This week, the Croatian Government announced plans for potential changes to the holiday calendar as we currently know it, and Vukovar could be set to get its very own day.

As Poslovni Dnevnik writes on the 7th of October, 2019, the subject of a potential new holiday would be Vukovar, Croatia's hero city. The draft law that would put things into motion for a state holiday in the name of Vukovar has now been finalised, and the city's residents have been waiting for it for a long time, N1 writes.

Three years after the Croatian Government began toying with such an idea, the draft law has now finally been completed. Defense Minister Tomo Medved has now confirmed it as such. However, the minister hasn't revealed any new details, but it looks like Memorial Day could soon become a national holiday in Croatia. It also seems that the draft law does not define what many in Vukovar expected - bilingualism.

"In this way, people who have experienced trauma in Vukovar, the suffering, Croatian veterans and all others - can be sure that nobody will forget about it," said Ljiljana Alvir from an association which deals with the families of missing persons, of which there are many in the case of Croatia's famous hero city.

''The draft should see the light of day soon. The only problem is that it was promised during a government session in Vukovar back in 2016,'' explained Medved.

"The adjustments were related to the holidays, ie, the calendar of holidays, and I believe that we'll soon release the law on Vukovar and the law on regulated holidays into public procedure. You have had the opportunity to hear from the Prime Minister, he announced certain changes to the law on holidays, and this law is directly related to that law, "claims Croatian Defense Minister Tomo Medved.

The minister so far doesn't want to confirm directly whether or not this means that the Day of Remembrance of the Victims of Vukovar, which is celebrated on November the 18th every year, will become a public holiday, but unofficial information indicates that everything is going in that direction.

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''This is just the very beginning of a strategic reflection on the future of our tourism and hospitality industry,'' state the majority of those working in Croatia's hospitality sector when referring to the Croatian Government's decision to slash VAT in the hospitality sector down to thirteen percent.

As Poslovni Dnevnik writes on the 26th of July, 2019, the co-ordination of Croatian Hospitality Workers welcomes the government's announcement that it will reduce tax on business operations by reducing VAT on food preparation in the hospitality industry from 25 down to a much more reasonable 13 percent.

''The goal of reducing the rate for us is the beginning of creating conditions for increasing wages for workers in the hospitality industry. The departure of high-quality and skilled labour, and when we say that we're referring to the domestic workforce, is one of the biggest problems of hospitality and tourism in Croatia and that's why we have appealed so much to the government for such reductions,'' they stated.

''We'd like to say thank you to the Croatian Government and to the Minister of Finance, Zdravko Marić, for announcing a reasonable decision that will save us at the very last minute. The difference that will remain with us by reducing VAT will be redirected to employee salaries and we intend to negotiate this with trade unions intensively, because we want to formalise everything through collective bargaining.

In addition, we plan to redirect this money to buying domestic, quality and non-imported food products and to further raise our services at all levels,'' said Vedran Jakominić, President of the Primorje-Gorski Kotar County Hospitality Association.

"Now is the time for a strategic reflection on the future of Croatian tourism and hospitality, and the adoption of measures for the general social benefit in cooperation with the institutions. It's time for the money that will remain us to be used reasonably for the employment of Croatian people. We need to educate our hosts, our members, to bring our services up to the highest level. We're grateful to the government for the fact that they have heard and acted on our appeals, and now it's up to us to show what we know, and do that on the market,'' concluded Marin Medak of the aforementioned association.

Follow our dedicated lifestyle page for much more. Follow our politics page for more information on the VAT rates in Croatia.

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 Morski writes on the 21st of May, 2019, the new Orbiter 3 is MORH's new means for the country's Homeland Security system, and will be used for by the Ministry of Defence of the Republic of Croatia and the Ministry of Agriculture of the Republic of Croatia.

MORH states that their aircraft will be used in early fire detection, in the control of waterways and roads, support in crisis situations, and for support in the control of the country's borders.

The Orbiter 3 drone weighs 30 kilograms, its flight range is 150 km and it can be in the air for as long as seven hours, and when descending, a parachute is released. Its wingspan is 4.4 metres wide and it can cruise at 130 kilometres per hour.

The unmanned aircraft was first introduced to the public during the Paris Air Show back in 2005. It is made entirely of carbon composite and is powered by an electric motor, in addition it is equipped with an optical and an infrared camera, and data link and navigation systems (GPS and INS).

