ZAGREB, 9 June 2022 - Minister of Regional Development and European Union Funds Nataša Tramišak on Thursday awarded 15 contracts at the Split-Dalmatia County offices from the Island Development Programme for financing small capital infrastructure projects.

The Ministry implements the program once a year, and its goal is to enable island communities to implement small capital infrastructure projects in an attempt to systematically reduce regional development inequalities and differences in Croatia.

This year, a total of 56 projects were selected. Along with the 15 projects in Split-Dalmatia County another 41 projects were selected for Primorje-Gorski Kotar, Lika-Senj, Zadar, Šibenik-Knin, and Dubrovnik-Neretva counties.

"These funds are for investments in the small municipal infrastructure that makes everyday life easier. Islanders are having their settlements beautified and in some way the level of development raised, but we know that the needs to live on the islands are much bigger," said Tramišak.

She underscored that, along with state funds, a total of €150 million will be available from the European Regional Development Fund, because the Integrated Territorial Programme for Islands in the period from 2021 to 2027 is one of the programs planned for funding in the new European Union program period.

This year the Island Development Programme received a record number of applications, Tramišak underscored.

"There are more and more applications, both from local government units and businessmen, more than 500 this year. This is a sign to us that we need to further strengthen and increase these programs," she said.

The state budget for 2022 has HRK 17.6 million available for the Island Development Programme.

Among the selected projects in Split-Dalmatia County, the largest possible amount of HRK 450,000 was allocated for the completion of the Pučišća Stonemason's School on the island of Brač, the reconstruction and energy renovation of the Starine Business Zone on Vis island, a playground next to the kindergarten in Bol on Brač, and the second phase of construction and equipping the Borići Park in Nerežišće. Other projects will be financed with amounts of HRK 105,000 to 420,000.

For more, check out our politics section.

ZAGREB, 20 May 2022 - The European Commission has granted Croatia an extension of the deadline for using money from the European Union Solidarity Fund (EUSF) for the repair of the earthquake damage.

"Today, the Commission has decided to exceptionally grant Croatia the possibility to extend until 30 June 2023 the deadline for the use of the financial contribution from the EU Solidarity Fund to compensate for the damage of the earthquakes that severely hit the country in 2020 and 2021," the Commission announced on Friday.

Croatia has been allocated over €1 billion from the Solidarity Fund to remedy the damage caused by the earthquakes that struck Zagreb in March 2020 and Sisak-Moslavina County in late December 2020 and January 2021. The usual deadline for the use of funding is 18 months, and in this case, it expires in June this year.

Prime Minister Andrej Plenković met with Commission President Ursula von der Leyen in February this year, after which it was announced that the deadline would be exceptionally extended for a year. The Commission has never before extended the usual deadline.

"Croatia was hit twice by strong earthquakes, first in Zagreb and then in the city of Petrinja and the Sisak-Moslavina county. All of that happened during the first wave of the Covid pandemic, considerably hampering the recovery efforts. Ensuring that Croatia can fully benefit from the financial support from the EU Solidarity Fund for the reconstruction of the two regions is of utmost importance for the population and a sign of strong and concrete solidarity by the European Union," said Commissioner for Cohesion and Reforms, Elisa Ferreira.

For more, check out our politics section.

ZAGREB, 22 Nov 2021 - An agreement was signed in Dubrovnik on Monday for the procurement of 18 new buses for Dubrovnik's public transportation bus company, worth almost HRK 38.7 million (€5.16 million) of which 85% will be provided by the European Union.

The Libertas bus company will, thus, renew its fleet with two articulated low-floor buses, six mini low-floor buses, seven mini urban-suburban buses, and three midi suburban buses. As many old buses will be taken off the roads.

Mayor Mato Franković announced that traffic around the historical old town will soon be restricted to vehicles of local residents and public transport.

"I believe that visitors to the city will choose Libertas as the simplest and easiest form of transport to the historical old town," said Franković.

The bus company's director, Franko Mekišić, said citizens will directly feel the benefit of the procurement because the buses meet the newest standards and ecological norms.

"This will reduce the overall age of vehicles from 12 to 9 years. We currently have 110 vehicles, 80 of which are in use. We are intensively working on absorbing certain EU funds in the coming period to procure more buses," said Mekišić.

