October 12, 2022 - Former Prime Minister and President of the HDZ, Ivo Sanader, was acquitted of war profiteering in the Hypo scandal in a retrial on Wednesday, for which he was convicted twice in earlier proceedings.

As Poslovni writes, the verdict was announced by Zagreb County Court judge Saša Lui after the prosecution and defense presented their closing speeches last week. Sanader once again asserted that he was not responsible for war profiteering, stressing that he stands by the defenses he presented in earlier proceedings.

Disputed commission of HRK 3.6 million

Sanader was tried for the third time for the Hypo affair. He was convicted twice before, and the Constitutional and Supreme Courts overturned the verdicts.

Uskok's prosecutor, Marija Vučko, asserted in her closing speech that even in the repeated proceedings, it was proven that Sanader had committed the crimes for which he was accused.

Sanader's lawyer Čedo Prodanović pointed out, on the other hand, that there was no war profiteering in this case and that, despite the conclusions of the higher courts, Uskok did not deviate from its initial position.

The prosecution accused Sanader of receiving a commission of HRK 3.6 million from Hypo Bank as Deputy Minister of Foreign Affairs in late 1994 and early 1995 after Croatia was granted a loan to purchase embassy buildings.

This way, according to the prosecution's claims, in the difficult financial and economic situation caused by the war, Sanader achieved an illegal financial benefit that is disproportionate to the threatened fundamental values ​​of the state and social community, as well as state interests.

Sanader has been in prison since 2019

Sanader has been in prison since April 2019, when the Supreme Court increased his sentence for corruption in the Planinska case to six years in prison.

In mid-October 2021, the Supreme Court partially confirmed the verdict from the repeated proceedings in the Fimi Media case, according to which HDZ must pay HRK 3.5 million in fines for extracting money from state institutions and companies, while Sanader's sentence was reduced from eight to seven years in prison.

At the end of October 2021, the Supreme Court confirmed the first-instance verdict by which Sanader was sentenced to six years for accepting a bribe from the head of the Hungarian MOL, Zsolt Hernadi, while the unavailable Hernadi was sentenced to two years in prison.

In mid-November 2021, the Supreme Court confirmed the only acquittal against Sanader, by which he was acquitted together with entrepreneur Robert Ježić for selling cheap electricity to Ježić Dioki to the detriment of HEP.

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

September the 14th, 2022 - Croatian banks have sent out some important information to their customers and clients regarding Croatia's rapidly approaching accession to the Eurozone, which is set to take place on the very first day of 2023.

As Poslovni Dnevnik writes, PBZ sent its clients and customers a notice related to Croatia's upcoming introduction of the euro, in which they specify the essential elements for conversion that will be applied in the conversion of the Croatian kuna to the new single currency of the Eurozone.

"On the day of the introduction of the euro in Croatia, the bank will automatically and without charge carry out the conversion of funds held in Croatian kuna in bank accounts, deposits, loans and other financial statements of value at a fixed conversion rate of one euro = 7.53450 kuna,'' the bank stated.

''The conversion will be carried out by applying the rules for conversion and rounding in accordance with the Law on the Introduction of the Euro as the Official Currency in the Republic of Croatia. In addition to that, according to the principle of continuity of contracts and other legal instruments, the introduction of the euro will not affect the validity of existing contracts on loans, deposits and savings in kuna, etc., meaning that no new contracts need to be concluded. The goal is to carry out the process of introducing the euro and the activities resulting from it in such a way as to ensure the simplest possible treatment for everyone,'' it added.

The period of the obligation to display prices twice (in both Croatian kuna and euros) to consumers began on September the 5th, 2022 and ends twelve months after the introduction of the euro in Croatia.

Of the other Croatian banks which have sent out information on Croatian Eurozone accession to their clients, Zagrebacka banka made similar statements: "On the day of the introduction of the euro as the official currency of Croatia, monetary values ​​expressed in kuna on custodial and brokerage accounts will be converted into euros by applying the rules for conversion and rounding defined by the Law."

Erste Bank also informed its customers about the currency change, according to a report from N1.

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

September the 13th, 2022 - Almost all large consulting firms which are currently active in the Republic of Croatia, from KPMG, PwC to Ernst&Young, wanted to prepare a new industrial strategy for the country, but that work was entrusted to the small Croatian company Notitia, which is otherwise not very well known to the public.

As Poslovni Dnevnik writes, the Croatian company Notitia is a decade-old company from the City of Zagreb, whose founder is a professor at the Zagreb Faculty of Economics, Vlatka Bilas.

