July the 28th, 2021 - Edward Bernays is offering education for all Croatian politicians in an attempt to recognise the need for education in modern democracies and to try to restore at least some public faith in politicians.

As Poslovni Dnevnik/Darko Bicak writes, a proper education is one of the fundamental pillars of a modern democratic society and a condition for its economic and social development. Over recent years, there has been a growing awareness of the need for lifelong learning in all segments of society, including in politics.

Recent political elections have shown that it is becoming increasingly important to voters who exactly the candidates are, what qualities they possess, what their life and professional path is, what they stand for, and less and less which party they belong to, which is a big change for Croatia.

New options appear on the scene and sometimes voters go with them in an attempt to break out of the normal political routines in Croatia. However, even with the true good will to do something positive, they lack knowledge about the functioning of the political system, the ways of making decisions, management in politics, and the proper ways of communicating with target audiences. Therefore, they disappear very quickly and we're constantly looking for something and someone new.

This was the reason why Edward Bernays University College in Zagreb decided to create an interdisciplinary lifelong learning programme that offers Croatian politicians and those in that world all of the knowledge necessary for political action in one place.

As explained by doc. dr. sc. Damir Jugo, Dean of Edward Bernays University College, the Political Academy programme is intended for politically active or engaged individuals at all levels of national, local and regional policy who have the desire and need to upgrade their political competencies, knowledge, skills and experience in the programme.

"We expect interest among mayors, prefects, heads of local government units, members of parliament, presidents of city councils and districts, but also all other actors in political life in Croatia. I believe that people will also welcome this kind of investment from Croatian politicians in their personal and professional development, which, as a universal education of this type, is a novelty on the market.

We mustn't neglect the arrival of new generations of Croatian politicians who to some extent have no real concrete political experience, but have the desire and energy that they would like to politically capitalise on - such a programme gives them the opportunity to fill that gap,'' said Jugo.

He added that during the development of the programme, they were guided by the fact that it enables participants to acquire the necessary knowledge to take quality political action in one place. It can all be adapted to the Croatian political environment, be practical and applicable in political activities, to be inclusive and open to all participants and their political preferences and party colours, and participants can be guided through the programme by lecturers who, in addition to theoretical knowledge, also have practical experience gained in managing political processes, advising political actors or analysing the Croatian and international political scene.

At Bernays, they emphasise that the key feature of the programme, ie its lecturers, is that they come from different political scenes, which gives the programme additional breadth, and enables Croatian politicians partaking to acquire all of the practical knowledge they might need from lecturers from different political spectrums.

Such a license to engage in public affairs is mandatory in many countries around the world, and the most famous is the Ecole National d'Administration (ENA), whose students are responsible for implementing public policies in France.

Jugo explains that such a practice is not only recognised in France, but, globally, and across many developed countries.

"I think that current trends are heading in that direction, but I must point out that specific policy areas have already recognised the importance of the specialised education of new staff, so there are, for example, the Diplomatic Academy and the School of Public Administration. But I believe that the need for comprehensive education for political action will emerge over time, and I'm convinced that all parties on the political spectrum could agree on that.

In the case of Bernays' Political Academy, it isn't a license, but an informal interdisciplinary programme of lifelong learning, upon the completion of which participants obtain a certificate,'' explained Jugo.

As part of the programme from this Political Academy, all relevant topics related to political action will be addressed, including the topic of transparency in political action.

"Transparency in decision-making and planning, financial transparency, digitalisation, all these are the topics of the module which aims to educate students about the knowledge and skills they will be able to act upon. If the system or person is transparent, the chances of conflict of interest and corruption are minimal,'' said Jugo when asked how they intend to educate public officials and Croatian politicians about the biggest problem on the Croatian political scene in the past 30 years - corruption and conflict of interest.

The programme lasts 120 hours and is implemented through 10 modules over a period of three months. The training covers: political management, political process management, strategic leadership, image management and personal branding, advanced communication skills, public appearances, communication with the media and media appearances, diplomatic protocol and political behaviour, and the organisation and proper management of political campaigns.

