ZAGREB, 6 July 2022  - The news of Finance Minister Zdravko Marić's unexpected resignation on Tuesday was followed by the first reactions of opposition politicians who in their comments told Prime Minister Andrej Plenković that the time was ripe for new parliamentary elections.

Social Democratic Party (SDP) political secretary Mirela Ahmetović said in a Twitter post that "the last time Marić resigned, his boss fled the country and the company folded," a reference to former Agrokor company owner Ivica Todorić.

When the most popular minister leaves, that means the government has fallen and Plenković just does not want to admit it. Enough of this agony, let's go to elections, Ahmetović said.

Bridge party vice-president Nikola Grmoja said in a Facebook post that "the first officer of Plenković's Titanic, holed by corruption, scandals and inflation, is fleeing."

If health reasons are not the reason, and I hope they are not, there are only two options - either he has found himself under investigation - he was involved in many scandals which, admittedly, left him unscathed - or he is leaving the government aware of the kind of economic Armaggedon that is about to hit us, Grmoja said, calling for new elections.

The head of the parliamentary committee on European affairs, Domagoj Hajduković of the Social Democrats, also commented on Marić's decision.

"I wonder if 'personal reasons' have to do with the implementation of euro introduction about which I have been warning for some time. True, we got a positive decision, but someone must also implement it, and we are very irresponsible in that regard," Hajduković said.

Other comments by opposition politicians were announced for Wednesday.

Also, Prime Minister Andrej Plenković will inform the inner cabinet and parliamentary majority of Marić's decision and introduce Marko Primorac as the candidate for his successor. Primorac's nomination will be discussed by the parliament as early as next week.

For more, check out our politics section.

July the 5th, 2022 - Croatian general government debt now stands at a whopping 342.5 billion kuna, according to what was calculated back during the month of March this year.

As Poslovni Dnevnik writes, the Croatian general government debt calculated back at the end of March this year amounted to 342.5 billion kuna, which is 1.1 billion kuna or 0.3 percent more than just one year earlier, according to the latest data from the Croatian National Bank (CNB/HNB).

The annual increase in Croatian general government debt was caused by an increase in domestic debt by 4.1 billion kuna or 1.9 percent and a decrease in foreign debt by 2.5 billion kuna or 2 percent. Looking at these enormous figures a monthly basis, the Croatian general government debt actually decreased by 1.7 billion kuna.

Observed as a ratio in annual GDP, the total debt at the end of March 2022 amounted to 77.3 percent of GDP, which is 12.8 percentage points less than a year earlier, when total debt reached 90.1 percent of the country's GDP, they stated from the Croatian National Bank.

Otherwise, the Croatian Government expects that by the end of this year, the share of public debt in GDP should amount to 76.2 percent of GDP, or 3.6 percentage points less than back in 2021.

As a reminder, the debt of the general government back at the end of February this year amounted to 344.2 billion kuna, which is 13.7 billion kuna or 4.1 percent more than a year earlier.

Analysts previously estimated that this year, they expect the Croatian general government debt to continue to grow in absolute terms due to growing financing needs.

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

July the 4th, 2022 - Unless the government once again steps in quickly with some measures to mitigate the harsh blow to the pockets of this country's drivers as inflation drags on, Croatian fuel prices are set to shoot up yet again this week.

As Poslovni Dnevnik writes, according to unofficial information from HRT, eurosuper could cost around 16 kuna, and eurodiesel more than 16 and a half kuna unless the government intervenes this week. The Economy Minister recently said that the decision will be made after the weekend, and the Prime Minister announced a session of talks within the government on the subject for Monday.

Eurodiesel on Croatian motorways currently costs 14.57 kuna per litre, and Eurosuper 95 costs 14.06 kuna. A litre of basic Eurodiesel costs 13.08 kuna at fuel stations that are not on the motorways.

Prime Minister Andrej Plenkovic has also announced the possible introduction of fuel vouchers if the situation fails to calm down.

"The introduction of fuel vouchers is possible this autumn, we're leaving that possibility open, but the government still has other tools at its disposal," Plenkovic said. "As for the vouchers, they'll go to those with lower incomes, and this is something that we have to do qualitatively and according to certain criteria," he added.