What is also interesting to note is the fact that the Serbian army acquired ten such Orbiters eleven years ago, In addition to Serbia and Israel, these Orbiter drones are used by Azerbaijan, Finland, Ireland, Mexico, Peru, Poland and Uganda.

Although the Orbiter 3 prototype was first introduced back in 2011, there have been improved versions of its two predecessors (in addition to the camera, a laser sight has also been added), MORH did not publicly disclose the characteristics of the camera itself on this particular version. The manufacturer has rather vaguely written that it boasts a "high definition camera", but whether or not that is in reference to 2019's standards, we don't know.

These drones should also control fishing in the Adriatic sea, and a contract worth 4.88 million euros with the Israeli company Aeronautics was signed by the Minister of Agriculture Tomislav Tolušić back in May 2018.

View MORH's new drone footage here:

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Celebrated Croatian entrepreneur Mate Rimac discusses Rimac Automobili's new partnership with Hyundai and Kia Motors, how he plans to give a certain percentage of the company to its employees, revenue, the future, and more.

As Jutarnji list/Gordana Grgas writes on the 14th of May, 2019, after it was announced that the Hyundai and Kia Motors had decided to invest a massive 600 million kuna in capital into Rimac Automobili, Mate Rimac announced in an interview for Jutarnji list that he would give seven percent of the company to his employees, from the cleaners to the directors.

We're bringing you the English translation of that interview here.

Why has Rimac Automobili entered into a partnership with Hyundai?

"We've been in contact with them for a couple of years and have been cooperating with them for a few years. They sent a strong delegation to us and, as soon as they saw the company, as soon as they saw what we were doing, they decided to invest immediately. In October last year they gave us an offer and we entered into negotiations. To have a partnership with such a company is very important for us. When looking at comparisons, they have a revenue of 250 billion euros, which is four times more than the Croatian GDP, and we're also working directly with the administration. Euisun Chung, who was there upon signing the contract, is the executive vice president, the grandson of Hyundai's founder, who's now taking over the firm from his father.

We're quick, small and innovative, we see and create the future and that's very interesting to them, this is hugely important for us because, on the one hand, we've got the Volkswagen Group and Porsche, and then we've got Hyundai and Kia on the other, and we've been so busy with work with these companies that we don't know where we're going!

The best thing is that they're not just buyers of our products but also shareholders, therefore it's in their interest that the company succeeds. They will help us build faster in areas where we may have some weaknesses, for example in industrialisation, in the transition from small-scale to large serial production.

Today, we're dealing with very complex systems for large car manufacturers, power systems, batteries, electronics, etc., we've achieved all that very quickly, but we need strategic partnerships. It's very difficult, especially moving from small to large series. We need money to help the company achieve its goals. We invest a lot, we're constantly expanding our plants, we employ more than 500 people, more than 300 engineers... We're not like the others, we're not wired money from the state but we get our money on the international market, and there's nowhere better to find money than with a company that really understands what you're doing, which is a partner and also a buyer,'' stated Mate Rimac.

What's the ownership structure of Rimac Automobili like now? You said you wouldn't remain the majority owner...

"Now I have .. (looks at his phone) Just a second, I have all of that in a document..."

Do you not know what your share is now? Does that not matter to you?

''Well, that's not important to me. People don't really understand that. I'm killing myself with this job and I'd be the happiest man in the world if there was someone who could run the company better than me, so I could just do what I like doing, the technical part of things. Now I'm the executive and technical director, and now I hold 47.7 percent, the Chinese camel group holds 14 percent, Hyundai has 11 percent, Porsche has 10 percent, Kia has 2.7 percent, and the remaining shares belong to the investors from 2012 and 2013.''

Are the employees among the co-owners?

"No, but we're working on that now, all of the employees will get a share, up until now, the ESOP was not worth it for them because of the tax. They'll probably get seven percent, from the cleaners to the directors, but not everyone will get the same share.''

How much is Rimac Automobili worth now?

"More than 500 million euros."

Why did not you not get to capital through an IPO, on the stock market?

''A lot of technology companies are now doing IPOs and they're actually losing money, they still have no stable and profitable business. Let's say Lyft, Uber or Snapchat... I don't want that. I want to make an IPO when the company's numbers are at that level. The company's potential is huge, and we have now used a piece of it and it's a shame to go out out onto the stock market with this company's situation. In 3-4-5 years, it will be at a completely different level. Besides, we have good access to capital outside of the stock market, we've got that luxury.''

