ZAGREB, 4 July 2022 - Economy Minister Davor Filipović said on Monday that the wholesale price of fuel would be restricted for the next two weeks so that major oil market stakeholders, including Ina, would bear the brunt compared to small companies, which had done well in previous years.

He underscored that the government aimed to protect citizens and help the economy, so fuel prices at off-motorway filling stations would be the same as in the past two weeks, namely HRK 13.08 for diesel and HRK 13.50 for Eurosuper 95 petrol. He added that fuel prices at motorway filling stations would be reduced to HRK 13.83 for petrol and HRK 14.28 for diesel.

Filipović said that under the latest government decision, the wholesale price would be limited for the next two weeks so that the most significant stakeholders in the oil market could bear most of the burden compared to small distributors.

"We have been continually communicating with retailers. In the past two weeks Ina did not increase its wholesale price, and small distributors on the most part sold their own stocks. Therefore, we can say that in the past two weeks they did not earn as much as they had planned," said Filipović, adding that in the next two weeks, INA would take on most of the burden and would not increase its prices for retailers to make it easier for them to operate.

He said that there were 40 small oil distributors and that in 2021 they generated total sales revenue of almost HRK 3.5 billion, and a profit of HRK 133 million. They operated equally successfully in 2020, the minister said. All of that should be taken into account and it is necessary to take a look at the bigger picture because we are in a delicate situation, Filipović said, adding that without the government's intervention, the price of diesel would be more than HRK 16.

Asked what the Prime Minister referred to when he mentioned tax scissors for profiteers, Filipović said that the government was considering all options and monitoring the situation and would act in the interest of citizens and the economy when it assessed it to be appropriate.

When asked if small distributors were unjustly complaining, he underscored that the aim was to limit wholesale prices. The situation is difficult for everyone, small distributors are not accustomed to it because their business has been successful in the past, he said.

"These past two weeks and the next two weeks will certainly not be easy for them, but I believe that we will all successfully overcome this situation together," the minister emphasized.

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21 March 2022 - There will be no gas shortages in Croatia, gas production is growing and will continue to grow in the next few years, Economy and Sustainable Development Minister Tomislav Ćorić said on Sunday.

The minister made the statement in an interview with the HTV public broadcaster in which he commented on countries' turning to their own gas production in the context of the war in Ukraine.

Croatia will increase its gas production with six new wells. With the additional annual output of 285 million cubic metres this year, total domestic production will exceed one billion cubic metres, which meets 40% of domestic demand.

Asked if in the case of a complete suspension of gas supply from Russia the increase in own production could help fully meet domestic gas demand, Ćorić said that domestic gas production was growing and would continue growing in the next few years.

"The government's goal is to affirm domestic production and increase self-sufficiency, both as regards gas and as regards electricity. Croatia will not suffer any gas shortages," he said.

Construction of LNG terminal has secured sufficient gas supplies for households, business sector

"The coming years should bring an increase in gas production not only in INA's fields but also in the fields operated by some other companies, in relation to the current production, which meets around 30% of domestic demand. I believe we can ensure up to 40% coverage of domestic demand. The alternative supply route, the LNG terminal on the island of Krk, is the absolute guarantee that our business sector and households will not be left without gas regardless of the developments in the east of Europe," he said.

Asked if Croatia could be certain that the gas from the LNG terminal on Krk would stay in the country considering that its lessees are foreign companies, Ćorić recalled that lessees are both domestic and foreign companies but that even in the event of gas shortages on the global market, the alternative supply route and own production would help meet domestic demand to the largest extent.

Asked about the price of gas, Ćorić said that the government could influence supplies but that it did not have a more significant influence on prices as they were determined by the market.

ZAGREB, 16 Dec 2021 - Ten contracts worth HRK 116.4 million were signed on Thursday to finance water management projects as part of the 2021-26 National Recovery and Resilience Plan.

The contracts were signed at the Hrvatske Vode water management company by Economy Minister Tomislav Ćorić and Hrvatske Vode general manager Zoran Đuroković.

They said these ten contracts were the first step in utilizing National Recovery and Resilience Plan funds.

