ZAGREB, 12 Nov 2021 - At the end of October 2021 242,000 Croatians owed HRK 18.2 billion while 15,200 businesses owed HRK 4 billion, show data from the Financial Agency (FINA).

The number of physical persons with a debt of 242,114 was almost the same as in the previous month and 2.1% down from October 2020.

Their debt principal amounted to 18.2 billion, 0.4% more than in September 2021 and 4.9% more than in October 2020.

With an interest debt of HRK 6.8 billion added to that amount, natural persons owed a total of HRK 25 billion.

Most of the debt, amounting to HRK 5.8 billion (not including interest) was owed to banks.

The debt of businesses of HRK 4 billion was by HRK 272.6 million or 6.3% down from September 2021 and 1.2 billion or 23.2% down from October 2020.

The interest owed by businesses amounted to HRK 1.1 billion, putting their total debt at HRK 5.1 billion.

(€1 = HRK 7.511616)

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ZAGREB, 2 June, 2021 - Every entrepreneur should have one opportunity to have their debt forgiven during their entrepreneurial life and to be able to do business without hindrance, Večernji List daily said on Wednesday.

This is provided for by the Directive on preventive restructuring frameworks and second chance from 2019, which EU member states have to introduce into their legislation by mid-2021, that is in a month.

The Croatian Ministry of Justice has also announced that it will initiate amendments to the Bankruptcy Act and the Consumer Bankruptcy Act to adapt them to the Directive, but a bill of amendments has not been presented yet so it remains unclear whether Croatia will additionally regulate discharge of business debts.

In Croatia, there are currently about 16,000 entrepreneurs with blocked accounts, and about 8,000 of them are companies, while the second half are craftsmen and other entrepreneurs who keep business books. The total debt of all entrepreneurs amounts to about HRK 6 billion.

The situation is much more difficult for nearly 240,000 citizens with blocked accounts, whose debt principal totals about HRK 17 billion.

So far, the state has twice written off debts of citizens with blocked accounts as part of special campaigns, but that has not significantly affected the overall situation.

Debt write-offs for entrepreneurs were the most common in pre-bankruptcy settlements established by former finance minister Slavko Linić during Zoran Milanović's term as prime minister. Later, the law changed and debt write-offs are now less frequent.

The EU Directive does not address citizens' debts directly, but it proposes that states apply the principle for debt forgiveness for entrepreneurs to over-indebted citizens.

Under the Directive, everyone should have the opportunity to have their debt written off in a procedure that should last no longer than three years, Večernji List said.

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ZAGREB, 14 April, 2021 - Health Minister Vili Beroš said on Wednesday that the government and representatives of drug wholesalers had reached agreement on a debt settlement scheme.

The issue of the debt made the wholesalers restrict and defer the deliveries of medicines to hospitals in late March.

"Today's meeting is one more step towards the debt settlement," Minister Beroš said adding that only together the two sides could solve this decades-long issue which became exacerbated during the COVID-19 pandemic.

Finance Minister Zdravko Marić outlined the elements of the scheme.

In the next three months we will transfer some funds to the Croatian Agency for Health Insurance (HZZO), and the Health Ministry so as to enable the cash flow in those institutions and enable them to pay liabilities towards wholesalers and providers, Marić said adding that those funds would be ensured through the redirection and reallocation of outlays in the state budget.

The monthly allocation for hospitals will be HRK 600 million and an additional 300 million for pharmacies.

In June, the government is likely to conduct a budget revision whereby an additional cash inflow for hospitals and pharmacies will be ensured so that debt deferment period lasts no longer than 180 days for hospitals and 120 days for pharmacies.

In June alone, 135 million kuna will be directed to pharmacies and HRK 760 million to hospitals, with the plan to respect the deferment periods in the remainder of the year.

Marić hopes that this scheme will remove any need for any new meeting with wholesalers on the debt.

The finance minister also expects reform efforts in preventing any  further accumulation of liabilities and in this context he mentioned the plan to cut the deferment period to 60 days.

The wholesalers' representative Diana Percač thanked the ministers for efforts to provide funds to cover the debt.

She also pledged the continuation of the delivery of drugs to pharmacies until the end of this year.

(€1 = HRK 7.571658)

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ZAGREB, 4 March, 2021 - At the November of 2020, Croatia's public debt totalled HRK 327.8 billion, rising by 35.3 billion, or 12.1%, from the end of 2019, and the country's public debt-to-GDP ratio increased by 15.3 percentage points to 88.6%, according to the Croatian National Bank (HNB) data.

Month on month, the public debt increased 0.6% at the end of November 2020.

A strong rise in the public debt in the first eleven months in 2020 is a result of the response to the crisis caused by the global COVID-19 pandemic, which reduced a large number of economic activities and consequently budget revenues while the state stepped in to cover a budget gap, according to assessments made by RBA bank's analysts.

The analysts also expect the reduction of the debt-to GDP ratio in 2021 below 85%, provided that economic recovery forecasts come true in the course of this year.