How much was Rimac Automobili's income last year?

''I wouldn't go into income, there are no final reports yet. That's not our focus either, but a long-term trend. Here's an example - the car that we're developing for Hyundai now goes into serial production in 2023 only. Those are the cycles of our projects and to us, as well as to our shareholders, it's really neither here nor there what the financial outcome will be for this year or for next year, we're building a long-term story.''

Are you making a profit or are you still in the minus?

''We were still in the minus last year because we invested a lot. It's important to note that this minus comes from shareholder money, and everyone agrees that it's the company's plan.''

What will you specifically use this 600 million kuna for?

''For many things. This is part of our C investment round, and we'll still have investors in this round for another 70 million euros, but we don't know who that will be for now, but they will probably be financial investors. One of the things we will invest in is building our campus, our development and research centre and our factory, and another company expansion, employing a lot of people and equipping the company. For the transition to serial production, it's necessary to equip our production plants, test our products, develop them right up to the end, certify them... It's a big thing.''

Where will the new campus be? And what will be there?

''We're planning a campus for 2000 people because we want to have a longer-term solution. The headquarters of the company will also be there, as well as the development and research centre, production, testing, there'll be a hotel for guests and employees coming from elsewhere, kindergartens for employees' kids, restaurants, food production, hairdressers, sports facilities... I want it all to be integrated there.''

Where will this be located and when will you embark on construction?

''Near Zagreb. The location hasn't yet been agreed, we're look at a few of them, we're negotiating. Construction should start early next year.''

I guess the campus will be a little special in the aesthetic sense.

''Nine international and several Croatian architectural studies are currently working on suggestions for conceptual solutions for the campus. Among them was Lord Foster (British architect Norman Foster), we had a meeting the other day. He worked on Apple's campus and many other world-famous buildings. Everyone is so excited about this project and offering some great suggestions. They tell me that there's no such thing anywhere else, the combination I want - the campus being open to the public, the care for the employees and the connection with nature.''

The serial production of your C-Two has been announced for next year. Where are you going to do this?

''We got a hall in Veliko Trgovišće (Krapina-Zagorje County). The C-Two prototypes are still being done in Sveta Nedelja, and when we finish them, we'll move the manufacturing of the prototypes to Veliko Trgovišće. We already produce the batteries and the power systems there because we're out of space here. We're now there in five buildings and we were looking for something a bit closer to Sveta Nedelja, but there was just nothing there. Since there is no industry in Croatia, there's not much out there to rent. So now we're in Veliko Trgovišće, and we have centres in Split and in Osijek.''

Why did you open them there, so scattered apart?

''We grew so quickly over the last year. We now have fifteen engineers in Split, and about ten in Osijek, ane they're now our competence centres - in Split, we do our own automotive software development tool operation, and we deal with our high voltage chargers in Osijek.''

The prime minister has never been in your facility?

''No, never. To make it clearer, I don't ask for anything from the government. All I do is to urge the government to do the right thing to bring the car industry to Croatia. I have proved that it's possible.''

Make sure to follow our dedicated business and Made in Croatia pages for more information on Mate Rimac, Rimac Automobili, entrepreneurship, manufacturing, production and business in Croatia and much, much more.

Click here for the original interview/article by Gordana Grgas for Jutarnji list

If the China Shipbuilding Industry Corporation (CSIC) gives up, it will be difficult to find another candidate for the ailing Croatian shipyards Uljanik (Pula) and 3 Maj (Rijeka) which is in the shipbuilding industry and is also a strong and respected player. Could a Chinese investment be on the cards?

As Poslovni Dnevnik/Suzana Varosanec writes on the 29th of April, 2019, after yesterday's meeting with Prime Minister Andrey Plenkovic and his government ministers, Hu Wenming, Chairman of the Board of China's largest shipbuilding company China Shipbuilding Industry Corporation (CSIC) confirmed that they are indeed moving towards serious consideration regarding the enfeebled Uljanik and 3 Maj shipyards, which have undergone months of turmoil.

''The prime minister gave us a very serious and detailed presentation of the whole situation,'' Wenming said, adding that they saw that these two shipyards were a very important topic for the Croatian public. "Not only did we bring people from our company - they're in charge of planning, we've already called on lawyers and investment banks, so we will outline what their views on the matter are after visiting the shipyards," Wenming stated.