Bernays emphasises that the biggest advantage of the Political Academy programme is that the lecturers all have very rich political experience, and at the same time they come from different political options, which gives the programme more breadth and additional quality. Jugo is convinced that the Bernays' Political Academy will contribute to improving the quality of political activity in Croatia, and that in the future a new generation of individuals will restore confidence in politics and Croatian politicians themselves.

For more, follow our politics section.

July the 27th, 2021 - Transparency isn't something the Croatian authorities are all that used to. With corruption apparently being tackled with a wave of new mayors and local government units doing things differently, one continental Croatian town is going a step further. Meet transparent Samobor.

As Poslovni Dnevnik/Lucija Spiljak writes, in July, Samobor became the only city in all of Croatia to boast an automated display of all of the payments, invoices, contracts and purchase orders made by Samobor's administration in one place, thanks to the digital service iTransparency made by the Zagreb IT and consulting company Libusoft Cicom.

This digital service enables the creation of a transparent Samobor, the publication of timely, accessible, accurate and credible information on the implementation of budget items, which, among other things, prevents irresponsible actions and misuse of public funds, while local government units are encouraged to publish and explain their own budget documentation.

At the same time, the general level of information available to people, the media, entrepreneurs and even investors about local strategies and actions and their results has been raised, and it's all available in just a few clicks on the following website: https://transparentno.samobor.otvorenigrad.hr/isplate.

The director of the company responsible for the development of the newly transparent Samobor's service, Marko Ignjatovic, explained just how the system works and what it means for this city.

“Samobor is currently being provided with insight into payments made out to both individuals and legal entities, as well as incoming invoices, contracts and purchase orders, which will provide people with an accurate insight into all operations. On top of that, further improvements in functionality are being made to make new search and filtering capabilities available; according to time and the desired classification.

The possibility of corruption is definitely now reduced to a minimum and from our experience so far, we can say that the first results are visible very quickly. Unlike some competing solutions, our iTransparency system simply connects to other systems, and all of the data comes in automatically. In this way, additional costs and the possibility of mistakes are avoided, and business itself is facilitated,'' stated Ignjatovic.

The value of the project ranges from 20 to 30,000 kuna. and the company's team gradually developed and upgraded it over the years, while the introduction of the system in Samobor was worked on intensively for two weeks.

The iTransparency service is just one of the nine functionalities of the company within the LC Platform Open that can be implemented in the business of counties, cities and municipalities.

"So far, about 20 cities and about 10 municipalities have joined the project, and some more are currently in the process of being introduced. Digitisation and transparency are no longer a matter of choice but a legal obligation. As a direct consequence of the introduction of digitalisation and transparency, JLP (R) S is becoming more open to people, it's becoming easier and faster to communicate digitally, we can facilitate business insight, and it allows for more efficient budget management and the optimisation of investments,'' said the director.

Most of their team, out of a total of 140 experts, are based in Zagreb, but in order to be more easily accessible to many users, some are located in four business centres in Dalmatia, Primorje, Istria and even further east in Slavonia.

So far, they have achieved successful cooperation with more than 1,200 users, which include budget users, utility companies, residential building managers, companies and non-profit organisations, meaning that the newly transparent Samobor is one client in a long line for this successful Croatian enterprise.

“Thanks to 29 years of experience and numerous references, we've become leaders in the segment of software solutions intended for local and regional self-government units. We're proud to be able to stand out in the field of customer support, consulting services, online education and consulting, system and technical support, design and implementation, etc. Thanks to this transformation of business and comprehensive service, in addition to being an IT company here on the Croatian market, we've also profiled ourselves as a successful consulting company,'' stated Ignjatovic.

For more, follow our politics section.

July the 9th, 2021 - Croatian political stability is key to sending out the message to the world that it is safe and worthwhile to invest in the country, as small countries like Croatia have little other choice in such a big proverbial pond.

As Poslovni Dnevnik/Vecernji list writes, inventions and innovations should be strongly encouraged in all sectors, and it is naturally necessary to accelerate the digitalisation of industry and the state at all levels, initiate rapid and effective public administration reform, reduce bureaucratisation, state apparatus costs and corruption, and shape a long-term strategy.

