said that 28.1% of adult Croatians consume tobacco products and they mainly smoke cigarettes, followed by cut tobacco.

The consumption of e-cigarettes, cigars and pipe tobacco and cigarillos amounted for less than 1% of the total consumption.

(€1 = HRK 7.5)

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ZAGREB, 6 June, 2021 - Entrepreneurs expect local authorities to cut costs, downsize the number of employees in the administration, reduce administrative burden and utility fees, a survey by the Croatian Employers' Association (HUP) has shown.

In May, HUP carried out a survey among its members with the aim of examining what entrepreneurs expect from representatives of local and regional government in the coming period. Nearly 200 companies from all over Croatia, which employ more than 14,000 people, have responded to the survey, HUP said on Tuesday.

In the survey, local goverment received a weak grade  (D), which indicates less than satisfactory performance.

Top three priorities for entrepreneurship recovery

HUP members also highlighted the top three priorities that the municipal/city government must deal with immediately to encourage the recovery of entrepreneurship, and scaling down the costs and the number of employees in public administration was ranked as number one priority, as said by 47% of the respondents.

The second priority is the abolition of administrative and utility fees (44%) and the third priority is the abolition or reduction of surtaxes and other fess (41%).

HUP representative also expect and encourage greater involvement and participation of entrepreneurs in the work of local government.

We propose that economic councils be formed in the offices of mayors and county prefects, which would consist of up to fifteen entrepreneurs from the private sector, education representatives and representatives of other factors important for the local economic development. The council would discuss local economic issues, business conditions, permits and education, and in this way give added value to the economy and the wider community, said HUP's Kristian Krpan.

Local government gets weak grade D

The average grade HUP's entrepreneurs assigned to city/municipal government for encouraging entrepreneurship and an entrepreneurial climate is a weak grade D, or an average of 2.3 on a 1-5 scale, HUP said.

The cities of Bjelovar, Virovitica, Sveta Nedelja and the municipality of Lokve were exceptions and received high average grades.

When it comes to counties, the two initiatives rated as most significant for launching a stronger investment cycle and creating new jobs were awarding non-repayable grants and adopting new county development plans to tap EU funds.

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

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ZAGREB, 2 June, 2021 - The Croatian Employers' Association (HUP) and the SSSH trade union federation have asked Prime Minister Andrej Plenković for an urgent meeting on the regulation of regular public transport, stressing that if the meeting is not held, they "will be forced to take certain joint activities".

The answer and the date of the urgent meeting are expected by Friday, 4 June, at the latest, the associations said in a letter to the prime minister.

Employers and unionists say they have been "more than active" in proposing solutions and "more than patient" over the last three years, waiting for the final implementation of European and national regulations.

The HUP and the SSSH warn that the already ready legal solutions that were a prerequisite for signing contracts for regular public passenger transport on county and inter-county lines up to 100 kilometres are not implemented due to the inactivity of state administration bodies.

They also said that the decision had not yet been made on the distribution of funds from the state budget to counties, even though the funds, according to the SSSH and the HUP, had already been secured, and that public service contracts between counties and private transport companies involved in regular public passenger transport had not been signed yet.

"Private bus carriers from the HUP transport association account for 80% of the public transport on county and inter-county lines up to 100 kilometres and employ over 7,000 workers who are directly affected by such irresponsible behaviour of the relevant ministries," the HUP said.

Without a public service contract, the process of collective bargaining to improve working conditions in the transport sector is at a standstill and existing jobs are in jeopardy, they noted.

The operation of most public bus lines is at risk, especially in rural areas, and workers and private public transport providers haven't been able to plan their business and their companies' prospects for three years now, the HUP and the SSSH warned.

The HUP and the SSSH think that the government should make a decision on the distribution of funds from the state budget to counties (signatories of contracts with transport companies) at its next session.

They added that it was also necessary to stop discrimination against private bus carriers and their workers in relation to carriers owned by the public sector since private companies still didn't have public service contracts, while public companies did, for the same service.

They also think that it is necessary to continue with the job-retention subsidies for all companies that continue to register a decline in business and meet the prescribed criteria.

That is especially important, they said, for passenger transport on lines in rural areas, where the number of passengers is declining sharply, also because of the end of the school year and the holidays, and cannot be sustained without state support.

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

May the 28th, 2021 - Croatian employers have proposed that the Croatian Government keep some economic measures, namely the job preservation measures introduced to try to combat the economic effects of the pandemic in 2020, in place for longer than planned.

As Poslovni Dnevnik/Ana Blaskovic writes, with the abolition of some of the country's epidemiological measures with even more relaxations to come in the foreseeable future, the Croatian Employers' Association (HUP) sent to the Minister of Finance Zdravko Maric proposals for a new set of economic measures.

The existing ones, this association of Croatian employers says, should be very carefully and only gradually rolled back in order to avoid a wave of bankruptcies and layoffs, and the introduction of several new ones are crucial in order to preserve liquidity and start an investment cycle.

“Maintaining liquidity isn't just a matter of a period of closure - it's necessary to provide liquidity to a company for a longer period of time, so that the business can start up again (and return to the point of coverage) at the moment when restrictions (work, movement) are removed,'' say this group of Croatian employers.

They noted that small and micro enterprises, which are the most numerous Croatian enterprise, are more at risk than others as measures expire and recovery is possible only with investment momentum.