The head of the distributors' association: We're going to close the pumps on Tuesday if the government doesn't do something.

Armando Miljavac, the head of the Association of Small Oil Derivatives Dealers, says that on Tuesday, he will close the country's fuel stations if the government doesn't step in and do something. The association brings together more than sixty small dealers who manage about a hundred fuel stations throughout Croatia. "I don't know what to tell you. We're not very happy with this, these decisions should have been made already but here we are, we're still faced with uncertainty,'' said Miljavac for Index.

"If there is no decision on Tuesday that is acceptable for normal operations and the continuation of operations, we've decided to close the fuel stations. We've been trying to cope with this for eight months, we've exhausted all our reserves, the price differences have broken down...", continued Miljavac, adding that he wonders what will happen in autumn and states that things aren't looking good.

Economy Minister Davor Filipovic, We're considering all measures, there'll be a decision made today.

Minister Filipovic also commented on whether or not the government is preparing new measures ahead of Tuesday to try to tackle rising Croatian fuel prices, given the fact that further price hikes are expected. In an interview with Media Servis, Filipovic stated that there are still options when it comes to excise duties.

"We're considering all possible measures, so all options are on the table at the moment. We still have a few options when we talk about excise duties. We'll make a decision that will be beneficial, which will be satisfactory at this moment, but only when we see what the prices are going to actually be in the end,'' he explained, adding that decisions will be made today.

Fuel vouchers were announced as a longer-term measure to help the socially disadvantaged.

"This situation is so volatile that we can't predict what will happen in the next two weeks. Maybe in the next two weeks we'll have to react differently, not to talk about what the situation is going to be like come autumn. Vouchers are in the plan and they're scheduled to start sometime in autumn, but I'll talk more about the details when the time comes," said Filipovic.

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

ZAGREB, 21 June 2022 - The Croatian government on Tuesday sent an opinion to the parliament proposing that it should reject a motion by 32 opposition MPs to discuss giving Health Minister Vili Beroš a vote of no confidence.

In its opinion the government comments on allegations from the motion, describing them as unfounded and noting that there was no ground to vote no confidence in the health minister.

The government also sent the parliament a final bill on cultural councils and on the financing of public needs in culture, which envisages combining the laws on cultural councils, financing of public needs in culture and management of public institutions in culture in a single law to simplify and more efficiently regulate the area in question.

It also adopted four conclusions to help residents of earthquake-struck areas, extending a write-off of electricity bills for customers in earthquake-struck areas until the end of the year. The total cost of the measure is estimated at HRK 8 million.

The government also extended the toll-free use of A11 Zagreb-Sisak motorway as well as free train transport for residents of the earthquake-affected Sisak-Moslavina County and employees of services participating in the provision of assistance and removal of the consequences of the 2020 earthquakes in the county.

The amount of road tolls not to be collected in the next six months is estimated at HRK 16.5 million, including VAT, and the cost of free transport by train at some HRK 12 million.

The government also instructed the HRT public broadcaster to write off TV licence fees for residents of earthquake-struck areas.

For more, check out our politics section.

ZAGREB, 20 June 2022 - Croatia will expand the capacity of its LNG terminal off Krk Island from 2.9 billion to 6.1 billion cubic metres, Prime Minister Andrej Plenković said in Riga on Monday while attending the Three Seas Initiative summit meeting.

The Three Seas Initiative, launched by Croatia and Poland, is an informal political platform of 12 countries located between the three seas -- Baltic, Adriatic and Black -- with the aim of boosting their energy, transport and infrastructure connectivity.

Addressing the meeting in the Latvian capital city, PM Plenković said that the increased capacity of the LNG terminal to 6.1 billion cubic metres was far above Croatia's needs.

This increase will enable Croatia to become a regional energy hub, which is also beneficial to our neighbouring countries: Slovenia, Bosnia and Herzegovina and Hungary said Plenković.

The premier also commented on transport connectivity and highlighted the pan-European 5C corridor from Hungary via Croatia and Bosnia and Herzegovina reaching the southern Croatian seaport of Ploče.

The Three Seas Initiative was born out of a shared interest in developing transport, energy and digital infrastructure connections on the EU’s north-south axis.

The initiative was launched in 2015 at the proposal of the then Croatian president Kolinda Grabar-Kitarović and her Polish counterpart Andrzej Duda.