All of the above, and basing it firmly on activities related to blossoming sectors in Croatia such as robotics, biotechnology, artificial intelligence and applied cognitive science, is one of the conclusions of the recently held and fourth Rings of the Business Forum Zagreb 2021, where the Ring (Prsten) Association of Croats of Bosnia and Herzegovina discussed how to quickly and efficiently adapt and continue doing business in coexistence with the ongoing coronavirus pandemic.

Pavo Zubak, president of the Ring, which brings together more than 230 businesses operating across Croatia with about 11,000 employees and generating 5.5 percent of Croatia's GDP, said they were acting affirmatively, looking to the future, and trying to build partnerships with representatives of the executive branch and harbour a relationship full of trust.

"Behind us is a difficult and challenging period, and before us lie new challenges and opportunities that we can and must take advantage of. Therefore, it's important to communicate openly in order to jointly prepare projects that can mostly be co-financed from European Union (EU) funds,'' Zuban stressed, emphasising the importance of Croatian political stability for further economic progress.

Prime Minister Andrej Plenkovic (HDZ), the patron of the forum, said that Croatian political stability was the goal of the Government because it was the first indicator that investments could be safely made here.

On the topic of this year's Ring Forum Opportunities and threats facing the Croatian economy in the post-pandemic period, the Minister of Economy and Sustainable Development Tomislav Coric said that there are many challenges that we must overcome. One of them is the absorption of more than 200 billion kuna in various financial envelopes, available over the next ten years.

For more, follow our dedicated politics and business sections.

June the 22nd, 2021 - The highly unpopular topic of Croatian property tax might soon raise its ugly head again. The first time it was suggested a few years ago saw huge public pushback and it was since put back on the shelf, but never entirely scrapped.

As Novac/Marina Klepo writes, in order to secure revenues for local self-government units, Slavko Kojic, the former head of finance in the City of Zagreb, said recently, the tax system needs to be revised and the dreaded Croatian property tax needs to be introduced. He isn't the only one who is calling for that particular tax, the introduction of which in Croatia has failed twice, and ingloriously.

The ongoing coronavirus pandemic has sharply increased everyone's budget deficits, so, with the introduction of a global corporate tax rate, property taxation is most often mentioned as a desirable way to increase revenue. Whether or not that is a good idea is in the title of a recently published work by the ECB. An analysis considered by 23 countries shows that the contribution of property taxes to total budget revenues is small, averaging about six percent at most. It is higher in countries with higher tax rates (such as the UK and the USA), at about ten percent, and Croatia is among the countries where it is below two percent.

In the decade after 2007, the share of these revenues increased in 12 countries, mostly in Greece, from about one percent, to more than five percent. Croatia is among the countries where there has been no increase in these revenues.

“In general, property taxes to governments can be an effective means of increasing revenue and managing public finances, and increasing the effective tax rate and base can offset other taxes,” authors Marta Rodriguez-Vives and Miguel Angel Gavilan-Rubio believe.

The European Commission, the OECD and the ECB have long recommended that countries shift from labour taxation to a property tax, which is less detrimental to growth. Among other things, it results in greater investment in more productive sectors than the construction of houses and apartments. Previous research has shown that developing countries could collect an additional amount of about two percent of GDP from property taxation.

Whether, when and in what form the topic of Croatian property tax will be on the agenda again remains unknown. The last time the government tried to introduce it was back in 2017, but under pressure from the public, especially from the Lipa Association, which began collecting signatures against and threatening a referendum, it was shelved and the government eventually gave up.

The main argument of the opponents of Croatian property tax is that the tax pressure in Croatia is already too high and that it will affect the broadest sections of the population, given that 88 percent of Croatian households live in their own properties. However, the point of the tax isn't to cover the poor, but the richer sections of the population who have more at their disposal.

For more, follow our politics section.

June the 10th, 2021 - Croatian Eurozone membership depends on numerous factors, and the sorting out of the mess that is the portfolio of state owned companies is just one of the pressing ones.

As Poslovni Dnevnik/Ana Blaskovic writes, although some strides have been made, state-owned companies remain synonymous with political flattery, corruption scandals and, in general, just bad business. However, if Croatian Eurozone membership is to become a reality, and if the country wishes to join the Organisation for Economic Co-operation and Development (OECD), which are two strategic foreign policy goals of the government, Croatia will have to make serious efforts to sort out the mess in the portfolio of state-owned companies.