The contracts concern the allocation of grants from the EU Recovery and Resilience Facility to finance investment in public water supply and drainage projects. A total of 70 projects were submitted and the maximum amount available for allocation is HRK 800 million.

Contracts were also signed on the national component of co-financing the projects.

One of the signatories is the Pula city waterworks. Their project is the most valuable at HRK 44.5 million, with the grant amounting to HRK 28.5 million. The company's director, Dean Starčić, said the money would be used to reconstruct and construct pipelines.

(€1 = HRK 7.5)

For more, check out our dedicated politics section.

ZAGREB, 22 Sept, 2021 - Economy Ministry state secretary Ivo Milatić said on Wednesday that electricity prices for households would not increase this year.

"You heard (power provider) HEP's clear statement that this is not being considered by the end of the year," he told Davor Dretar of the opposition Homeland Movement, who asked if electricity prices for households would go up this autumn.

Dario Zurovec of the opposition Fokus asked if arise was expected in a year's time given the turbulence on the world market.

Milatić said that if prices were corrected next year, the corrections "will not be as in neighbouring markets."

He said that if electricity prices continued to increase, some corrections would be inevitable, but added that Croatia was in a different position as 60% of the total energy production was renewable, with half of that from the hydro potential.

Household electricity prices won't be raised for political reasons

Mirela Ahmetović of the opposition SDP said household electricity prices would not be raised for political reasons but that they would be for businesses and that this would affect households through more expensive goods.

She said Croatia imported almost 35% of electricity and that this made it dependent on galloping prices.

Milatić said Croatia was in a "good position" with regard to the price of electricity and would stay there.

Croatia ranks 26th among 33 European countries when it comes to household and 21st when it comes to corporate electricity prices, he said, adding that refunds for energy poor citizens would increase if the price of energy they could not pay went up.

He also said that significant funds were envisaged to co-finance the construction of charging stations for electric cars.

Milatić said Croatia had a number of power providers, with HEP's companies holding 80% of the market. This is good, he said, as Croatia is not as affected by prices as some other countries.

MPs were debating an electricity market bill which envisages transition to clean energy and transposes an EU directive on common rules for the electricity market. One of its main novelties is that Croatian households will be able to buy electricity from a provider in any other EU member state and their citizens will be able to buy it from HEP.

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

ZAGREB, 8 Sept, 2021 - Minister of Economy and Sustainable Development Tomislav Ćorić said on Wednesday that he does not see any reason that would lead to higher electricity and gas bills for citizens.

Asked ahead of an inner cabinet meeting whether electricity and gas bills would increase, Ćorić said that he did not see any reason at the moment for that to happen.

"There is no absolute certainty that that won't occur, however, I do not see any reason for it to happen," he said.

In reference to an electricity price hike for enterprises, Ćorić said that one needs to be aware of the fact that the domestic electricity market is liberalised and functions in line with European and global markets.

"Those enterprises who concluded long-term contracts last year will not feel the price hike in the coming period, however, those enterprises which are doing that now will feel the adjustment on the market," he underscored.

The assumption is that many enterprises have protected themselves against unexpected changes and Ćorić doesn't believe that the price hike for electricity will be as high as 40% as reported in the media over the past few days, however, he added, a certain adjustment in prices will occur.

"This tells us that business conditions need to be stabilised, that is to avoid certain risks, and that can be achieved so that prices are agreed for a longer period," said Ćorić.

Asked whether entrepreneurs who didn't manage to conclude long-term contracts would transfer the higher cost to its consumers by increasing the price of their products, Ćorić said that the price of electricity is one of the key inputs in production which directly results in an increase in the cost of production.

"You either have to decrease your margin or increase the price of your product. That is how the market functions," he concluded, adding that those enterprises which were astute and contracted the price of electricity can now provide more competitive products.

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ZAGREB, 24 Aug, 2021 - Member of Parliament Anka Mrak-Taritaš on Tuesday said that it seems there won't be anything of Zagreb's reconstruction following the earthquake that hit the city 17 months ago and that the lack of goodwill for reconstruction is "the greatest shame of Andrej Plenković's government." 