The very first summit meeting was held in Dubrovnik in 2016, while the initiative's investment fund now stands at €928 million.

According to U.S. Secretary of State Antony Blinken who addressed the summit meeting via video, new American contributions will raise this amount above a billion euros.

Plenković said that the Three Seas Initiative Investment Fund (3SIIF) is the most logical way for making investments in energy, transport and digital projects in Croatia.

The contribution of Croatia's development bank (HBOR) in this fund stands at €20 million. Croatia is currently proposing 11 projects to be funded under the 3SIIF-financed schemes.

Apart from Plenković, several heads of state or government arrived in Riga for the two-day event.

The executives of several Croatian companies, including Končar, the Luka Rijeka port, and Plinacro, are also taking part in the business conferences in Riga today and tomorrow.

Tourists from the countries covered by the Three Seas Initiative account for 40% of guests visiting Croatia.

This group of countries is interesting for Croatia, and furthermore, they are also part of our Central European identity, said Plenković.

During his visit, he will hold several bilateral meetings, including a meeting with Latvian President Egils Levits and Google Vice-President Karan Bhatia.

Ukrainian President Volodymyr  Zelenskyy addressed the Riga event via a video link.

The next summit meeting will take place in Romania.

These countries: Austria, Bulgaria, Croatia, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia, and Slovenia make up the initiative.

For more, check out our politics section.

ZAGREB, 20 June 2022 - The government has decided to cap fuel prices at petrol stations that are not located on highways, Prime Minister Andrej Plenković said on Monday after a government conference call meeting.

Thus one litre of Eurodiesel at petrol stations that are not located on highways will cost HRK 13.08 while a litre of Eurosuper 95 petrol will be sold at HRK 13.50.

Blue-dyed diesel will cost a maximum HRK 9.45 per litre.

The government decree capping fuel prices, to go into force on Tuesday, refers to 94% of petrol stations in the country.

It will be in force for the next two weeks.

The decree does not refer to premium fuels.

If the government had not acted, petrol would cost HRK 14.57 per litre as of Tuesday, while diesel would cost HRK 14.06 and blue-dyed diesel HRK 10.93, Plenković said, adding that petrol stations on highways would sell petrol and diesel at those prices.

The PM added that owing to the measures taken by the government so far, the price of a litre of petrol had been lowered by HRK 2.45, while the prices of diesel and blue-dyed diesel had been lowered by HRK 3.56 and 2.38 respectively.

(€1 = HRK 7.524861)

For more, check out our politics section.

ZAGREB, 9 June 2022 - A government-sponsored model of family pensions, which will take effect on 1 January, brings three crucial changes: an increase in the factor for family pensions, eligibility to use a family pension alongside one's own pension, and a 3% increase in the lowest pension allowances.

"We are sending a clear message that in the circumstances of overlapping energy and food crises and inflation pressure, the government's key priority is to provide social security to all citizens, notably senior citizens," Prime Minister Andrej Plenković said while presenting the new, combined model on Thursday.

Draft amendments to pension insurance legislation put an emphasis on family pension beneficiaries who will be entitled to a more equitable pension calculation and be able to use a part of the family pension while receiving their own pension in the event of their spouse's death, said the premier.

The changes will cover nearly 300,000 pension recipients, and in 2023, more than 1.1 billion kuna will be earmarked for that purpose.

An increase in the pension factor for over 136,000 pension recipients will mean a 10% increase in the family pension, or an average HRK 250 per user, and HRK 365 million will be set aside for that in 2023, Plenković said.

Making it possible for pensioners to receive a part of the family pension alongside their personal pension will lead to an average increase of HRK 500 per month for over 155,000 family pension beneficiaries, and this measure will cost HRK 750 million in 2023.

Croatia has thus joined those EU countries where it is possible for pension beneficiaries to receive both family and personal pensions, said the premier.

As of 1 January 2023, the lowest pension allowances will increase by 1.5%, and as of 1 January 2025, they will rise by an additional 1.5%.

Thus in 2023, this increase will cover 287,000 beneficiaries of the lowest pensions, and HRK 100 million has been secured for that purpose, the PM said.