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July 9, 2021 - The REPLACE Project was presented at the JOINT SECAP workshop in Rijeka on June 23. There is no better way to end a year and a half-long Interreg project for Croatia, which was one more ecosystem-concerned cooperation between Italy and Croatia.

When it comes to energy efficiency in Croatia, there is no doubt anybody cares about it more than the scientific community working and associating with Energy Institute Hrvoje Požar (EIHP).

Not only is the EIHP building on its way to becoming the first nearly zero energy building in the whole of the country, but EIHP's expertise also plays a big role in REPLACE Project from Horizon Europe. As TCN previously covered, the project aims to make Primorje Gorski Kotar County energy-renewable territory, and the ongoing meetings about the project (in collaboration with the University of Rijeka) see slow but steady progress in those respects.

As EIHP reports on its website, June 23 saw REPLACE Project presented in the congress hall of Rijeka's Jadran Hotel as part of the final workshop of the JOINT SECAP project.

„On behalf of EIHP, Antonia Tomas Stanković presented REPLACE in the second half of the event. The goal is to support European energetic, climate, environmental, economic, and social goals by 2030 and 2050 by encouraging the gradual replacement of inefficient and outdated cooling and heating systems with new, energy-efficient systems based on renewable energy sources“, informed EIHP.

JOINT SECAP, part of Interreg Italy-Croatia strategic program (much like the CASCADE Project TCN previously wrote about) aims to improve the climate change monitoring and planning of adaptation measures tackling specific effects in the cooperation area.

„The project idea reflects the necessity to operate at a wider district level and better define strategies and actions for climate change adaptation, especially for those weather and climate changes and hydrogeological risks affecting coastal areas. The first phase is developed to build the common methodology for Joint Actions definition and implementation and to share the basic knowledge about issues concerning climate change adaptation strategies and energy efficiency measures. The second phase starts upon the analysis uploaded in the web platform, acting as a useful tool for the development of scenarios for the Joint Actions to be implemented in the Joint SECAP plans, those last constituting the main project deliverable“, explained JOINT SECAP on its website. The workshop in Rijeka was the conclusion of the project as JOINT SECAP ended on June 30 after it began on January 1, 2012, with a budget of € 2,094,857.

The workshop in Rijeka, writes the EIHP website, was organized by Primorje Gorski Kotar County Office for Regional Development Infrastructure and Project Management and by Kvarner Regional Energetic Agency. Representatives of local authorities of Primorsko-Goranska county that were enrolled in creating an Energetic and Climate Sustainable Development Action Plan. These local authorities include towns such as Opatija and Kastav and the districts of Čavle, Matulji, and Viškovo.

„Joint SECAP analyzed energy spending for the included towns and districts, their risks and vulnerability regarding climate change, yearly emissions of CO2 in sectors of building construction industry, public lighting, and traffic. Concrete measures with the goal of adjusting to the effects of climate change and CO2 emissions down to at least 55% by 2030 were suggested“, stated EIHP.

With measures identified, the race with time begins as these measures should be in place as fast as possible to tackle one of the biggest challenges humanity is facing, and Croatia isn't able to be isolated from the threat.

Learn more about Rijeka on our TC page.

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

ZAGREB, 23 June, 2021 - Despite the considerable setback dealt by the pandemic, Croatia has a rare opportunity in the next five years to restore its economy to health and to ramp up the public investments necessary for appreciably higher growth rates with the help of EU funds, an IMF mission says in a Concluding Statement.

"Following a painful contraction of 8 percent in 2020, the economy looks set for growth between 5 and 6 percent in 2021 driven by a rebound in the services sector and investment - provided the pandemic does not provide further unwelcome surprises," the mission says the statement published on Wednesday after visiting Croatia as part of regular consultations with member states.

"With sufficient luck regarding tourism outcomes, and a successful vaccination drive within the next months, growth could even exceed 6 percent this year. Assuming the pandemic fades by the end of this year, growth could remain high over the next few years, if the country makes full and timely use of the potentially sizable forthcoming inflow of EU funds," according to the statement.

"Since the first quarter, the recovery has picked up noticeably with areas like construction and manufacturing already reaching activity levels higher than in 2019. Overall, the number of registered unemployed persons has fallen by nearly 13 percent since a year ago. However, tourism and directly related sectors are yet to fully recover. This process is likely to take another year or two."