To this end, in the form of the OECD team, in cooperation with the European Commission and the Croatian authorities, a comprehensive diagnosis was made and the government was provided with a number of recommendations for improving corporate governance.

Three are key to a significant turnaround: centralising state ownership, professionalising governance, and harmonising the legal and regulatory framework through a new law on state-owned companies, the OECD said.

"The owners of these companies are taxpayers. The idea is that they should be accountable to the public as private companies are to their shareholders,'' said Charles Donald of the working group on state-owned companies and OECD privatisation.

"Although these recommendations aren't mandatory, they're the ''acquis'' for joining the OECD," Donald said.

Sanja Bosnjak, State Secretary of the Ministry of Physical Planning, Construction and State Property, assessed the guidelines as a benchmark and made sure to state that Croatia has committed itself to reforms in the state-owned enterprise sector in the action plan for joining the exchange rate mechanism.

"This is a symbolic start to work on reforms in this area that involve the entire administration," she said.

The value of state-owned companies is estimated at a massive 190 billion kuna, making up a whopping 47.2 percent of Croatian GDP in 2019. The (central) state owns 59 of them, of which 39 have special status. 19 are wholly or majority owned by the Centre for Restructuring and Sales (CERP), and two more companies are outside that umbrella. Beyond them is a constellation of 938 local state-owned companies. Most of them operate in the segment of transport, energy, construction, finance, telecoms, manufacturing, tourism and property/real estate.

While with about 260 state-owned companies per million inhabitants, Croatia can ''boast'' of being one of the record holders in the EU, as well as in the rest of Southeastern Europe where a similar phenomenon reigns, the problem is, in typical Croatian fashion - total and utter inefficiency.

The return on capital and revenue growth is lower than it is in the private sector, and with the exception of strategic companies, more than 80 percent of non-strategic ones have failed to reach even the median return on capital of the sector in which they operate, the OECD found.

With fragmented competencies, from ministries, the CERP to various agencies, the OECD recommends the establishment of a single body with adequate mandate and resources to coordinate stakeholders and end the current practice of unclear roles and, more importantly, blurry responsibilities.

The second recommendation for Croatian Eurozone membership is aimed at professionalising management through strengthening the role and powers of the supervisory board. The current election of members of supervisory boards is open to political staffing, varies by company, and the prescribed fees are typically not very attractive to professionals.

The recommendation is to establish professional and independent committees, as well as independent auditors, and to enable supervisory boards to set their own strategies and oversee management. In doing so, the OECD emphasises in particular that government officials and policy-appointed persons cannot by any means ever be considered independent experts.

Finally, a new law is needed that should harmonise the current legal framework and underpin reforms in the state-owned enterprise sector.

In addition, the list of recommendations for Croatian Eurozone membership includes increasing transparency, strengthening internal controls, setting clear financial and non-financial targets, and simplifying the legal framework and corporate structure of companies so that state-owned companies compete evenly with private ones in the same market.

For more on Croatian Eurozone membership and Croatian politics in general, make sure to follow our dedicated politics section.

May the 31st, 2021 - Zagreb has a new mayor and a major political shift has taken place in numerous places across the country which were former HDZ strongholds. With the results finally in after the second round, just what does brand new Zagreb mayor Tomasevic from Mozemo! (We Can!) promise to do for the capital's residents?

As Poslovni Dnevnik writes, the new Zagreb mayor Tomasevic said last night that he expects the official handover to take place at the end of the week and that the first meetings are expected as early as today.

"I'm going to proudly lead this city to a better future and I will be the mayor for all of its citizens, both those for whom I was the choice and those for whom I wasn't the choice. I believe that all of the citizens of this city, regardless of how they voted and whether they went to the polls at all, want better living conditions in their neighbourhoods, more accessible kindergartens, better healthcare services, more care homes, better public transport, better bike paths, more green areas, they want this city to finally give a bit of perspective to young people,'' said the new Zagreb mayor Tomasevic when giving his winning speech.