Plenković recalled that since the start of the first term of his government in October 2016, the average pension allowance has risen by 20.15%, and currently the average pension amounts to HRK 3,047.

The lowest pension has increased by 26.41% to HRK 2,008, said Plenković.

The increase is not only due to pension indexation but also due to a set of measures undertaken as part of the pension reform, he said.

Labour Minister Marin Piletić said that for a person to be entitled to the family pension, they must be above 65 and meet other necessary criteria.

It is proposed that the personal and the family pension combined cannot exceed HRK 5,850.

Upon indexation after the adoption of the necessary legislation, this threshold may rise slightly, to exceed HRK 6,000, Piletić said.

The minister said that beneficiaries who may be users of the combined family and personal pension will have to request the relevant authorities to make calculations and inform them which of the pension models is the best for them.

The parliamentary deputy of the Croatian Pensioners' Party (HSU), Silvano Hrelja, said that this combined model was the result of a lot of analysis and calculation, to take into account the state of family pensions.

I am not euphoric but I am satisfied, he said.

(€1 = HRK 7.520038) 

For more, check out our politics section.

ZAGREB, 27 May 2022 - The parliament on Friday passed by a majority vote a revised budget for 2022, whereby the expenditure side will increase by HRK 10.9 billion to HRK 184.7 billion and the revenues will go up by 6.6 billion to HRK 171 billion.

As a result, this year's budget deficit will widen from the initial projections of 2.6% of the GDP to the deficit-to-GDP ratio of 2.8%.

Most of the rejigged budget outlays refer to the health system, in the amount of HRK 4 billion, of which the largest share will be used to cover hospitals' and pharmacies' debt to suppliers.

The opposition MPs who voted against the budget revision criticized the proposal as bad.

In mid-may, the Fiscal Policy Commission said that it believed that the proposed 2022 budget revision was appropriate to the current circumstances however, this independent body underscores that it is necessary for Croatia to absorb more EU funds to fund investments and schemes to boost productivity and implement cost-cutting reforms.

In a press release released on 17 May, the commission underscored the need to implement reforms to limit expenditure for healthcare, pensions, and unemployment benefits.

Also today, the parliament passed a law on the registry of persons with disabilities.

The legislation on investment stimulation was today endorsed, providing for some additional benefits for users of state subsidies for investments in the event when their projects are affected by extraordinary circumstances caused by the COVID-19 pandemic.

(€1 = HRK 7.529160)

For more, check out our politics section.

April the 29th, 2022 - The Croatian inflation wave is currently three times higher than initial government predictions ever thought it would be, which is of course an enormous cause for concern for the vast majority.

As Poslovni Dnevnik/Jadranka Dozan writes, the recently updated macroeconomic projections for this year, presented by the government within the new Convergence Programme, once again did well in confirming just how much various economic forecasts have had their "shelf lives" very much shortened in the face of Croatian inflation.

This is most drastically shown in the revised estimate of the average Croatian inflation rate. The last official projection from the government, made back during the time of the adoption of the state budget for the year 2022, is barely half a year old, and compared to the then projected 2.6 percent, the expected Croatian inflation rate is now three times higher.

To be more precise, the government is currently counting on a rise in consumer prices of as much as 7.8 percent, proving to be much more cautious than the Croatian National Bank has been. The CNB's recently released new forecast of average inflation of 5.4 percent now seems actually quite optimistic.

The war in Ukraine, accompanied by additional supply chain disruptions and the ongoing energy crisis, has intensified inflationary pressures, affecting the prices of energy, transport, food, but also a number of other raw materials and industrial goods.

From next year on, inflation is thankfully expected to slow down, but having in mind the so-called the base effect of this year's large price increase, the projected slowdown to 3.7 percent next year and to 3.5 percent in 2024 certainly doesn't sound all that promising for anyone. As early as this autumn, in addition to lower price growth this year, rates of 2.3 and 2.2 percent have calculated for the first two years following Croatia's transition to the Eurozone.

Given the projections for growth in average gross wages (employees in legal entities), Croatian residents have at least two or three years of falling standards ahead of them, although government projections suggest that a slight recovery in terms of real income could finally begin next year.

