October the 7th, 2021 - The Croatian Recovery Plan, more precisely the Recovery and Resilience Plan (NPOO) has been talked about at length recently. In the challenging post-coronavirus age, at a time when global economies are still reeling from the unprecedented and utterly devastating impact of the global pandemic, few things are more important to Croatia than this massive EU payout.

The Croatian Recovery Plan envisages as much as 9.5 billion kuna going directly to the country's much needed digital transformation, which should force Croatia well and truly into modern times and away from excessive paperwork, standing in lines and wasting time.

As Poslovni Dnevnik/Lucija Spiljak writes, in this day and age, smart industries represent the wheel of development of the Croatian economy and society, and the precondition for this doesn't lie solely in digital transformation, but also in the cooperation of the Croatian Government, the domestic economy and the academic community.

Recognising the importance of education about the Smart Industry model in Croatia, Poslovni dnevnik organised a conference entitled Smart Industry 2021, during which, State Secretary of the Central State Office for the Development of the Digital Society, Bernard Grsic, spoke about smart industries in the focus of national plans, more precisely the Croatian Recovery Plan.

''Digital transformation is a change from one thing to another, and first we need the awareness that we can and do actually want to do it. Man is at the centre of these events and we mustn't simply allow technology to do everything itself. Priorities for implementing this policy in the field of the digital transition of the economy relate to encouraging digital transformation and the application of advanced technologies in the economy and in society, strengthening strategic digital capacities and increasing the level of digital maturity of enterprises, establishing standardised platforms for connection and business, and the proper development of state information infrastructure.

The Smart Industry seeks to strengthen the competitiveness of a particular industry, which means not only an industrial transition but also social transformation, openness and cooperation from the government, as well as from the economy and from universities. In the Croatian Recovery Plan, the contribution to digital transformation stands at 20.4 percent, this is equal to more than 9.5 billion kuna, which is to be distributed across all segments of society.

The goal is to seize this opportunity and accelerate the digital transformation in the Republic of Croatia, create high-paying jobs in the domestic economy for the implementation of the Croatian Recovery Plan and ensure fast and efficient public administration, as well as position Croatia above the EU average on the DESI index,'' concluded Grsic.

For more on the Croatian Recovery Plan (NPOO), make sure to check out our dedicated politics section.

ZAGREB, 3 Oct, 2021 - An agreement on cooperation in drafting and implementing the Vinkovci urban development strategy for the financial period 2021-2027, worth at least €25 million, was signed in this eastern city earlier this week by the mayors of Vinkovci, Otok and nine adjacent municipalities.

Besides Vinkovci, as the centre of the urban area, and the city of Otok, the agreement was signed by the municipalities of Andrijaševci, Ivankovo, Jarmina, Nijemci, Nuštar, Privlaka, Stari Jankovci, Stari Mikanovci and Vođinci.

This agreement has opened up new opportunities for the city of Vinkovci and the entire urban area, said Vinkovci Mayor Ivan Bosančić, underscoring that this was an opportunity to give fresh impetus to the development of the urban area using the mechanisms and funds of the European Union.

"Through the ITU mechanism, local government units connect and work together, and we have many links. From the economy and culture to education, there is almost no area in which we are not connected," he said.

According to Bosančić, the signatories of the agreement will have about €25 million at their disposal for projects important for the development of the area, and the focus will be on projects in the field of education and economy.

Otok Mayor Josip Šarić said the city authorities were interested in investments in projects for the reconstruction and construction of unclassified roads.

"This is a great opportunity to use EU funds for projects we consider most necessary," the mayor of Otok said.

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September the 28th, 2021 - The well known Croatian company DOK-ING has signed a letter of intent to form a Croatian-Slovenian consortium of companies in the field of security and defense with the Croatian companies Orqa and Defensphere and the Slovenian companies MIL Sistemika and Bijol.

As Poslovni Dnevnik/Darko Bicak writes, an agreement was also signed between the Croatian and Slovenian defense industry competitiveness clusters with the aim of providing support to the defense industry sector of the two neighbouring countries in the use of available EU funds. The signing was held as part of the eighth International Fair of Defense, Security, Protection and Rescue SOBRA, which took place from the 23rd to the 25th of September, 2021, in the Slovenian town of Gornja Radgona.

The new Croatian-Slovenian consortium, composed of members of the competitiveness cluster of the defense industry of the two countries, opens the possibility of joint application to the future European Defense Fund and the use of European Union funds made available in the field of defense. The association of cluster members is also a consequence of the long-term promotion of connecting companies that, through the transfer of knowledge and joint action, work to strengthen their own capabilities for the development of high-tech products and positioning on the highly demanding international market.