With that, a key ''tour'' begins, because if CSIC ends up actually not being interested in putting its money into the situation, it will be a hugely difficult task to find another candidate in shipbuilding, which is a big player and has an interest in joining the European shipbuilding industry. Otherwise, this would be the first case of a Chinese takeover of a foreign shipbuilding company, so it is speculated that extensive calculations are being made, and of course whether they even want to have their first European shipyard is being considered. The CSIC is looking at the situation deeply and from all possible angles.

This event all began with the recent announcement of the arrival of the CSIC in Croatia with the aim of visiting the troubled shipyards in Pula and Rijeka. As was then announced, the CSIC chairman contacted Chinese Prime Minister Li Keqiang during his stay in the Republic of Croatia where he attended the summit "16 + 1" and after talking with the Croatian PM about the dire state of Croatian shipbuilding.

As things currently stand, the general belief is that the Chinese decision won't take long to come - it will be a simple and express "no" or "yes", while the third option, more specifically an unconditional "yes", will likely need to be waited for a little longer.

What the outcome of the potential Chinese presence in the Croatian shipbuilding industry is anyone's guess, and while some remain very suspicious of Chinese motives in Croatia in general, despite them already working on the long-awaited Pelješac bridge down in southern Dalmatia, whatever comes of their potential entry has got to be better than the current situation, especially for Uljanik.

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Click here for the original article by Suzana Varosanec for Poslovni Dnevnik

As Mirela Lilek/Novac writes on the 27th of April, 2019, Croatia's situation still isn't good: the country is continuing to ''produce'' graduates with the third lowest employment rate in the whole of the European Union, and as a result, taxpayers pay more and more money for them. According to new data from Brussels, based on a comparative survey of youth employment among Croats with diplomas earned in the last three years, a third of highly educated people aged between 20 to 34 in Croatia have no jobs. Only Italy and Greece are worse.

Of the 28 countries EU member states, Croatia ranked 26th with a 66 percent employability rate. Four positions above Croatia lies Romania, Bulgaria is six places above, and Slovakia is nine places above. Croatia's neighbour to the north, Slovenia, is eleven places above Croatia, Poland is thirteen places above (impressively right behind Ireland and Denmark), and the Czech Republic, with an 89.9 percent employability rate which has impressed the European Commission's experts - has risen to an enviable fourth place.

Malta is in first place in Europe as an employer of its graduates with diplomas, the employment rate of Maltese students stands at a very impressive 94.5 percent, even better than Germany, which boasts a rate of 90.9 percent, followed then by the Netherlands, the Czech Republic, and then Austria. The EU average is on the rise, back in 2014 it stood at 76 percent and in 2018 it stood at 80.2 percent. Unfortunately, the Croats have been close to the bottom for years, more specifically for fifteen years, as it has a below-average rate of employability in relation to the EU. Of course, rather than attempt to fix the problem directly, the Croats are doing what the Croats always do - continuing to debate and argue over who is (more) to blame for such embarrassing conditions.

Economists see the issue as being that the Croats aren't adapting easily to the market, and that Croatia also has an old education system. At Croatia's universities, they argue that the key issue isn't Croatia's higher education institutions, but an underdeveloped labour market, low personal income, and demotivating working conditions. Experts from the European Commission have given a relatively simple answer: Investing in education will benefit everyone in Europe.

Let's see how they explain their theories in some of the country's universities, starting with the largest "producers" of graduates in the entire country, the Faculty of Philosophy and Economics in Zagreb.

''We're aware of the importance of linking study programs and labour market needs. In this regard, the Faculty of Economics makes an effort to make it easier for students to access the labour market by establishing multilateral cooperation with companies and respectable institutions that enable students to perform high-quality professional practices,'' stated Sanja Sever Mališ, who deals with strategic partnerships and projects at the Faculty of Economics in Zagreb. The basic message from this particular Zagreb university is that "they connect students and employers so their best students can find work even during their studies." Therefore, there is no concern for them.

On the other hand, Vesna Vlahović-Štetić, Dean of the Faculty of Philosophy, admits that Croatia's humiliating placement at the bottom of the employability scale of graduates is still something to be very concerned about and therefore the causes of that need to be looked at.

''I assume that part of the problem lies in insufficient development and the ability of the economy and the public sector to absorb newly graduated students. On the other hand, the question is how many colleges and higher education institutions meet the needs of society with their respective programs. At the state level, in some professions there's hyper-production, and in others there is a lack of experts. Additionally, study programs should be regularly updated and developed to meet not only society's needs but also predict what competences professionals will need in the future,'' the dean says.