Just several ago, the Ministry of Economy and Sustainable Development concluded an agreement with the aforementioned Zagreb company on the creation of the National Plan for Industrial Development and Entrepreneurship for the period 2021-2027, an umbrella document for the creation of a future policy of support and moderation for economic development.

Notitia's references

The tender was announced during the mandate of the former Minister of Economy Tomislav Coric, and the bids were submitted back in April, just before Davor Filipovic took over that role and that department. The evaluation and selection between the offers of nine candidates took some time, and the offer with the lowest price was finally selected.

The estimated value that the competent ministry highlighted and was ready to pay for that project stood at 1.2 million kuna without VAT, and the Croatian company Notitia offered its services for a price of 325,000 kuna, just half of what the other bidders were willing to charge.

The lowest price offered wasn't the only criterion sought, points were also awarded for experience and the ability to be equipped for this type of work. These were equally important factors in the evaluation process. Among the five members of the Notitia team is Sanja Franc, an associate professor at the Faculty of Economics.

The Croatian company Notitia has otherwise already collaborated with the Ministry of Economy and some other ministries and state institutions, and one of its most recent engagements was consulting on the establishment of the Innovation Network for Industry and Thematic Innovation Platforms, as well as consulting on the establishment and development of the innovation system across the Republic of Croatia.

This team also has vast experience in strategic planning projects for no less than the World Bank, and among the references cited by Notitia are the smart specialisation strategy from back in 2016, and the creation of an operational plan for the implementation of the previous industrial strategy, the one for the period from 2014 to 2020.

The new development policy of Croatian industry will, therefore, be carved by the hands of the professors of the Faculty of Economics in Zagreb, and as foreseen in the public tender, they will have a total of seven months at their disposal to prepare the document that has been being waited on for two years already. The first argument for stalling the preparation of Croatia's seven-year industrial development plan was the outbreak of the global coronavirus pandemic, which put a halt to normal life and business as we knew it. It then coincided that an umbrella document for the development of the industry was also being adopted at the EU level, as well as at the national level, and work was then being done on the preparation and adoption of the National Development Strategy of Croatia until 2023.

At the end of last year, former Economy Minister Tomislav Coric concluded that with the adoption of these documents, a basis had finally been created in which the consideration of industrial policy could be properly integrated. Now new moments and changes have arisen again with inflation and the spiralling energy crisis, which will change a lot in the European economy. Looking at it this way, Croatia's brand new industrial strategy will be even more relevant.

Key changes

At the moment when the Ministry of Economy finally started looking for consultants for this document at the beginning of this year, three changes that will transform Croatian industry by the end of this decade were perceived as key - the green and digital transition, and improving the position of the Croatian economy in global value chains.

In other words, in the deliberation of the plan, emphasis was to be placed on production sectors that create higher and higher added value, those which are based on knowledge, with the inevitable postulate of a circular and decarbonised economy.

The Economy Ministry has made it clear that designing the recovery and development of the domestic economy couldn't simply be based solely on standard theses about competitive advantages and preserving jobs and simply detecting negative facts about the Croatian industry that need to be fixed. The challenge was to define "game changers" and create conditions for their encouragement. In addition to defining the industrial activities that have the greatest perspective, the ministry also expects from the consultants a proposal for an appropriate set of measures that will further stimulate their growth, and among others, small and medium-sized enterprises are key to the competitiveness and prosperity of the Croatian economy as a whole.

The modernisation and decarbonisation of energy-intensive industries has also been "inserted" as one of the priority goals, in which the ministry recognises the opportunity to improve and introduce advanced technologies and stimulate structural changes and investments. The preparation of the National Plan should also result in a detailed elaboration of measures, activities and expected results and projects.

For more, make sure to check out our dedicated business and politics sections.

September the 8th, 2022 - The Croatian general government debt amounted to 344 billion kuna back at the end of May this year, which is 5.9 billion of 1.7 percent higher than just one year earlier.

As Poslovni Dnevnik writes, the above information on the Croatian general government debt is according to the latest data from the Croatian National Bank (HNB), and Raiffeisenbank Austria (RBA) analysts. The annual increase in Croatian general government debt has been caused by an increase in both domestic and foreign debt, according to the latest CNB data.