Seventeen months after the earthquake, there is still nothing regarding Zagreb's reconstruction. There is no longer even any meetings between the government and City authorities. Damir Vanđelić, the director of the Fund for Reconstruction and Economy Minister Darko Horvat have even stopped debating in the media about who is more at fault for that," Mrak-Taritaš told a press conference on Tuesday.

As an example of what could have been done in that time, she recalled that the Empire State Building with its 102 floors was built in sixteen months' time, "and without disrupting traffic."

MP Mrak-Tartiaš warned that eight months had passed since money from the EU Solidarity Fund was paid into the government's account and "that Croatia is at risk of being the first member state to not spend that money within the set deadline and that the country might be compelled to repay it to the EU budget, while at the same time the government is using alibis why things are not being done, from the law to the programme of measures and the fund." 

The sole GLAS lawmaker believes that "it is absolutely certain now" that there won't be anything of Zagreb's reconstruction as that "requires the know-how, good management and will, yet there is none of that." She concluded that the fact that there is no will is the Plenković's government's greatest shame and sin of not doing anything."

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ZAGREB, 19 Aug, 2021 - Economy and Sustainable Development Minister Tomislav Ćorić told the press on Thursday that Croatia's economy would expand by more than five percent in 2021 on the back of excellent results in the tourist sector so far this year.

Considering the trends in the tourist season and results in July and in the first half of August, I can point out that we in the government expect that our forecasts of economic growth of more than five percent will turn out to be correct, he told reporters after the government's meeting.

If the positive trends in the tourist trade continue in the remainder of the season, the growth can be even higher, he said, adding that he is optimistic about that.

After a downturn of 8% in 2020, the Croatian economy is expected to rebound by 5.2% in 2021, according to the government's projections.

Ćorić added that the government had today decided to allocate HRK 30 million for the completion of an entrepreneurial centre in prefab containers in Petrinja.

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ZAGREB, 21 July, 2021 - Minister of Economy and Sustainable Development Tomislav Ćorić on Wednesday spoke of an informal EU meeting of environment ministers in Slovenia on new legislation on climate and the European Commission's recommendation to reduce greenhouse emissions by 55% by 2030 compared to 1990.

He explained at a press conference that this refers to 12 legislative proposals from various areas that are being considered by EU member states in reference to the set objectives.

Ćorić said that this was an important step towards strengthening the EU as a leader in the fight against climate change.

Tax on carbon is a novelty - legislation is very ambitious

Ćorić explained that the new legislation envisages a carbon tax that should protect production in the EU compared to countries that export to the EU but are not encompassed by EU standards and mechanisms.

We are aware that if nothing is done in the next ten years, the potential costs of the damage could be much higher than the costs of transforming economies, he said.

With reference to financing that transformation, Ćorić said that Croatia has more than HRK 60 billion available over the next ten years to be spent in various commercial segments to reduce carbon emissions.

He underscored that the new legislation is very ambitious and a step towards Europe's economic transformation.

Price hikes to be eased with absorbed funds

He said that transition is a huge challenge and is being disputed by some but that it is also a huge opportunity for economies like Croatia through generous allocations of EU funds.

He recalled that Croatia's energy sector has a very small portion reliant on carbon, considering the significant share of hydro-power and potential for renewable sources.

Referring to the announcement for the construction of a new block at the Krško Nuclear Power Plant (NEK) in Slovenia, Ćorić said that that project could take up to a decade to be achieved, adding that Croatia has still not been officially informed of that project.

He recalled that obligations existed under international conventions for projects of that nature with a cross-border impact. Croatia has been advised of extending the lifespan of NEK to 2043.

He underscored that NEK is a stable source of energy and believes that it will continue to be so. He added that his ministry is interested in seeing more formal proposals to see whether Croatia would enter into a partnership with Slovenia regarding the construction of a new block at the Krško plant.

He added that Croatia was monitoring the situation with the Paks Nuclear Power Plant in Hungary because Croatia imports 30 to 45% of energy needs from abroad, depending on the hydrological situation.