Data obtained through the HKO project of the Faculty of Philosophy shows that the employability of their students in the year after graduation is 75 percent. They believe this is the result of "the excellent professional and generic competences of their graduates".

"We're convinced at the Faculty of Philosophy that the study programs need to be further improved, so we have just started the study reform process and I'm sure the future employability of our students will be even better," says the university's dean.

The rector of the University of Rijeka, Snježana Prijić Samaržija, doesn't want to run away from the fact that Croatia's universities do hold a share of the responsibility for this issue but, again, she's convinced that Croatia's higher education institutions are't the key cause of the problem, but the underdeveloped labour market definitely is.

Rijeka University has eleven faculties and four departments. On their official page, they point out that they are a modern European university and a centre of excellence within the region and beyond, and that they are responsible for the social and economic development of the community. Samardžija claims that she doesn't want to relate the worrying data on the high rate of unemployed with higher education, but that "it should be borne in mind that higher education is a better job-finding guarantee, such as landing a permanent position,"

"Of course, it's possible to say that the employment rate would be higher if universities, by some automation, increased their quotas for the job-type deficit and reduced those profiles for which the employment bureaus take care of. In that sense, people often say Croatia's institutions and their enrollment policies aren't adapted to the labour market. However, the situation isn't quite that simple.

For example, the market seeks shipbuilding engineers, we have shipbuilding studies and a corresponding quota at the University of Rijeka, but there's a fall in interest for those studies. We can understand the students' fears about the situation with Croatia's shipyards, but the fact is that the need for this profession is still growing. Similarly, despite the lack of mathematics and physics teachers and the excellent studies we have, the interest doesn't match the employment opportunities,'' she explained.

The University of Rijeka decided to put seven studies ''into retirement'' this year, and isn't accepting students for them. Those are acting and media, dental hygiene, computer science in combination with professional studies of medical-lab diagnostics, mechanical engineering, shipbuilding, and electrical engineering.

On the other hand, there's a considerable level of interest in studies that don't guarantee quick and permanent employment at all, such as the arts, cultural studies, and psychology.

''Young people choose studies according to their personal interests, not just employment opportunities. They don't necessarily just want a permanent job, many of them are accustomed to gaining work experience in different institutions, at different places of work, and in different countries. More and more, they prefer to individually define the curriculum through courses and practical competences beyond their study program(s), which will make their expertise comparatively more special and desirable. In the midst of a sluggish and non-ethnological labour market, more and more students enjoy prolonged youthful relationships with their parents or rent apartments,'' says Snježana Prijić Samaržija.

"I don't want to run away from the responsibility of the university, we're constantly thinking about the jobs of the future, we're working on increasing the quota for the deficit professions and improving our students' competences to reduce the unemployment rate. However, time is needed to see the results of these measures because the higher education cycle lasts for at least five years. It should be understood that universities can't just simply increase quotas for occupations for which there's a labour market need because new employment is frozen,'' noted the Rector of the University of Rijeka.

As Croatia's paradoxical situation of having no work but plenty of jobseekers, yet plenty of work and no staff, it's hard to predict the outcome of education system reforms as the market and its needs can alter so rapidly. Will Croatian students simply continue to trickle away on the stream of a proverbial leaking tap out into Western Europe, leaving Croatia with the rather unenviable title of a country that educates its citizens for work abroad? It's likely such a scenario will continue at least for the foreseeable future. Whether or not Croatia will manage to make the necessary alterations to fix that aforementioned ''leaky tap'' in time remains to be seen.

Make sure to follow our dedicated lifestyle, politics and business pages for much more.

Click here for the original article by Mirela Lilek for Novac/Jutarnji

As Lea Balenovic/Iva Grubisa/Novac writes on the 17th of April, 2019, Croatian tourism's current business model is unsustainable and has some serious challenges, according to Emanuel Tutek, a partner at the Horwath HTL consulting house, who stated this at the very beginning of a conference on the challenges of the Croatian tourism sector at Edward Bernays High School, the co-organiser of which was Jutarnji list.

Since 19 percent of Croatian GDP comes either directly or indirectly from tourism, the unsustainability of the system is a more serious issue, he added.