Tomasevic and his party Mozemo! announced that they'd reduce the existing 27 city offices, and thus the head offices, down to about 15. This of course also requires a vote in the Assembly. However, the late Milan Bandic's top people will not be easily replaced - the contracts for 11 of them will cease to be valid by the end of the year, but some of them have contracts for another three years and Zagreb mayor Tomasevic cannot dismiss them, even if he fully cancels their positions in the city's offices.

"We;'l talk to all of those people and directors, we'll see what projects are underway, what the deadlines are. There will be a normal transition of power. We'll have about 15 city offices, and for coordination, 27 offices are way too many, that's clear,'' said Tomasevic after the first round.

He also spoke about his first moves between the two rounds of local elections.

“We can immediately restructure the city administration and establish a city office for reconstruction. Currently, 80 percent of apartment buildings haven't even submitted a request for renovation, because people are struggling with documentation, which is a failure of both the city and the state. The city has the human capacity to form an office that will help people meet the requirements, that they don't have to collect documentation by going to city and state offices, but that we do it for them and communicate with people on their own doorsteps. The first thing that will be felt immediately after the change of government will be in the city administration, which will become open, accessible and transparent,'' Zagreb's new mayor assured, giving hope to many still struggling shamefully after the March 2020 earthquake struck Zagreb.

For more, follow our dedicated politics section.

May the 30th, 2021 - Jelena Pavicic Vukicevic, who stepped in as Zagreb's mayor following the premature and sudden death of longtime mayor Milan Bandic, has decided to leave the political scene and pursue another career in a very different field.

As Poslovni Dnevnik writes, Jelena Pavicic Vukicevic, the current acting Mayor of Zagreb, failed to enter the second round of recent Croatian mayoral elections, so she decided on a change in her career path, opting instead to kickstart her scientific career as an assistant professor at the Faculty of Kinesiology in Zagreb, Jutarnji list reported on Saturday.

The Faculty of Kinesiology announced on its website that Dr. sc. Jelena Pavicic Vukicevic is to give an inaugural lecture as "an application in the process of election to the title of scientific-teaching title of assistant professor in the scientific field of social sciences, scientific field of pedagogy, for the subjects of pedagogy and didactics" on Wednesday.

Jelena Pavicic Vukicevic, while known for stepping into the role of Zagreb's mayor following Bandic's untimely death, is otherwise a doctor of science. Back in 2018 she received her doctorate in pedagogy, and now, after becoming an assistant professor, she will be able to work as an independent lecturer.

Her associates have confirmed that she will remain here in the Republic of Croatia and that she will teach at the Faculty of Kinesiology in Zagreb following her doctorate.

There was speculation in the media that Jelena Pavicic Vukicevic could leave Croatia upon stepping down from her current political role at the capital's helm.

The above could be heard being circulated in the corridors of the city administration because her husband works abroad, and she herself has openly said that such a possibility exists for her too, but that it is the least possible option when compared to remaining here in the country.

For more on Croatian politics, make sure to follow our dedicated section.

ZAGREB, 29 May 2021 - The second round of local elections will take place on Sunday for the mayors of 57 cities and 87 municipalities as well as for the prefects of 14 counties in Croatia.

During the second round of voting, 3,231,000 citizens are eligible to vote at nearly, 5,500 polling stations that will be set up in 432 cities and municipalities.

Four biggest cities to get new mayors

The results of mayoral runoffs will show who will run the four biggest Croatian in the next four years. In the capital city of Zagreb, the mayoral candidate of the Green-Left Coalition, Tomislav Tomašević of the We Can party faces off Miroslav Škoro of the Homeland Movement party (DP), whereas in Split, the mayoral runoff includes Vice Mihanović of the Croatian Democratic Union (HDZ) and Ivica Puljak of the Centre party.

In Rijeka, Marko Filipović of the Social Democratic Party (SDP) and independent Davor Štimac are vying for the mayoral of this northern Adriatic seaport, and in Osijek, Ivan Radić of the HDZ and Berislav Mlinarević, supported by the DP party and the Bridge party, are running in the mayoral runoff.

Those four cities will have new mayors, as none of the incumbents are in the mayoral race. In Zagreb Milan Bandić, who was at the helm of the city for 20 years, died of heart attacks on 28 February.

The outgoing mayors of Osijek and Split, Ivica Vrkić and Andro Krstulović Opara (HDZ), decided not to run for a new term, citing health reasons.