As such, the internal debt is higher by 4.5 billion kuna or 2 percent when compared to the end of May 2021, to almost 223 billion kuna, which is largely the result of the growth of the central government's debt on long-term securities and long-term loans. At the same time, Croatia's foreign debt increased by 1.4 billion kuna, or 1.2 percent, to 121 billion kuna in total. When compared to the end of April, however, the general government debt was reduced by 12.1 billion kuna.

The reduction of the Croatian general government debt on a monthly basis is the result of the settlement of the Eurobond due on May the 30th, 2022, for the refinancing of which funds were collected by the April issue of the Eurobond in the total nominal amount of 1.25 billion euros, they pointed out from the RBA.

At the level of the whole year, RBA analysts expect the continuation of the growth of the Croatian general government debt in absolute terms due to growing financing needs, because of union demands for wage growth in an environment of pronounced inflationary pressures, but also as a result of a series of fiscal measures to mitigate the unfavourable impact of price increases on both consumers and enterprises.

"Although fiscal risks are increasing, we expect the Croatian general government deficit to remain at the level of 3 percent of GDP," the RBA concludes.

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

August the 29th, 2022 - Croatian Eurozone accession is just around the corner, with all requirements filled, all boxes ticked and the date for entry marked out for the 1st of January, 2023. The public is still divided on the issue, however, so what are some of the advantages and some of the risks and costs of Croatia finally becoming a Eurozone member?

As Poslovni Dnevnik/Marina Marovic writes, here is no alternative to joining the Eurozone for Croatia, as it was part of the referendum the country held on joining the bloc. It did so back in July 2013 and according to experts, all the benefits of Croatian Eurozone accession greatly exceed the potential costs and risks. The Croatian economy has an extremely high degree of euroisation despite still using the kuna as it is tied to the euro, and around 70% of people's savings in Croatia are in the bloc's single currency.

Therefore, kuna devaluation is simply not an option, because the balance effect would be significantly more difficult for the Croatian economy to handle than any gains on the export front.

The biggest advantages of Croatian Eurozone accession

This high rate of Croatian euroisation originates from the time of the former state of Yugoslavia when, due to hyperinflation, the German mark was the currency used to preserve the value of money in the country. This means that regardless of Croatia having its very own currency for less than three decades, this sense of illusory monetary sovereignty will not actually be lost, but the risks involved in everything financial will be greatly reduced.

The absolute biggest advantage of Croatian Eurozone accession on January the 1st, 2023 comes in the form of significantly lower risks and reduced borrowing costs. In addition to the reduction in interest rates, which also maintains a better investment rating, additional borrowing will be made much easier because joining the Eurozone frees up significant funds (about 160 billion kuna in total) currently tied up as minimum foreign currency claims. In addition to that, the country's banks will reduce currency risks and improve overall stability.

In addition to lower interest rates and borrowing costs, Croatia will become more attractive for both investors and tourists (75 percent of them come from the Eurozone, and tourism makes up 20 percent of the nation's economic activity). Additionally, conversion costs for capital transactions such as the sale of property and land, the prices of which have been expressed in euros for a long time now, will be reduced.

Aside from property and other forms of real estate, renting an apartment or buying a car is also usually expressed in euros. By joining the Eurozone, Croatia is merely formalising some of the existing conventions. An additional advantage is that Croatia will be able to count on ECB support in case of any liquidity problems.

Croatian banks will lose out when it comes to conversion fees (about a fifth of their profit, or 1.5 billion kuna), and have additional ATM costs (totalling about 900 million kuna). Exchange offices will largely be out of business. The one-time cost of introducing the euro in Croatia will cost the banks an enormous 100 million kuna, and the cost of the entire adjustment will be paid for by other sectors of the economy, especially retail and telecoms. The average cost for large retail chains will stand at around 30 million euros, for telecoms it is around 20 million euros, and for smaller companies the cost of introducing the euro isn't expected to exceed 10,000 euros.

Uncertain times...

Croatian Eurozone accession is finally occurring in incredibly uncertain times in which it is really difficult to comply with all the requirements for convergence - known as the Maastricht criteria - and yet all the basic indicators were assessed as positive and successful in the latest report and decision back on July the 12th, 2022 The biggest risk is in the galloping rate of inflation.

Back in April 2022, the annual average rate of HICP inflation in Croatia stood at 4.7%, which is below the reference value of 4.9% for the price stability criterion. This value was decisive for the final decision on Eurozone accession in 2023. That said, by the time June rolled around, inflation crossed over into the concerning land of double digits, and the last July value of 12.3% was significantly higher than the average inflation in the Eurozone of 8.6%. The Baltic countries, all of which are now members of the Eurozone, have already registered inflations of more than 20%.