''First of all, our tourism is an extremely seasonal sector and as much as 86 percent of all tourism activities in Croatia take place during the summer months. It's also problematic that 96 per cent of these activities are realised on the coast and in Zagreb. In translation, this means that we have plenty of room for progress and the development of our tourist offer across the rest of Croatia, as well as the extension of the season. We are well below the European average. For example, if we compare just the peak of the tourist season, ie July and August, there is 10 to 20 times more of a burden on the area and the residents in Croatia than there is in other European countries. Just remember how some of the destinations and beaches look in July or August,'' warned Tutek.

He also added that Croatia has plenty of room for progress and development in the quality of the accommodation it provides. The Croatian hotels that, as Tutek says, are the pearl of Croatia's hospitality, are very much losing the battle with the hotel industry in the rest of Europe, and the alarm that should be enough to wake the country up is also the fact that the revenue made from tourists' overnight stays in Croatia is less every year.

In addition to this, Croatian tourism is feeling the country's ongoing demographic crisis bite hard, and has a human resource problem as a consequence. This is, as was explained by Tutek, actually a global problem. However, since the international labour market is far more competitive than the Croatian one is, foreign countries are filling their gaps with Croatian workers. Croatia is, unfortunately, at an unimpressive 100 of 138 countries in the world according to the labour market competitiveness index. An even more concerning piece of information shared by the Horwath HTL consultant was that Croatia is the last and second to last in the world on the ladder of attracting and retaining workers.

''We have no solution. The answers to this can't just be some lump sums and other initiatives, we need something more fundamental,'' he warned. One of the negative factors in each case is the uncompetitive average salary. In nearby Austria, for example, in the hotel sector, wages are about 122 percent higher. Still, the hotel industry here in Croatia has experienced a great discrepancy in numbers, and they have therefore begun to increase employee salaries for the last two summer seasons, which has been a fruitful decision. With the rise in salaries and expenses, revenue also grew.

In addition to the inadequate management of human resources, huge problems are also created by the Croatian tax policy. Property tax, Tutek said, practically doesn't exist in Croatia. ''We're the champions of how good private landlords have it. Croatia is a tax oasis,'' he claims.

''We want to be competitive, but there are a number of things that we're not even close to, not even in the wider environment. VAT reduction is certainly important, and there is also the question of consistent policies. It is important for us to have a perception of what will happen in the future at some point, but if the policies constantly change then we can't have a stable business,'' said Sanjin Šolić of the Lošinj hotel group Jadranka.

Davor Lukšić, President of the Lukšić Croatia Group, agreed with him, pointing out that Croatia's 25 percent VAT rate is very high, and even with a rate of 13 percent there would still be room for progress. "We have to remain competitive, especially now when other destinations in the Mediterranean are making a come back," Lukšić added.

But if one was to as Croatian Tourism Minister Gari Cappelli, the problem of the high VAT rate is one of the easiest problems to solve in the Croatian tourism industry. The minister claims that the Croatian Government could lower the VAT rate with one decree, bringing it down to 10 or 13 percent, and such a decision is in the government's plans for the beginning of next year.

''We have a problem with having five-star hotels in two star destinations. First of all, we have to start improving the quality of the destination and spend the whole year measuring what's happening and only after a few years will we see whether both residents and tourists are happy, as well as service providers and the environment. If everyone is more or less happy, then it makes sense to invest in a four or five-star hotel,'' stated Minister Cappelli, adding that in Croatia, it often happens that investments are made in luxurious hotels first, but not in the development of the destination in which it is located.

"Well, we have cases where five-star hotels don't have sewage systems but septic tanks," he said. The minister also referred to the initial lecture by Emanuel Tutek about the key challenges facing Croatian tourism. He agreed that there was always room for progress, but he also pointed out that he was tracking the figures daily and that he couldn't bring himself to agree with all the alarming warnings about the unsustainability of Croatian tourism.

''We're a strange people, two years ago there were no tourists and they wanted to get rid of me, now there are a lot of tourists, and they want to get rid of me again, the projections of what's to come in two years keep coming in, and they're already that I'm shaking in my chair,'' said Cappelli, adding that Croatia is spending what it earns and has therefore finally got an investment rating.

''Now the pressure on public finances is being relieved and the taxes on the economy can be reduced slowly,'' he said.

If the Croatian tourism association is asked for their opinion on the matter, this is last chance saloon for this tax relief to actually become a reality. Namely, it is anticipated that hotels could reduce the volume of their investments by as much as thirty percent over the next three to four years. ''We want to warn the government that it must not let that happen. We have to invest, but we expect that the government to create measures to encourage that and not just put us off,'' said Jadranka's Sanjin Šolić.