The outgoing Rijeka mayor Vojko Obersnel, an SDP official, who has been at the helm of Rijeka since 2000,  said before these local elections that the time had come for younger politicians to take the helm and supported Marko Filipović of the SDP as his successor.

Another major cities, which are county seats, for instance Varaždin, Dubrovnik, Vukovar and Sisak will have the mayoral runoffs between the incumbents and the new opponents.

In Pula, which was run by Boris Miletić of the Istrian Democratic Party (IDS) until these polls, the IDS official Helena Puh Belci faces off independent candidate Filip Zoričić.

Six counties get prefects in 1st round, 14 to have runoffs

Six counties elected their prefects in the first round of voting on 16 May, when the winners won more than 50% of the ballot, and the remaining 14 counties will have runoffs for their prefects on Sunday.

Of those six winners in the first round, four are HDZ representatives: Antonija Jozić of Požega-Slavona, Igor Andrilović of Virovitica-Podravina County, Ivan Anušić of Osijek-Baranja County and Danijel Marušić of Slavonski-Brod Posavina County.

Social Democrat (SDP) official Željko Kolar was reelected prefect of Krapina-Zagorje County and Matija Posavec, an independent candidate, was reelected as the head of Međimurje County.

In the other 14 counties, the first two vote-getters will participate in the runoffs on 30 May.

Anti-epidemic measures to be implemented at polling stations

Voters going to the polls on Sunday are required to wear protective masks and they are also advised to have their own pencils. Although the epidemiological situation has improved since the first round of the voting, the same anti-epidemic measures will be implemented on Sunday.

Polling stations open from 7 am to 7 pm

The polling stations will open on 7 am and close at 7 pm. The course of voting will be observed by 8,334 monitors, and the lion's share of them have been proposed by political parties running in the elections, while a mere 17 monitors will be at polling stations on behalf of nongovernmental organisations

ZAGREB, 21 May 2021 - Several activists of the Green Action gathered outside the national parliament on Friday to express their dissatisfaction with the strategy for low carbon development, which was presented to lawmakers on Friday morning.

The document which was today on the parliament's agenda has neither vision nor ambition. We consider it a failure, said the Green Action NGO leader Luka Tomac.

Tomac said that the scientific community had been warning for 20 years that Croatia had 10 years to make a turnaround in its climate policy, however, the document showed that the government was not inclined to make such plans and postponed the climate action for the period after 2030.

Activist Marija Mileta said that the strategy envisaged investments, import, and further development of fossil fuels even until 2050.

Opposition lawmakers say the document is outdated

During the parliamentary debate on the document, lawmakers from the Opposition parties said that the strategy was outdated.

Some said that the strategy lacked the courage to make headway.

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

May the 19th, 2021 - Of the massive sum of 5.5 billion kuna in so-called Croatian covid guarantees, only a mere 20 percent has been approved as yet. Many people, from business owners to the banks themselves, has opinions as to why that is.

As Poslovni Dnevnik/Jadranka Dozan writes, Prime Minister Andrej Plenkovic has recently underlined the key role of the state during the ongoing coronavirus crisis, recalling the fact that the Croatian Government has so far paid out 10.5 billion kuna through job preservation measures and that the ORM measures have covered a total of 687,000 employees and 120,000 employers.

However, unlike the aforementioned direct fiscal aid, which has been being extended and expanded as time has gone on, national guarantee programmes for the economy have failed miserably from their initially planned levels. Most of these programmes were adopted last year, and so far, less than a fifth of the planned amounts of Croatian covid guarantees have been approved.

Croatian covid guarantees in the amount of more than 1.53 percent of GDP are planned through budget-funded and approved by the European Commission's Covid-guarantees covering 80 to 100 percent of the loan principal. That's equal to more than 5.5 billion. According to the data presented in the Government Convergence Programme 2022-2024, so far, an amount equal to just 0.26 percent of GDP has been approved, which is equal to less than a billion kuna.

Various participants have their own thoughts and opinions about the reasons for such low utilisation, from HBOR and HAMAG-BICRO, which are in charge of approving these Croatian covid guarantees, to the banks and even to the business owners themselves. Some believe that the problem is the lack of interest of commercial banks as the first address to which enterprises typically turn.