"DOK-ING has been present in the defense industry worldwide for thirty years now, and it's always looking for new and innovative solutions that can improve its existing product portfolio and develop completely new products for the global market. We're extremely pleased that as an international leader in the market of robotic systems for special purposes, we've signed a letter of intent for cooperation on the eve of the upcoming European Defense Fund with the companies Orqa, MIL Sistemika, Bijol and Defensphere.

By connecting these companies, transferring knowledge and new technologies, as well as exchanging business experiences on foreign markets, opportunities open up for the development of advanced innovative systems that can be financed from European Union funds. This is our opportunity to translate our common knowledge and potential into products that will be imposed as systems of the future of the defense industry, and which will be competitive worldwide,'' said Ana Pesic, a member of the board of Croatia's DOK-ING.

“Orqa d.o.o. is an international market leader in the field of research and the development of video glasses and systems for remote-controlled and unmanned platforms. The European Defense Fund is an excellent opportunity to finance projects that combine the knowledge, experience and capacity of companies from our consortium into globally competitive products. The key to the resilience and growth of the Croatian defense industry is in the direct support of the competent state administration bodies to projects that have great added value and high-tech elements. I believe that the coming period, supported by the European Defense Fund, will be a new impetus for the development of the defense industry sector,'' said Tomislav Krolo, Chief Operating Officer (COO), at Orqa d.o.o.

DOK-ING is otherwise a well known and respected Croatian company based in Zagreb which boasts offices in the USA and South Africa. It is an international market leader in the design, production and delivery of high quality and proven robot systems for special purposes to customers from around the world.

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September the 20th, 2021 - 407 Croatian locations (cities and municipalities) received containers for separate waste collection from households that were procured and distributed through the Fund for Environmental Protection and Energy Efficiency recently.

As Poslovni Dnevnik/PD and VL native tim writes, to be more precise, Croatian locations received 1,230,695 various bins and containers of various volumes for the separate collection of paper, plastic, biowaste and other recyclable waste.

The containers were procured as part of a project with a total investment of around 370 million kuna, and the vast majority of this amount was provided through EU funds through the Ministry of Economy and Sustainable Development.

“Logistically speaking, this was a very demanding project. After the public procurement procedure was carried out and contracts were signed with the selected bidders, a schedule of activities was made and deadlines for their execution were agreed.

In the Environmental Protection Sector, several teams have been formed that have been on the ground almost every day for the past six months and in constant communication with representatives of local governments, utilities and suppliers,'' explained Aleksandra Cilic, pointing out that despite all of the unprecedented challenges the coronavirus pandemic and the earthquake presented, this project has been successfully implemented on time.

She added that they also had the professional support of other sectors and services from within the same fund, which took on a lot of work and without whose help this project couldn't have been successfully implemented.

"Now that almost every household will have the proper containers for separate waste collection, no one will have an alibi or an excuse not to do so," said Cilic.

The rate of separate waste collection from Croatia is encouragingly growing from year to year. According to the data for last year, it amounted to 41 percent, and it is to be expected that the result for this year will be even better with this newly purchased and distributed communal infrastructure.

According to Cilic, the number of Croatian household properly separating their household waste will certainly grow, but education at all levels is crucial - from utility companies engaged in the processes involved to regular citizens.

"This summer, a video of an Italian tourist who wanted to throw his plastic packaging in the designated waste container spread across social media, but after he lifted the lid, he was unpleasantly surprised when he saw that all the waste had ended up being placed in the same bag. Unfortunately, such a reckless practice of some utility companies puts a dampener on all the efforts made to establish a waste management system and it undermines public confidence in the same system,'' stated Cilic.

Regardless of such isolated cases, it is crucial that people collect and dispose of their waste separately because all useful components, especially paper, plastic, glass and bio-waste are all properly recycled or composted. It is therefore necessary to transform a take-use-discard linear economy into a true circular economy, which is why thinking about sustainable circular systems needs to be implemented across all activities and sectors, including policies, products, production processes and business models. Education and public information play a key role in all this, and many Croatian locations now having the proper means should mean there can be no more excuses.

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ZAGREB, 6 Sept 2021 - The Minister for Regional Development and EU Funds, Nataša Tramišak, on Monday presented Osijek-Baranja County Prefect Ivan Anušić with six contracts for co-financing the implementation of EU projects at the local and regional level.

The contracts concern projects in which the Osijek-Baranja County administration is the holder or beneficiary of grant contracts, and their total value is HRK 10.9 million.