Dubrovnik has experienced not only growth in terms of tourism but also the improvement of infrastructure in recent years, Lukšić believes. However, despite the wild popularity of this particular southern Croatian city, it has multiple problems during the winter season.

''In the last two years, we have extended the [tourist] season and the so called ''congress season'' has helped a lot. But we all have to sit around the table and design a strategy for the winter season, which is actually the only problem,'' Lukšić said, arousing a grin from Šolić, who, having being on an island, has much bigger problems.

''It's easy for Dubrovnik. Imagine how it is for us to extend the season! You need to get to the island, the bridge is a problem, the bura is a problem, everything is a problem. We're less competitive than our colleagues on the mainland whichever way you turn. The Chinese, the Koreans, whoever comes to Croatia, lands in Zagreb, goes to Plitvice, Split and Dubrovnik, nobody comes to us,'' complained Sanjin Šolić.

That is why his team sat down together at the table and decided to turn to health tourism for which Lošinj has natural resources, a strategy and a future, said Šolić. Another solution for the development of island tourism is golf. Therefore, a location permit is currently being sought for the construction of a golf course with eighteen holes, with which will be a hotel and villa that will have a total of 800 beds.

''These are the two routes we have on Lošinj. People don't play golf in July and August because its too hot. During November, December, January, February and March, the weather is wonderful and we'll fill our capacities that way,'' he noted.

Emanuel Tutek welcomed this discrepancy in Croatia's tourism development strategies at various locations.

''Not all destinations are suffering the same issues. In Dubrovnik, there is a problem with excessive demand, and the quality of the offer needs to be worked on to reduce the number of tourists. In Istria, the offer should be increased. This has, for example, been done in Maistra. Nobody thought it would pay off to build a five-star hotel in Rovinj, but after the construction of the hotel, the rest of the sector was accompanied by the arrival of tourists and the development of the destination.

However, in addition to the respective issues destinations face in Croatia, the eternal problem facing the entire Croatian tourism sector is labour and wages.

''Salaries are a problem, they're still a base for attracting workers,'' said Tutek, agreeing with the CEO of Jadranka, but as he said, it's difficult to increase salaries because there isn't enough revenue.

"When the minister sorts us out with less taxes, I'll give the rest of it in salaries," he stated.

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Click here for the original article by Lea Balenovic and Iva Grubisa for Novac/Jutarnji

Despite the odd investment here and there, continental Croatia rarely gets a look in when compared to the coast, particularly when compared to Dalmatia. In Eastern Croatia, more specifically Slavonia, the situation is even more depressing, but it seems that not everything is as bleak as we sometimes like to imagine and even portray.

As Suzana Varosanec/Poslovni Dnevnik writes on the 16th of April, 2019, the economic expectations from the Luka Brod (Brod Port) project worth more than 100 million kuna are high. Through the construction of new port infrastructure, the project has become the driving force for the development of Brod-Posavina County, as was highlighted by the Croatian Government.

As stated, the much anticipated construction of new port infrastructure is the driving force for the development of this Slavonian county, this was highlighted at the eighth session of the Council for Slavonia, Baranja and Srijem, and according to the prime minister, it's essential for the Croatian Government and local self-government units to do everything to create the proper conditions for economic development that will end the mass exodus of citizens from Croatia.

Until now, contracted projects with EU funding amount to 9.7 billion kuna, stated the Minister of Regional Development and EU Funds, Gabrijela Žalac. Another 1.85 billion kuna are contracted investments from the state budget.

For the strengthening of the Croatian economy, the development and enhancement of competitiveness, projects such as Brod Port are of great importance, stated the Croatian Chamber of Commerce's Mirjana Cagalj. This is also an incentive for the development of a local environment that is particularly burdened with the exodus of the resident population who are leaving in their droves owing to the unfavourable economic situation, contributing to Croatia's worrying demographic crisis.

Its exceptional traffic position provides great potential for the development of the new port in Slavonski Brod in an intermodal logistics centre, which, according to Cagalj, would work to influence its future strategic role in international container traffic because Brod Port is located on the border of Croatia and Bosnia and Herzegovina, near the crossing of the railway corridor X and the road corridor Vc, which is an international entry port for the EU.