Just joining the euro brings a one-time increase in prices, but on average such an increase amounts to about 0.3% and in the context of current inflation is negligible. The dual display of prices (in both kuna and euros) serves to reduce this risk, and in general, the preparation for the introduction of the euro in Croatia is systematic and thorough, so that these risks are minimal.

In the long term, one would expect convergence of both prices and real income, but in practice there are many other factors that influence whether this actually happens or not. In addition to inflation - foreign exchange markets have experienced tectonic shifts. Croatia is now joining the club of prestigious countries when the euro is at its worst so far - and is at parity with the dollar, which has not happened in the last 20 years. There are several reasons for a strong dollar and a weak euro, but the most important one lies in the fact that the ECB is reluctant to raise interest rates.

The reason for the ECB's lack of reaction is multifaceted, but the fact is that inflation in the EU hasn't been caused by an increase in demand, but rather by an increase in energy and food prices. On the other hand, inflation across the pond in the United States of America is more a consequence of the post-pandemic recovery of the economy than anything else.

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

August the 23rd, 2022 - What exactly does the new proposal for the Law on Maritime Property bring with it? There are some concerning items to be aware of, and Otoci.eu/Islands.eu has a message for the powers that be.

As Andrea Beader/Otoci.eu writes, does the new proposal of the Law on Maritime Property and Sea Ports bring us any restrictions or the fencing off of sea beaches to the public?

Reviewing the new proposal of the Law on Maritime Property and Sea Ports, we were taken aback by the proposed items that explicitly enable the limitation of the general use of maritime property, its fencing off and even the potential charging for access to sea beaches along the coast of the mainland and on the islands, which would prevent all citizens of the Republic of Croatia, as well as the rest of the public, from enjoying unhindered public use of maritime property and sea beaches.

We consider parts of the proposed law inadmissible and completely contradictory to everything we have advocated for and communicated all these years, emphasising the importance of protecting Croatia's greatest social, touristic and economic potential - its maritime assets, which historically and culturally represents an extremely important resource for everyone.

Maritime resource management with an emphasis placed on sea beaches

Five years ago, together with numerous stakeholders in the working group for the drafting of the proposal of the Law on Maritime Property, we worked out the best models for the use of maritime property with a special emphasis placed on beaches, with shared knowledge and experience.

We all had the goal of protecting Croatia's maritime assets from devastation, the restriction of access and privatisation, and maintaining the concept of public good in order to enable all residents and visitors to swim and relax on the Croatian coast and on the islands. With the departure of Maja Markovcic Kostelac to another job, unfortunately the whole process was suddenly interrupted and the then proposal of the Law ended up stuffed down into a drawer after many hours of work.

Recently, this topic and the decision on the adoption of the new Law on Maritime Property and Sea Ports has been brought up to date again. A new working group was formed, to which we weren't invited as representatives of both citizens and civil society organisations, despite our continuous work and advocacy for the preservation of maritime property and its public use, especially regarding sea beaches. A few months ago, we were contacted by phone and our opinion was sought.

However, since we weren't presented with a new proposal for the Law on Maritime Property, we could only give our comments by generally repeating our well-known position - sea beaches in Croatia must remain for public use, and we will not support any restrictions on their use.

Of course, we understand the need for the economic use of maritime property, the improvement of the coastline and raising the quality of services offered on beaches, in ports and at sea. However, we believe that a way must be found so that the maritime asset remains a public asset and that everyone is satisfied with the management method.

As an example of good practice, we sent Mr. Bilaver the Rulebook on the Economic Use of Maritime Property, which we drafted back in 2017 with Split-Dalmatia County and which could serve as an example for everyone to find a way to reconcile private and public interest when concessioning sea beaches.

A dispute of Article 11 of the proposal for the Law on Maritime Property and Sea Ports

Finally, at the end of July of this year, we received the proposal of the new law from the state secretary, Mr. Bilaver, and a request to send our comments, which we did within a few days.

We consider the most controversial part of the proposal of the Law on Maritime Property and Sea Ports to be Article 11, which we'll transcribe in its entirety:

(1) On part of the maritime property, in accordance with this Law, the general use of the maritime property can be limited, and exceptionally excluded for a certain period of time on the basis of a concession, approval for special use, granting the right to the temporary use of the maritime property, and granting the management of a port.port administration which is open to public traffic.