According to Minister Tramišak, the most valuable contract concerns the construction of a business center in Osijek. The project is worth HRK 65.5 million, of which HRK 45 million has been secured from the EU's Competitiveness and Cohesion operational program and the City of Osijek's ITU mechanism, while HRK 9.3 million will come from the state budget.

The center is expected to be built and become fully operational in a year's time and serve as a venue for trade shows and similar events.

Tramišak said that 49 contracts for co-financing EU projects in Osijek-Baranja County, worth over HRK 78 million in total, would be presented soon. She added that their purpose was to support local government units and their utility companies in the successful implementation of EU projects.

(€1 = HRK 7.5)

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August the 25th, 2021 - Numerous continental Croatian cities are hoping to get their hands on European Union (EU) Funds. Koprivnica, Cakovec and Varazdin are all on the hunt for EU cash injections following their recent decision on cooperation.

As Poslovni Dnevnik/Ana Blaskovic writes, this year's Spancirfest not only turned the historic core of Varazdin into a festival stage once again, but also opened the door to cooperation between three continental Croatian cities: Varazdin, Koprivnica and Cakovec, all of which agreed on a joint application for individual European Union projects.

"We've agreed on the models of our future joint cooperation in applying for some EU projects and funds, where each of us is too small to be able to apply on our own,'' said Varazdin Mayor Neven Bosilj, who hosted Cakovec Mayor Ljerka Cividini and their colleague Misel Jaksic from Koprivnica on Monday.

According to Bosilj, these three continental Croatian cities are among the top six in the entire country in terms of employment and are the (probably rather unexpected) drivers of economic activities.

At the same time, these three continental Croatian host the largest traditional events in the country, such as the aforementioned Spancirfest which is held annually in beautiful Varazdin, whose edition this year has been being visited by about 20,000 people a day, Porcijunkulov in Cakovec, and the Koprivnica Renaissance Festival, all of which attract crowds year after year.

"Tourism doesn't solely exist down by the coast. These are the three most important tourist events not only in this part of the country, but in the whole of continental Croatia,'' said Bosilj.

Cividini stressed that they must not miss out on grabbing the opportunity for cooperation on projects that are opening up through the ITU mechanism and other European Union funds.

"Cooperation will take place through the economy, tourism, cultural development. Today, we've shown that we have the will and that we want to do this, and there are a lot of projects," she said.

"I think this is a good trigger for our agricultural production, traditional crafts, cultural development and everything that makes life what it is up here in the north," Jaksic said.

For more on Croatian access to EU funding, follow our dedicated politics section.

August the 22nd, 2021 - Bad news for the well known Galic Winery, which now must return a massive 10 million kuna from the Wine Envelope which was allocated to it.

As Poslovni Dnevnik writes, the Galic Winery, owned by entrepreneur Josip Galic from Kutjevo, must return 10 million kuna from the Wine Envelope allocated to it through the European Agricultural Guarantee Fund for the construction of a new winery building in Kutjevo which was worth seven million euros.

The Agency for Payments in Agriculture, Fisheries and Rural Development, based on the recommendation of the European Anti-Fraud Office (OLAF), recently issued a decision to annul the decision on the Galic Winery project approval and made a decision on the return of paid aid in the amount of 10,047,442.29 kuna, Jutarnji list writes. This is the first such case, according to the same publication.

OLAF stated that during the construction of the winery, there was malversation and abuse in the selection of contractors, ie subcontractors. In this particular case, one of the subcontractors of construction work on the wine cellar was the company Presoflex owned by Ina Galic, the child of Josip Galic.

It should be noted that the Galic Winery hired one company as a contractor, and it then hired five subcontractors, including Galic's child's aforementioned company, which OLAF considers a conflict of interest, explaining that ''the legislative framework prohibits users of EU funds from projects for which they received money to hire companies with which they have personal or business connections,'' reports Jutarnji list.

The Galic Winery has stated that it is shocked by this decision, which they're trying to challenge because they consider it to be illegal. The Agency said that the decision was made “based on Article 33, paragraph 2 of the Ordinance on the implementation of the measure Investments in wineries and wine marketing from the National Wine Sector Assistance Programme 2014-2018, which stipulates that the Paying Agency will request a refund if it is determined that the beneficiary has acted contrary to the provisions of the Ordinance and the rules for the use of such funds for the Investment measure, ie in case of an established irregularity,''

They also stated that during the approval of the now disputed Galic Winery project, as well as during the control of its implementation, the Agency didn't know that a company owned by Galic's offspring was being engaged in the project, and that the beneficiary had previously been instructed in all of the obligations based on the project approval decision.