"Although not all activities are equally affected by this crisis, for the sustainable growth of the overall economy, it's necessary to start up business again in all sectors. However, given the effect of the coronavirus pandemic, it's questionable to what extent companies are able to finance any new investment cycle on their own,'' the Croatian employers stated.

Although savings have increased, access to finance is limited, so support from the state in the form of additional measures and programmes is absolutely necessary, as are different types of grants and incentives to launch investments.

Aware of the jump in government indebtedness from the association of Croatian employers, they claim that the risk of a sudden relaxation of economic measures is significantly higher than additional (favourable) borrowing.

"The worst thing would be that after the introduction of all of those measures and everything we then endured following the suspension of those measures, that the affected companies remain in trouble and start firing people. Why would the owners of affected businesses have to bear the loss of revenue all on their own? They aren't any more to blame for the consequences of the pandemic than business owners who just happen to not be particularly affected by this particular crisis,'' they stated.

Therefore, in their range of requests addressed to the Minister of Finance, they propose to retain support for job preservation until companies achieve at least 90 percent of their respective pre-pandemic revenues.

"It is extremely important that the decision to get rid of certain measures to support the economy be introduced gradually, depending on the epidemiological situation, but also on the situation in a particular sector so as not to cause a wave of bankruptcies and layoffs," said the Croatian employers, supporting OECD and IMF recommendations, as well as those recommended by the EC.

They're also asking the government to continue covering part of companies' fixed costs, taking into account the percentage drop in revenues, ensuring easy access to liquidity and working capital loans with guarantee schemes for the SME segment and the possibility of converting loans into grants, continuing the moratorium until at least the end of 2021 and investing in Industry 4.0.

For large Croatian companies, they propose support for investments by increasing support in the Investment Incentives Act and additional support to companies for co-financing a project from EU funds.

Among the proposals are the possibility of compensating receivables between companies for preventing chain illiquidity, speeding up the determination of bad loans, speeding up bankruptcies and the liquidations of companies, additional (non) tax relief or their abolition, and more tax relief for investments.

"We believe that the government measures introduced as a result of the coronavirus crisis should continue as long as we have enterprises who cannot function and preserve jobs on their own without assistance measures," the association of Croatian employers concluded in their request to the Finance Ministry.

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ZAGREB, 25 May, 2021 - The Croatian Employers' Association (HUP) has proposed measures for maintaining liquidity and launching private investments which include retaining jobkeeping measures and covering a portion of fixed costs, ensuring favourable loans and prolonging loan maturity.

In expectation of COVID measures and lockdown of businesses being lifted, HUP addressed Finance Minister Zdravko Marić and underscored that maintaining liquidity is not only relevant during the lockdown period but should be extended for a longer period, and that recovery can only be possible if investments are boosted.

HUP proposes that jobkeeping measures be extended even after busines restrictions are lifted until such time that  all enterprises generate at least 90% of their pre-pandemic revenue in 2019. HUP believes that abolishing support measures for the economy should be gradual, depending on the epidemiological situation, but also on the circumstances in each individual sector so that Croatia is not faced with a wave of bankruptcies and layoffs.

HUP also calls for a portion of fixed costs to continue to be covered, taking account of the percentage revenue has decreased, and for facilitating access to loans for liquidity and working capital, including guarantee schemes for micro, small and medium-sized enterprises.

HUP advocates possibly transforming a portion of loans into grants and for the moratorium on loan maturities to be extended for existing loans, along with state guarantees, at least until the end of this year and longer if need be, based on transparent criteria.

HUP proposes additional support loans for exporters and enterprises investing in the 4.0 industry, and support for investments by large companies through increased support for EU co-funded projects.

It also recommends the possibility of deleveraging debts between companies to prevent a chain reaction, and for non-recoverable loans to be identified faster, as well as speeding up bankruptcy procedures, and introducing additional tax cuts.

"We believe that government subsidies to cover the disrupted economic activities due to the COVID crisis should continue until such time that enterprises can do business normally and save jobs without that support," HUP said.

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ZAGREB, 5 March, 2021 - Brussels will leave it to Zagreb to decide on how to distribute money from the EU Recovery Fund, the Friday issue of the Jutarnji List daily reports, noting that there are no restrictions on aid to enterprises. 

There are no strict limits in drafting the national recovery and resilience plan, through which around HRK 45 billion of EU funds will be made available to Croatia to help it recover from the crisis caused by the coronavirus pandemic, in terms of how much funds can be allocated for public investments and how much for private investments, as there is no such distinction in EU regulations.

This conclusion is based on a reply from the European Commission, after the Croatian Employers' Association asked that at least 50% of the available money be disbursed in direct grants for investments by the private sector, instead of spending most of the HRK 45 billion on investments in the public sector.

According to an interpretation presented earlier by Croatian negotiators and published by Jutarnji List, entrepreneurs would have access, through the National Recovery and Resilience Plan, to direct grants and loan subsidies and guarantees in the maximum amount of HRK 4.5 billion, or only 10% of the available amount. In citing the amount, Croatian negotiators referred to restrictions imposed by the EC.

Zvonimir Savić, PM Andrej Plenković's advisor and national coordinator for the National Recovery and Resilience Plan, has nonetheless said that around 30% of the HRK 45 billion could end up in the private sector, if one takes into account the involvement of businesses in planned public projects, from research and development, energy transition and development of innovative tourism to stronger food supply chains, the daily says.