(2) A restriction on the general use of maritime property is considered to be fencing off or otherwise preventing access to a part of the maritime property with or without charging [a free] for the use of the maritime property, when such a restriction is permitted by a valid concession agreement, a contract on special use or an agreement on the temporary use of the maritime property and by granting a port open for public transport to be placed under the management of the port authority.

(3) The exclusion of maritime property from general use is considered to be the use of a maritime asset in a way that completely or partially excludes the general use of a part of the maritime property, when such exclusion is permitted by a valid concession agreement, a special use agreement or an agreement on the temporary use of the maritime property.

(4) The degree of restriction and exclusion of maritime property from general use and the purpose achieved thereby is determined by the decision on awarding concessions, the decision on granting approval for special use and the decision on granting maritime property for temporary use.

Dear Prime Minister, Minister, Secretary of State and all other members of the working group who are responsible for the preparation of the proposal for this Law, we ask you - do you really intend to limit the use of maritime property, i.e. sea beaches for the public, with this proposal of the Law, and/or enable the installation of fences and the charging for entry to the beaches?

Are you aware of the negative practices of neighbouring countries, such as Italy, where the beaches are mostly under the concessions of catering/hospitality and hotel facilities, and the numerous sunbeds, umbrellas and other facilities don't allow unhindered access to the sea, even though, according to the law, the public use of maritime property in Italy cannot actually be restricted?

This is an Invitation to the responsible representatives of the institutions of the Republic of Croatia;
Prime Minister, Mr. Plenkovic
Honourable Minister of Maritime Affairs, Mr. Butkovic
State Secretary, Mr. Bilaver

We invite you to review and consider the comments and suggestions that we have sent on the draft law, and be sure to foresee the possibility that the beaches and the sea can be accessed unhindered, regardless of whether they are public or not.

We believe that additional facilities such as sunbeds, umbrellas and other props should incur charges when on the beaches, but they must not endanger and/or prevent unhindered public access to the sea and part of the sea coast. As an example of Split-Dalmatia County's rules for concessioned beaches, it is defined that it is necessary to leave 30% of the surface for public use and provide pedestrian corridors through which everyone who wants to can enter the sea unhindered.

Practice has shown that both private and public interests are satisfied in this way, and that companies and citizens, in places where the laws are respected, can live a quality co-existence. Any restriction of access to the sea and maritime property is a threat to human rights and will certainly cause a series of citizen complaints, public resistance and protests, which will damage community relations and investment potential on the coast and islands in the long term.

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

July the 26th, 2022 - As Peljesac bridge opens after what seems like an endless wait, which government actually deserves the most praise? While SDP is responsible in the most part for pushing forward with the EU, HDZ was the one to sign the final agreement.

As Faktograf/Sanja Despot writes, with both HDZ and SDP having played their respective roles, Peljesac bridge opens not only itself, but many questions about precisely who the most praise should be directed at. Competitive discussions about whose government is most responsible for its construction have started up again.

President Zoran Milanovic (SDP) stated that he started working on the bridge's implementation back in 2012, claiming that it is indeed true that he questioned whether or not it was a profitable investment, but that he asked those questions during the period from 2005 to 2011, and not back in 2012.

"My team and I participated in the realisation of this bridge, practically in a 95 percent way. Everything was over when I handed over the post of prime minister," he said and added that it all started with Ivan Sprlje, the former prefect of Dubrovnik-Neretva County, who spoke about the idea way back during his 1997 campaign.

When asked to comment on the president's statement that SDP is responsible for this enormous project, Prime Minister Andrej Plenkovic said: "They're one hundred percent responsible. They messed around to try to ensure that nothing came of it,''

It's fairly easy to find Milanovic's quote from back in July 2015 on the Croatian Government's website, on the eve of the parliamentary elections that took place that year. Milanovic then said that "Peljesac bridge will be built regardless of who wins the elections", and that, as he said, "no one can blow it anymore, and they blew it for five years straight".

It's worth noting that the European Union (EU) didn't simply decide out of nowhere to provide the funds for the construction of the bridge back in 2016 when HDZ returned to power.

Back in July 2015, then Prime Minister Milanovic, together with ministers Branko Grcic and Sinisa Hajdas Doncic, presented the project to connect the extreme south of Croatia with the Peljesac bridge, saying that the idea of a bridge was chosen as the best option by those who decided on it all in the European Union.