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ZAGREB, 20 Aug, 2021 - EU Funds and Regional Development Minister Nataša Tramišak said on Friday in Split that HRK 7.8 billion would be earmarked for development projects on Croatian islands until 2027.

The national plan for the development of islands will provide a scope for investments, and we have assessed that 7.8 billion kuna will be necessary for the implementation of measures envisaged by the plan. However, that amount is not definite and other ministries are expected to make contributions to additional investments in compliance with the money made available in EU funds until 2027, Minister Tramišak told the press.

Tramišak held the news conference after she awarded seven contracts, worth HRK 22 million in total, on regulating the state's co-funding of the EU-funded projects.

The total value of those seven projects which will be implemented in Split-Dalmatia County stands at 223 million kuna, and 140 million will be covered by EU funding.

After Split, Tramišak travelled to Hvar for a ceremony of awarding HRK 4 million worth of contracts on that island.

The registry of islands and the national island development plan will be presented at that ceremony.

More than six billion kuna was invested from national funds into different activities and projects for the islands in the 2016-2020 period.

Croatia has 1,244 islands, and 45 islands are permanently or temporarily inhabited, with 51 maritime routes, 58 community health centres, 102 primary and 13 high schools, and 23 care homes.

(€ 1 = HRK 7.482172)

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August the 13th, 2021 - Croatian administration is, for anyone who has had even the remotest of dealings with it, horrendously slow. The country is famous for its draconian rules and masochistic love of stamps and red tape, and needing to get anything done in a rush is outside the realm of normal expectation. Croatian project processing is unfortunately no different, and it represents a major obstacle in withdrawing EU cash.

As Poslovni Dnevnik/Jadranka Dozan writes, when it comes to the withdrawal of money from the European Structural and Investment Funds for the previous financial period (2014-2020), Croatia has shifted to a somewhat higher speed. In one year, the country has fortunately grown by almost 20 percent in terms of utilisation, Minister Natasa Tramisak recently emphasized.

However, that means more than two-fifths of the financial envelope, worth about 80 billion kuna or 10.7 billion euros, still remains to be withdrawn. So far, more than 45 billion kuna has been paid out, ie 56 percent (with 47 percent of it having been finally certified).

A kind of fuse for the maximum use of available funds in the given deadline, which is the end of 2023, is the "stock" of contracted projects. About 20 percent more than the available "quota" was agreed upon. In addition to that, the procedures for users, including the rules for public procurement, have been facilitated, and the communication of the competent ministerial department with the European Commission (EC) has been accelerated, they claim.

With the exception of things having been skewed in the sense of the context of the ongoing pandemic, the absorption process is no longer at a snail's pace, says Tramisak. She attributes the difference in terms of utilisation compared to some other EU member states to the fact that this was Croatia's very first programme perspective, while others had been transferring large projects from previous ones, so they were faster in terms of money withdrawal.

In addition, in the first two years of the past period, calls and contracted funds weren't announced at all, and this, as she points out, is difficult for Croatia to compensate for.

However, there is something obvious in the (in)efficiency of Croatia's infamous public administration in the selection procedures for projects set to be co-financed through EU funds. The results of the recently published analysis from Jaksa Puljiz, Sanja Malekovic and Sanja Tisma from the Institute for Development and International Relations are also on this track.

They analysed about thirty calls under the Competitiveness and Cohesion Operational Programme 2014-2020 (OPCK) as the most financially important programme co-financed from the EU budget for Croatia, implemented in the period between 2014 and 2018 and worth about 12.4 billion kuna. It was confirmed that the low efficiency of the system is mostly influenced by Croatian project processing times, ie in terms of dealing with those applications. In Croatia, this implies a significantly longer time than the time prescribed by the Common National Rules, but also than the time of implementation of selection procedures that some previous studies have shown for other EU countries.

Making the first decision on funding in as many as 97 percent of the analysed calls lasted longer than 120 days for Croatia, and most often their duration was from 180 to 360 days. This is likely not a surprise to anyone who has ever tried to do, well, just about anything official here.

“These are extremely long deadlines that have numerous consequences for the absorption and the quality of project implementation. In such a long period of waiting for the beginning of their realisation, it's clear that the circumstances which are very important for successful implementation can change significantly,'' the aforementioned authors point out.

For comparison, they say that similar research once showed that in Germany, neighbouring Slovenia, Austria, the Czech Republic, the Netherlands and Slovakia, between 31 and 49 percent of respondents using EU funds waited less than three months for their project evaluation results.

The problem of the duration of these Croatian project procedures has recently been highlighted by enterprises who have faced a drastic rise in the prices of certain industrial raw materials and construction materials this year. Some argue the issue to the extent that certain projects co-financed by European Union funds could even come into question.