According to the calculations from the Ministry of Finance, gross wages are expected to grow by an average of 6.3 percent this year (compared to a 7.8 percent rise in prices). In the first year, the euro should grow by an average of 3.8 percent or slightly above the Croatian inflation rate, and in 2024 by about 3.5 percent, which is one percentage point more than the expected price growth.

A minor surprise came from the government's revision of expected economic growth, although it is currently proving more conservative than the central bank. Instead of growth at the rate of 4.4 percent, which was estimated at GDP growth last autumn, expectations have been reduced down to three percent in real terms this year, with an acceleration forecast of 4.4 percent next year.

With the traditionally significant contribution of personal consumption in the structure of the nation's overall GDP, it remains to be noted that expectations of consumption growth compared to the original projections for this year decreased from 3.2 down to a mere 1.4 percent.

At the same time, following a package of anti-inflation economic measures, estimated at almost five billion kuna, then increased material and costs for Ukrainian refugees, and finally this week's agreement with the unions of state and public services, government spending is expected to grow more than planned for in the state budget. Instead of the then projection of just over two percent, it now counts on a 3.3 percent increase in government spending.

Although the projected growth rate of investment has now been halved (from 12 down to 5.8 percent) this year, over the next few years, public and private sector investment should be the main drivers of growth. Their contribution to Croatian GDP growth this year, at least according to the Ministry of Finance, is estimated to stand at 1.2 percentage points.

Individually, however, following the expectation of 7 percent growth in terms of the exports of goods and services (slightly less than 5 percent for goods and more than nine percent for services), the contribution of exports to Croatia's GDP should be significantly higher than that of investment (about 3.5 percentage points). However, given the rather high import dependence of the Croatian economy, Finance Minister Zdravko Maric explained that "the net contribution of net exports will be slightly positive this year, and slightly negative or neutral over the next three".

For more on Croatian inflation, check out our dedicated politics section.

April 14, 2022 - Croatian citizens have the greatest trust in the army and police, according to a survey of political scientists for whom data have been collected for more than two decades. Croats trust the European Union more than their own government.

While citizens of organized and developed EU member states have high trust in the institutions of their countries, Croatian citizens have the greatest trust in the army and police. Croats trust the Church more than NGOs and, for many perhaps unexpectedly, trust the EU more than Croatian public administration, reports tportal.hr. This is shown by the research "Stability and/or change? Trust in institutions in Croatia from 1999 to 2020." by political scientist Kosta Bovan from the Faculty of Political Science in Zagreb and Nikola Baketa from the Institute for Social Research in Zagreb, published in the scientific journal Revija za sociologiju.

They analyzed data collected in surveys in 1999, 2003, 2007, 2011, 2015, 2016, 2018, and 2020, conducted by the Faculty of Political Science in Zagreb, in which citizens were asked to 1 to 5 assess the degree of trust in political and social institutions.

It turned out that the army and the police enjoy the most stable trust of the citizens.

Thus, in 1999, citizens' trust in the army was rated at 3.64, and in 2020 at 3.62, while trust in the police in the same period reached 3.15 and 3.22, respectively. Trust in political parties in 2020 was 1.89, and in 1999 at least 2.52.

While the trust in the Parliament in 1999 was 3.15, in 2020 it dropped to barely 2.03. The situation is similar to the decline in confidence in the Government, in 1999 it received a score of 2.97, and in 2020 2.19. NGOs cannot boast of trust either, because in 2020 the trust in them was rated at 2.41, and in 1999 it was 2.82.

The Church enjoys greater trust than non-governmental organizations, in which the trust of citizens was 2.75 in 2020 and 3.36 in 1999. Croats' trust in trade unions in 2020 was lower (2.27) than in the media (2.45), although neither of them can be satisfied because from 1999 to 2020, trust in them fell.

Croats trust the EU more (2.72) than the Croatian public administration, which in 2020 was barely 2.19. Confidence in the courts is even lower, so in 2020 it was 2.04, while in 1999 it was still 2.90.

Political scientists conclude that the analysis showed that in the period from 1999 to 2020, citizens' trust in representative institutions decreased, which suggests the alienation of citizens from these institutions and poses a problem for the functioning of representative democracy in Croatia while trust in security institutions, army, and police extremely stable, wrote Večernji list journalist Dijana Jurasić.

For more, check out our politics section.