The then Minister of Maritime Affairs, Transport and Infrastructure, Hajdas Doncic, said that the Peljesac bridge construction project inherited from the previous government was oversized and too expensive, which is why Milanovic's government terminated the contracts with the contractors in 2012. He added that after that, through OP traffic in 2007-2013, they were provided money for the pre-feasibility study and said that in parallel, through OP Cohesion and Competitiveness, in the part concerning transport for the financial period 2014-2020, funds were provided for connecting the isolated part of the Republic of Croatia (southern Dalmatia) to the rest of the country. Through European Union funding, Croatian Roads (Hrvatske ceste), as the project holder, contracted the feasibility studies.

On that occasion, Hajdas Doncic recalled that several connection solutions were considered, stressing that as the best solution, the Peljesac bridge project with all of its connecting roads received the best marks and was identified as a project that would meet all the set goals.

"The bridge can apply for cash from European Union funds on the condition that we prepare the studies that show that this is the best solution", said the Minister of Foreign Affairs Vesna Pusic back in 2012, before Croatia formally entered the European Union on July the 1st, 2013, which was also during the mandate of former Prime Minister Zoran Milanovic. Pusic had then hoped that it could be financed from the IPA pre-accession fund.

In 2013, a preliminary feasibility study was carried out, financed by the European Commission (EC), which concluded that the best solution of all options for connecting the extreme south of the country was indeed a bridge.

During 2014 and 2015, once again during the mandate of Milanovic's government, a feasibility study was carried out, which was financed by EU funds, and which also confirmed that the best solution was the construction of Peljesac bridge. Then, at the end of 2016, confirmation was received from the EU that the project was ready for application for co-financing in the maximum amount of 85 percent. Finally, on June the 7th, 2017, a formal decision was made by the European Commission to co-finance the construction of the huge structure with 357 million euros.

In the spring of 2018, the then HDZ Minister of Regional Funds, Gabrijela Zalac, signed the contract on the construction of the bridge, which was worth over 2 billion kuna, between Croatian Roads and the Chinese consortium led by the China Road and Bridge Corporation.

Regarding the part of Milanovic's statement that Ivan Sprlje, the late SDP prefect of Dubrovnik-Neretva County, was the initiator of the idea of ​​building the bridge, it should be noted that SDP and HDZ are persistently competing for the right of precedence, each with their own arguments. SDP claimed that Sprlje was the first to present the idea in his campaign, that is, they refer to the exact information that he was the first to draw up the bridge in the spatial plan, and from HDZ, they highlight the role of Luka Bebic, who was the first to speak about it in Parliament for HDZ in 1998.

It's a fact that in the years leading up to the moment when Peljesac bridge finally opens, SDP wasn't entirely sure whether or not it should dive in with that project, until the party took over the government, that is. It's also true that former HDZ Prime Minister Ivo Sanader "rather emptily" started his work on the bridge as part of his PR campaigns.

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

July 10, 2022 - TCN contributor Kristian Divander breaks down the basics of the Croatian political system. 

In Croatia, complaining about the politicians and the political system is a national sport, but what do folks know about the Croatian political system? Do they know what they are complaining about? Let’s find out! 

Croatia is a parliamentary republic, which means that the prime minister (predsjednik vlade/premijer) and the government (vlada) is elected by the parliament, which is elected by the people. The role of the president (predsjednik države) is largely ceremonial. However, the president is the Supreme Commander (vrhovni zapovjednik) of the Croatian Army (HV). Moreover, the president has the power to dissolve the parliament. 

The Sabor is the national parliament. It has 151 seats, eight of which are reserved for the national minorities and three for the diaspora. Three of the national minority seats are reserved for the Serb minority. The members of parliament (saborski zastupnici) are elected in 10 electoral districts. If a political party gets at least 4% of the votes in one of the electoral districts, it enters the Sabor. This means that a political party can receive less than 4% nationally and still win representation in the parliament. 

Croatia is divided into 21 counties, or županije. Each županija is led by a county prefect, or župan, who is elected by the people. The regional parliament, županijska skupština, is also elected by the people. The City of Zagreb (Grad Zagreb) enjoys a special status, and is both a county and a city (grad). 

Croatia has 127 cities (gradovi) and 428 municipalities (općine). Each city, grad is led by a mayor (gradonačelnik) and each municipality, općina by a municipal mayor (općinski načelnik). All city and municipal mayors are elected directly by popular vote, just like the president and the county governors. Each city and municipality has an elected council (gradsko/općinsko vijeće). The City of Zagreb, which is both a city and a county, has a city assembly (gradska skupština). 