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ZAGREB, 26 March, 2021 - A HRK 12.5 million EU grant agreement for the construction of a composting plant in the southern town of Metković was signed on Friday by Economy and Sustainable Development Minister Tomislav Ćorić and the director of the local Čistoća waste management company, Tomislav Jakić.

The project, which will be implemented as part of the Operational Programme Competitiveness and Cohesion 2014-2020, is worth more than HRK 24 million, of which 50% is co-financed by the EU.

Ćorić said that the composting plant would serve Metković as well as Opuzen and neighbouring communities.

The plant's annual capacity is 5,000 tonnes and it guarantees that biodegradable waste in the River Neretva valley will be managed in the best way possible, said the minister.

Dubrovnik-Neretva County head Nikola Dobroslavić said that Metković was the most advanced local government unit in terms of waste management.

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

ZAGREB, 19 March, 2021 - Croatia will enter the euro area on 1 January 2023 at the earliest, and introducing the euro has a number of advantages but for those advantages to be greater the economy needs to be more flexible, including with regard to the labour market, a conference heard on Friday.

The conference, focusing on the introduction of the euro as the official currency in Croatia, was organised by the students' association Financial Club.

Croatian National Bank (HNB) Governor Boris Vujčić said in his opening remarks that Croatia cannot enter the euro zone before 1 January 2023.

"Whether Croatia will enter the euro area on 1 January 2023 or a year or two later, depends on when it will meet the nominal convergence criteria," said Vujčić, recalling that in July 2020, Croatia entered the European Exchange Rate Mechanism II (ERM II), a sort of waiting room for the euro.

He explained that the ERM II envisaged a minimum two years of participation in it so that a candidate aspiring to join the euro area can meet the nominal convergence criteria (Maastricht criteria). On the other hand, if it does not satisfy the criteria, which refer to the stability of the exchange rate, prices and interest rates, the budget deficit and the level of foreign debt, a country can remain in the ERM II indefinitely, Vujčić said.

He recalled a survey indicating that citizens fear that with the introduction of the euro the standard of living will deteriorate and prices will increase. However, surveys in countries that have already introduced the euro indicate that prices increased by 0.23 percentage points on average in the year when the euro was introduced, mostly for everyday goods such as coffee. Prices of such products are relatively lower so their increase could have been relatively high due to rounding off.

"That left the impression in public that prices increased more than they did," explained Vujčić, underscoring that the standard of living did not fall in any country that introduced the euro but rather it improved.

Ćorić: Biggest advantage to companies exporting to euro area

Minister of Economy and Sustainable Development Tomislav Ćorić said that it was clear that citizens would not start living better on the first day of introducing the euro, however, what points to better prospects was the fact that the macro environment in the euro area was free of risks that non-member countries were faced with.

The risk premium in all countries that entered the euro area has dropped, said Ćorić, noting that that was something that in normal circumstances should  bring benefits to Croatia, such as reducing yields on long-term security instruments and lower interest rates on commercial and consumer loans.

Considering, however, that we live in "fairly radical economic times," and a period of very low interest rates, the effects which countries that entered the euro area some ten years ago had would be somewhat lower, however, they would still be significant, he said.

The advantages are potentially biggest for export-oriented companies considering that the exchange rate risk will be eliminated, he said.

Ćorić said that the project for euro introduction was not an end in itself but was primarily a very good tool for Croatia's long-term economic growth and development.

Mačkić: Flexibility of labour market, final goods and services market

President Zoran Milanovic's economic adviser, Velibor Mačkić, conveyed the president's message saying that it was necessary to discuss the benefits and potential harm of Croatia joining the euro area.

Mačkić believes that Croatia has not developed its own institutions sufficiently and that that poses a problem. "The country needs a different economy, a much more flexible economy, to be able to benefit more significantly from the monetary union," said Mačkić.

He added that the labour market and the market of final products and services need to be more flexible.

Mačkić underlined the importance of an efficient fiscal policy and of the reform of the tax system which Mačkić believes needs to change from "a consumption-based to income-based tax system."

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