Others (even the banks themselves) point out overcomplicated rules and the typically Croatian problem of there being far too much administration. Small enterprises also see a problem in the lack of information.

The HAMAG-BICRO agency admits that the figures are "less than expected" given the level of coverage of state guarantees. They also point out that they "promptly processed all requests they received from banks", and that the figure in that sense stands at about 154 million kuna.

It should be noted that some large banks, unlike, for example, ESIF guarantee programmes, haven't even entered into agreements with the Agency for individual national guarantee programmes.

HBOR, on the other hand, says that in addition to loan insurance and guarantee programs implemented under the coronavirus measures, almost 1.4 billion kuna in loans have been approved so far. The largest part refers to loans secured by the Export Liquidity Loan Portfolio Insurance Programme, which is implemented in cooperation with 14 banks.

"Under this programme, banks independently make the decision to include approved loans in the secured portfolio according to pre-agreed conditions, ie without the need for additional approval by HBOR for each individual loan," they explain.

They also state that all programmes within the scope of coronavirus measures remain active. Depending on the terms and conditions of a particular programme, they allow coverage of up to 80, 90 or 100 percent of the loan principal amount, and in some cases they even pay regular interest. The implementation of these programmes is currently scheduled for the end of June, and is expected to be extended until the end of the year, in line with the duration of the EC's Temporary Framework.

In addition, back in November 2020, HBOR introduced the Insurance Premium Subsidy programme, which enables liquidity loan users secured through a portfolio or individual insurance programme to subsidise the cost of their insurance premiums by up to one hundred percent.

Enterprises affected by the pandemic have so far, however, made it known that they are primarily interested in grants. For example, according to a survey by the Croatian Employers' Association (HUP) from back in February, as many as 94 percent of 1,700 respondents suggested this, while only 6 percent expressed some level of interest in financial instruments, ie guarantees and loans.

“One of the reasons for that certainly lies in excessive regulation, administration and bureaucracy in achieving the proper conditions for financial instruments. It's currently one of the most complicated in the entire EU. This was confirmed to us in talks with the banks themselves, which are trying to influence the relaxation of these conditions,'' they claim from HUP.

The low utilisation of state guarantee programmes, according to them, can be explained by the "fiscal exhaustion of the economy.''

The lower interest of enterprise owners stems, in addition, from the fact that loans, at least for larger companies, are already available at low interest rates from commercial banks. In the Voice of Entrepreneurs Association (UGP), which is primarily the “voice” of those micro and small companies, warranty programmes are generally considered “good things”, especially given the degree of coverage, yet they still see several reasons for their poor utilisation.

One of them is the problem of education or insufficient information. However, UGP also says that banks often don't treat these guarantees as first-class, so in the end the loan amounts are reduced, as they claim, "by more than half". In addition, they say that banks continue to approach loan processing very conservatively.

"If they believe that an individual company has no prospects according to their projections, it's unlikely that the loan will be approved even with a guarantee," they said, emphasising primarily coronavirus-crisis-affected companies that have current liquidity problems.

Finally, in addition to the Croatian covid guarantees provided by the state, there are currently many other guarantee programmes, including those coming from European institutions such as the EIB, which are directly obtained by commercial banks. The association also notes that "banks put more emphasis on other types of insurance, such as insurance for land, halls and machinery."

Regarding other guarantees, HAMAG also points out that enterprises still have ESIF guarantee programmes to use if they want to (individual and portfolio, for investments and working capital and for rural development).

These financial instruments, based on the signed agreements (with the Agency's guarantee for a part of the principal and agreed interest), facilitate access to financing for micro, small and medium-sized enterprises and encourage credit activity, they claim. 

HUP says that despite the biggest crisis in 25 years, enterprises are ready to create and invest in new projects (according to the survey, up to 21 billion kuna in five years) if they are given the investment momentum through grants.

Therefore, over the past few months, they've persistently called for more grants to be available to the private sector through the National Recovery and Resilience Plan, the main purpose of which is to ensure recovery from the ongoing public health and economic crisis and resilience to the future in the short term, they say.

For more, follow our dedicated politics section.