Each city and municipality is divided into districts (mjesni odbori). In Croatia, city and municipality district councils are elected by popular vote. They are elected by the residents of the city district (gradska četvrt). Just like other elections, city and municipality district council elections take place every four years. 

Get it, now?

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

July the 6th, 2022 - Finance Minister Zdravko Maric has stepped down from his longtime role at his own request, it has emerged. Marko Primorac will step in as the country's new Minister of Finance.

As Index writes, Finance Minister Zdravko Maric is leaving his position within Plenkovic's government at his own request. He has already informed Prime Minister Andrej Plenkovic about everything, and further information should be published later on today after the meeting of the cabinet of the government.

"It's true that Zdravko Maric is stepping down from his position of Deputy Prime Minister and Minister of Finance on his own initiative. The Prime Minister will inform the members of the cabinet tomorrow about Maric's departure. We're grateful to him for the contribution he has made in the government over the past six years. The government will continue to work as it did before to solve all the challenges we're facing in the crisis, protecting people, and the economy. The Prime Minister will present Marko Primorac to the parliamentary majority as a candidate for the new Minister of Finance, and to the members of the Croatian Parliament during the next week," the government told Index.

Maric's biography

Finance Minister Zdravko Maric joined the government from his former position within the former Agrokor, he survived several situations and affairs and is the author and implementer of several rounds of tax reform.

Maric was born on February the 3rd, 1977 in Slavonski Brod and graduated from the Faculty of Economics in Zagreb in 2000, majoring in finance. In 2004 he received his master's degree at the same faculty with the topic of his master's thesis entitled "An analysis of capital inflows to transition countries through the impact on investments".

In 2007, he completed the Executive Education Programme "Public Financial Management", at Harvard University, the J.F. Kennedy School of Government. He received his doctorate in 2008 at the Faculty of Economics in Zagreb on the topic "The impact of foreign direct investment on the productivity of Croatian companies".

He worked as an assistant at the Institute of Economics in Zagreb, as an external associate - lecturer at the Zagreb School of Economics and Management, and as an external associate - lecturer at the International Graduate Business School in Zagreb.

From Agrokor to the Croatian Government

In 2006, he started working in the Ministry of Finance as Assistant Minister for Macroeconomic Analysis and Planning, and in 2008 he became State Secretary in the Ministry of Finance.

From 2012 to 2016, he worked at Agrokor as an executive director for strategy and capital markets. From that position, he came to the position of non-partisan finance minister in the government of Prime Minister Andrej Plenkovic.

After the fall of Agrokor and its longtime owner Ivica Todoric, the opposition demanded his departure in 2017 and initiated a no-confidence motion. The three ministers from MOST, who were part of the government at the time, were in favour of his departure, which is why they themselves were dismissed. The vote of no confidence did not pass in Parliament either.

A summer holiday at the Bellevue Hotel with question marks hovering above it...

Finance Minister Zdravko Maric is allegedly stepping down from his position after a recent story broke about his stay "over an extended weekend" at the Bellevue Hotel in Mali Losinj.

Back in June 2019, Maric stayed with his family in the luxurious Bellevue Hotel in Mali Losinj. For accommodation for two adults and two children, the Ostro portal revealed, he paid 291.20 euros (2153 kuna) per night, which is three times lower than the usual price for that period of the year. In other words, Minister Maric received a huge discount that not all hotel guests can count on.

"I didn't influence that decision, nor did I ask for any discounts. Privately, and long before I was a minister, it never once happened to me,'' Maric said of the event.

He was aboard the 800,000 euro yacht owned by entrepreneur Blaz Pavicic

Back in August 2021, Maric came under the scrutiny of the Commission for deciding on conflicts of interest after it was revealed that he had spent four to five days on the 800,000-euro yacht owned by entrepreneur Blaz Pavicic. At first, Maric refused to give the name of the owner of the yacht, and then, after revealing the name, he said that this entrepreneur had nothing to do with his department in terms of tax debt or HBOR loans, and that the concessions owned by Pavicic's companies were within the department of the Ministry of Transport.

It was said that Finance Minister Zdravko Maric deliberately forgot that his Ministry, more precisely the Customs Administration, is extremely important for the business of Pavicic's companies.

Maric is also accused that, together with the government, he knowingly misled the Commission for deciding on conflicts of interest three years earlier, when in connection with the Lex Agrokor case, i.e. the Borg affair, he said that he met with Ivica Todoric only twice, and on February the 26th and March the 3rd, 2017, while he failed to mention other meetings.