(€= HRK 7.5)

ZAGREB, October 18, 2020 - The moratorium on debt enforcements ends on Monday, October 19, and according to available data, citizens owe the biggest amount of money to financial institutions.

Citizens owe the biggest amount of money to banks, which includes loans and credit card bills, so the debt to the financial sector amounts to 35% of the total debt.

The most common creditors are from the telecommunications sector, but the total debt to them accounts for less than 5%.

Utility debts, including water, gas and electricity bills, make up 1.6% of the total debt.

Enforcement to be carried out in three phases

Debt enforcement will be conducted in three phases, starting on October 19, November 20 and January 20.

In the first phase, enforcement decisions made on the basis of applications received by June 30 will be issued, those received by August 31 will be issued in the second phase, and in the third phase decisions made on the basis of applications received by October 18 wil be issued.

Most citizens owe up to HRK 10k

Data from the Financial Agency's (FINA) system for execution of enforcement over monetary assets have shown that the largest number of enforcement debtors, 109,000 or 46% of citizens with blocked bank accounts, owed up to HRK 10,000, while the total amount of their debt was HRK 396 million.

For every third enforcement debtor, the creditor is a bank or another financial institution, FINA has said.

FINA's data have also shown that 1,475 citizens owe as much as HRK 6.7 billion, or 40.2% of the total debt of citizens, which amounts to HRK 16 billion.

Among them, there are even those who owe about HRK 30 million.

There are 101,500 citizens who owe more than HRK 10,000 but less than HRK 100,000, and their total debt is HRK 3.6 billion.

Amendments to Act on Execution of Enforcement over Monetary Assets

On April 18, FINA stopped executing enforcement over monetary assets of a total of 244,865 enforcement debtors who are natural persons. The execution of 1,089,620 enforcement procedures was halted, and the total amount of uncollected debt was HRK 23.9 billion.

Mid-July, the government extended the moratorium on enforcement over monetary assets of citizens and natural persons, as well as on the execution of all enforcement procedures.

Prime Minister Andrej Plenkovic said on Wednesday in a government session that he expected there would be fewer enforcements than before the measures were adopted.

This week, amendments to the act on execution of enforcement over monetary aseets were put to public consultation, and Justice and Public Administration Minister Ivan Malenica said that the government had shown that it was sensitive about social matters since enforcement procedures would be about HRK 600 cheaper, and Christmas and Easter bonuses, as well as other social benefits, would be exempt from enforcement.

Association of enforcement debtors: Amendments are unfair

An assocation of enforcement debtors said on Saturday that national security had to be taken into account when working on the act on execution of enforcement at such extraordinary times, and said that amendments to that law could not be accepted because the law was unfair and carried too many risks.

The association said in its press release that it was impossible to predict all social implications the "new normal" would have, noting that the coronavirus pandemic was redefining the face of the world and Croatia.

(€1 = 7.57 HRK)

ZAGREB, June 17, 2020 - Finance Minister Zdravko Maric said on Wednesday the healthcare system's debt in the last quarter reached HRK 9 billion and announced changes and reforms necessary to make the system financially tenable.

"It's still not ten billion but the debts are rising. Given the coronavirus, it's normal that we had additional needs to finance healthcare. The system turned out to be very good in terms of the functioning of doctors, nurses and other staff, but at the same time the financial circumstances are such that it is necessary to make certain changes, reforms so that the system becomes financially tenable," he told reporters after an inner cabinet meeting.

Asked about the amount of the debt, Maric said that in Q1 2020 it was HRK 9 billion.

ZAGREB, May 26, 2020 - Croatia's foreign debt totaled HRK 41.1 billion in January, falling by 6.5% compared to January 2019, however RBA analysts predict a rise in the debt throughout 2020 due to the corona crisis.

Croatia's gross foreign debt of 41.1 billion at the end of January 2020 rose by 0.6% from December 2019 when it amounted HRK 40.9 billion, however, it contracted by 2.8 billion euros or by 6.5% on the year, according to the figures recently published by the Croatian National Bank (HNB).

However, considering the new circumstances in connection with the coronavirus pandemic that caused a lockdown globally as well as in the Croatian economy, RBA analysts expect the deterioration in Croatia's external vulnerability.

The analysts said that a positive streak in the current account since 2013 would be likely snapped, and the country's gross foreign debt would rise both in the real and nominal terms.

"Recovery and relaunching the economic activity, which will require high amounts of funding, will lead to a rise in the borrowing abroad by all key sectors," said the analysts of the Raiffeisenbank Austria (RBA).

The recall that the government has recently planned more borrowing both on the local and foreign markets.

As a result of growing debt and the expected sharp economic downturn, Croatia's gross foreign debt to GDP ratio is likely to increase, too.

At the end of 2019, Croatia's gross foreign debt to GDP ratio was 75.7%.

(€1 = HRK 7.579243