"It used to happen, for example, that the tender (in terms of deadline) states that the competent authority will notify the applicant of the results of the tender within four months, and 10-12 months will elapse before its conclusion," a consultant for EU projects explains.

When it comes to tenders for businesses (not counting, therefore, public bodies and social groups), the impression, he says, is that they are better off and more consistently organised for farmers than those for enterprises or, for example, those engaged in the fishing industry.

In the Competitiveness and Cohesion Operational Programme, which was the subject of scientific work of the IRMO analysis, the duration of selection procedures is, among other things, a consequence of the large volume of documentation required in most cases from the applicants.

In almost 60 percent of these calls, Croatian applicants quite unsurprisingly had to submit at least 11 different documents, which is quite a high number, according to the authors. Sometimes that figure is even higher, with between 16 and 20 documents needing to be submitted, and in seven percent of cases, even more paperwork than that was required in Croatia.

Nearly 40 percent of applicants stated that their entire application with all of the required attachments had more than 100 pages when complete. Among the more extensive were, for example, public calls related to the energy renovation of buildings, the promotion of sustainable development and the restoration of cultural heritage, as well as the modernisation and construction of student dormitories.

Approximately the same percentage of applications had less than 50 pages in total, which is still a lot.

There is also a large number of frequently asked questions about published invitations, which suggests that the tender documentation needed is often very unclear to applicants. In more than two thirds of the analysed calls, there were more than 100 questions asked. This shows that the Croatian project procedure is not only longer than it should be, but complex and as clear as mud. That also shouldn't come as much of a shock to most.

All this leads to changes and additions to the tender documentation, then the extension of application deadlines, and then the later contracting or later start of Croatian project implementation in relation to the original plans. In less than a quarter (23 percent) of cases, calls didn't undergo any changes, and nearly half (47 percent) underwent two or more changes, only adding to the confusion.

This also indicates that the preparation of tender documentation for competitive tenders for the state administration was a demanding task that often resulted in its amendments and the long duration of Croatian project selection procedures.

The competent ministries and state agencies received a lot of complaints due to the request for documentation that the applicants consider to be entirely necessary.

“Among such examples is the insistence on the original excerpt from the court register instead of the competent clerk simply checking it directly over the Internet. The same is true for the original BON2 certificate from the bank instead of the "downloaded" certificate from internet banking, as well as for the tax certificate confirming the absence of tax debt instead of direct verification,'' said one EU project expert.

Some changes in that direction are already being worked on, thankfully. Minister Tramisak recently said that reforms are being made so that the eFunds system is connected to all of Fina's public services, which will reduce administrative burdens. "People will just need to give their consent for documentation to be accessed online for certain items that they had to supply themselves so far,'' she assured.

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July the 10th, 2021 - Croatia has an enormous sum of money waiting to be utilised in various ways thanks to the European Union, but how will it do so? More importantly, what will be the effect on Croatian GDP?

As Poslovni Dnevnik writes, this plan which involves this EU cash should raise Croatian GDP growth by 1.5 percentage points in 2021 and by 2.5 to 2.9 percentage points in all years until 2026, including that final year, which is a huge boost following the coronavirus pandemic which left horrendous scars on the Croatian and European economies.

It should create 21,000 new jobs, too, and this is just an assessment of the direct impact of all the investments envisaged in the plan, not including the many reforms, which are an equally important part of the National Recovery and Resilience Plan. If Croatia manages to close the half of the gap with the European Union average with structural reforms, in the next 20 years, Croatian GDP would be as much as 15 percent higher than today.

These are just some of the figures that European Commission experts came up with when analysing and approving the much talked about Croatian NPOO. After the approval of the Croatian plan, Vecernji list found out about their thoughts and impressions from a high-ranking European official in Brussels.

It should not be forgotten, they added from the Belgian capital, that in addition to these 6.3 billion euros provided by the completely new fund from the mechanism for recovery and resilience, Croatia has about 9 billion euros at its disposal from the classic, structural EU funds.

''In front of you is a gigantic effort, you need to be able to manage and implement projects that will see all that money spent in a very short amount of time. You need to focus on that common challenge,'' said the official, who spoke only on the condition of anonymity.

After yesterday's green light from the European Commission, the EU Council has four weeks to adopt an implementing decision, which is a formal approval and allows for the payment of an advance of 13 percent of the value of the NPOO, which in the Croatian case totals about 819 million euros. In Brussels, everyone hopes that the Croatian plan will be approved by the Council before collective holidays begin during August.

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