Maric would have remained innocent had it not been for Martina Dalic's testimony...

Finance Minister Zdravko then told the Commission that at those two meetings with Todoric, he didn't present or convey any positions, opinions or proposals. He also said that no decisions or conclusions were made at those meetings, and also that his role was a passive one.

This was his key evidence that he wasn't in a conflict of interest in connection with the Todoric case, that is, Lex Agrokor. The commission acquitted him in that case.

Maric's claim would have remained the same if the statement to the USKOK of former vice-president Martina Dalic hadn't come to light, who admitted to the investigators that Maric was present at at least five meetings back during February 2017, which concerned not only the creation of Lex Agrokor but also meetings with the leadership of Agrokor. The crucial meeting is from February the 19th, when Prime Minister Andrej Plenkovic ordered Dalic and Maric to go to a meeting with Todoric.

At that meeting, Todoric asked for the help of HBOR, and Maric was given a presentation of the current financial situation within the then enfeebled Agrokor. After this information came to light, and it was contrary to what Maric said the first time before the Commission, the Minister of Finance then defended himself, saying that he had not lied.

"I read and see a lot of constructions that I told some lies and untruths. This is all easily verifiable," said Maric, inviting journalists to check what he was asked before the Commission and what he answered.

But the Commission, which acquitted him in the first trial, decided back in August 2018 to renew the proceedings against both Maric and Dalic. At the end of 2018, they made a decision that Finance Minister Zdravko Maric and former Deputy Prime Minister Martina Dalic had "violated the principle of public office in the case of Agrokor". Both Maric and Dalic appealed against that decision.

Marko Primorac is the new Finance Minister candidate

The Croatian Government has confirmed the information that Marko Primorac is the new candidate for the position of Finance Minister.

"The Prime Minister will present Marko Primorc as a candidate for the new Minister of Finance to the parliamentary majority, and to the members of the Croatian Parliament during the next week," Index was told.

"Marko Primorac (1984) is a professor at the Faculty of Economics in Zagreb, whose area of ​​expertise is financial management in the public sector, tax policy and fiscal decentralisation," added the Government. Marko Primorac was also an economic adviser to Kolinda Grabar-Kitarovic back when she was president.

For more, make sure to keep up with our politics section.

June the 19th, 2022 - At a recently held session, the Commission for Deciding on Conflict of Interest passed a unanimous decision according to which Croatian PM Plenkovic was fined 3,000 kuna for incompatibilities when listing his assets and income, which he can pay in three equal installments.

As Poslovni Dnevnik writes, this was confirmed by the President of the Commission, Natasa Novakovic, as reported by Dnevnik.hr, and the aforementioned commission launched proceedings against Croatian PM Plenkovic back in early October last year.

In the period from 2016 to 2018, he reported higher income for his wife than what was really the case. It was stated that her annual salary stood at 121,385 kuna, and during 2016, 2017 and 2018, she actually received significantly less than that because she was on maternity and then parental leave until the third year of their child's life.

In addition to that, Croatian PM Plenkovic failed to state that back in 1997, his wife inherited a third of a plot in the cadastral municipality of Makose near Dubrovnik, which spans a total of 759 square metres, with a house of 61 square metres also skipped.

Namely, the Prime Minister's wife is the co-owner of a third of the plot she inherited as a minor after her father's death and, as she claims, she didn't even know about the co-ownership share because she doesn't use the property whatsoever.

Officials are required to provide accurate information

Croatian PM Plenkovic did appealed against the decision of the Commission for Deciding on Conflict of Interest due to the proceedings initiated against him. In addition to his salary, his wife earned other income during that period, and she didn't consider it appropriate to report a smaller amount, it is stated in his statement, which was read on Friday at the session of the Commission.

As for not registering the property she acquired way back in 1997 in the municipality of Makose near Dubrovnik, it is stated that Ana Maslac Plenkovic didn't know that she had even become the co-owner of that property, so, as was stated in Plenkovic's statement, the Prime Minister himself couldn't have possibly known about it either.

It was explained at the session that this was only a very minor disparity, but it was also pointed out that officials are obliged to provide absolutely precise data.

Having in mind these two omissions, the Commission determined that there was indeed an issue, and that Croatian PM Plenkovic would have to pay a fine in the amount of three thousand kuna, which can be paid in three equal installments.

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