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Click here for the original article by Suzana Varosanec for Poslovni Dnevnik

As the Chinese show greater interest in various Croatian strategic projects, the EU and the EC become more and more uneasy at the thought of such a heavy Chinese business presence in Croatia. As the EC changes its attitude towards some Croatian projects to which it reacted negatively in the past, has the Chinese influence rendered this change of heart senseless?

As Novac/Kresimir Zabec writes on the 13th of April, 2019, Croatia wants to finance the construction of the railway line from Karlovac to Rijeka, covering a length of 170 kilometres with EU funds, because that's more favourable to Croatia than doing it through a concession, stated Croatian Minister of Transport Oleg Butković at the construction site of Pelješac bridge recently.

Ironically much like Chinese whispers, it began to circulate in the media that everything had already been agreed with the Chinese, and that China's CRBC which is already building Pelješac bridge would construct the railway line via a concession model. Economy Minister Darko Horvat has thus announced giving the Chinese company a fifty year concession. However, Butković has very clearly stated that there has been absolutely no direct agreement with the Chinese and that everything will go through a tender, as usual.

''If we decide on a concession tender, then Chinese companies can also apply. If the line is built using EU funds, Chinese companies will be able to bid to be the contractors for the project,'' said Butković.

EU funding for the project is much more favourable for Croatia because it doesn't affect the growth of public debt. Should the case result in giving a concession to a Chinese company, they would build and finance it, but with government guarantees amounting to 1.7 billion euros, which is something the state can ill afford. According to current projections, the entire line should be completed by 2030.

Of the 270 kilometre of railway line from Botovo on the Croatian-Hungarian border, to Rijeka on the shores of the Northern Adriatic, the section from Karlovac to Rijeka is currently not covered at all by any form of EU co-financing.

A few years ago, the European Commission told the Croatian Government quite clearly that they would not finance that part of the line from Karlovac to Rijeka because it was too expensive and it just doesn't pay off. After that, the Croatian Government turned to the Chinese who were constantly showing interest in constructing that section. Now that the negotiations between China and Croatia have entered a much deeper and more serious phase, signals from Brussels, more specifically the European Commission, have been arriving which indicate that they are, despite all, still interested in the project.

Although that railway line is not officially part of the trans-European transport network, senior officials of the European Commission's Directorate General for Transport have openly told reporters that the Commission is ready to co-finance this project, and that it is a very important part of the European budget planning in the period commencing in 2021. Quite a turnaround, no?

In addition, this railway line is part of the line from Rijeka to the Hungarian border, which the European Commission has invested around 400 million euros into the modernisation and construction of, and that obviously doesn't quite sit well with the idea of the entrance of the Chinese into this project. According to statements, the ultimate goal of the overall project is to build a new bridge to the island of Krk and to build a new port on the island for container transport, which is an idea that the Chinese are also very interested in.

What stage are the works in?

Rijeka - Zagreb

The railway line from Rijeka tp Zagreb to the Hungarian border is part of the international Mediterranean Corridor connecting southern Europe with Central and Eastern Europe. The modernisation of this line would be of great importance to the Port of Rijeka. The modernisation and the construction of these lines are all in different stages of execution.

Botovo - Koprivnica - Križevci

In 2016, the European Commission approved 240 million euro for Croatia to build this section, but the contractor for the job hasn't yet been selected. A tender is in progress, but it has been stopped once again due to an appeal lodged by an Italian company.

Križevci - Dugo Selo

This is the only section of the track where works are ongoing. The European Union has invested about 180 million euros in this project, but works began a year and a half late because of contractor issues.

Hrvatski Leskovac - Karlovac

The design of this part of the line was co-financed by the EU in the amount of about 6 million euros. It is expected that tenders will be announced to modernise the existing works and build another track. The value of the works is estimated at 315 million euros and is planned to be funded through EU funds.

Karlovac - Oštarije

An entirely new two-track railway would be constructed on this part of the track, and the value of the works would be estimated at about 400 million euros. Project documentation has been produced, which has been paid for by the EU in the amount of 9 million euros.

Oštarije - Škrljevo

This, which is considered to be the most challenging part of the line, hasn't yet been fully defined, and technical documentation is being prepared by the EU, for which it has paid nearly 6 million euros. The value of the works on this section is estimated at as much as one billion euros.

Škrljevo - Rijeka - Jurdani

Project documentation was produced by the EU at a cost of 8.5 million euros. The value of the works is estimated at 270 million euros in total.

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Click here for the original article by Kresimir Zabec for Novac/Jutarnji