Swift measures by the authorities

"Between the pandemic and two large earthquakes, Croatia has been severely tested, and the country’s resilience has come through. The economic contraction in 2020 - painful as it has been -was not as severe as those experienced by many other economies with a strong tourism component. This is mainly due to the swift measures enacted by the authorities," the IMF staff said.

"Support measures must remain in place until the health of the population and the economy have been fully restored. As conditions improve, support measures need to rotate toward preparing the workforce for the post-pandemic world, and facilitating balance sheet repair of viable businesses. Thereafter, the challenge of once again reducing deficits and the public debt whilst shifting growth into a new high gear must be taken on. The generous funding from the EU represents a historic opportunity, to help meet these challenges successfully - an opportunity that must be fully utilized, in a timely fashion," the IMF mission said.

Not the right time to further cut taxes

Noting the government's support measures, the mission said, "Just as these support measures were essential during the worst of the crisis, they must now be better targeted to lagging sectors of the economy - and they must remain in place till the economy has more fully recovered."

"It is paramount that a vaccination drive be as successful and widespread as possible, that extra healthcare costs are fully met and arrears in the healthcare system are reduced to the maximum possible extent," according to the statement.

"Complementing the use of funds such as the European Social Fund, fiscal resources saved this year due to improving conditions can also be usefully redeployed to train more workers in sectors like greening and digitalization."

"In sum, in the view of IMF staff, the most important fiscal goal in 2021 is to focus on spending available resources wisely to restore the economy to health. If this is successfully accomplished this year, it will more firmly ground the efforts to reduce the deficit and debt over the next few years," said staff said in the Concluding Statement.

"Regarding revenues, the authorities need to conserve all available resources to meet any unexpected expenditures into 2022, and well beyond. This is one clear lesson from this completely unforeseen shock the world has suffered. We hold that this is not the right time for any further tax cuts or weakening of the tax base. Current conditions are still far too fragile for the country to afford them," they said. 

Recovery and Resilience Fund provides unique opportunity for economic development

They said that there were few doubts that a post-pandemic "will be more digitalized in the most basic aspects of our lives, and that it should be greener. In these two areas, Croatia has great strides to take, from which there will be a sizable return on investment, for decades to come."

The IMF reiterated that "our most important recommendation was to raise public investment, for the sake of future growth. Now, that conviction has only deepened, as it is important to acknowledge a singular aspect in which Croatia is actually better off than it was before the pandemic."

That is "the generous allocation of EU Funds, including from the Recovery and Resilience Fund (RRF). The RRF resources amount to 10.6 percent of GDP in grants to be utilized by 2026."

"These funds reflect a truly unique opportunity along the path of economic development, which many countries in the world are not fortunate enough to have. It is important for all stakeholders in Croatia to fully understand the significance of this opportunity. These funds are available, but they need to be absorbed efficiently, and in a timely manner. They must also be accompanied by needed reforms," the IMF said.

"Thanks to the influx of these EU funds beginning towards the end of this year, Croatia can significantly upgrade its public capital stock, decarbonize its economy, catch up with digitalization, and improve its maritime and rail transport systems. If the projected investments go according to plan, we currently assess that the funds from the RRF alone could add as much as 2.9 percentage points to real GDP over the next twenty years."

Opportunity to reduce income gap in relation to EU

"When the effects of the planned reforms, as well as the other EU structural funds are put together, Croatia now has its best chance since independence to significantly narrow the current 35% gap in per capita income with respect to the EU average," the mission said.

It added that "the prospect of living in a vibrant society with prosperity rapidly converging to EU levels could cause the young to fundamentally re-evaluate their future, thereby further stemming the tide of outward migration. That, in turn, would have the positive effect of reducing risks to the sustainability of the healthcare and pensions systems. It is very much possible now, and unlike ever before, to start a virtuous cycle - and to definitively escape past vicious circles."

The authorities have requested a Public Investment Management Assessment from the IMF, to take place in August 2021, the statement noted. "This assessment will help prepare an action plan to help make sure investment spending is effective, is sensitive to climate change related considerations and supports sustainable long-term growth."

The authorities’ National Recovery and Resilience Plan "has laid out major complementary reform commitments across five components: green and digital economy, public administration and judiciary, education, science and research, labor market and social protection, and healthcare. These are essential for the flexibility Croatia needs to operate its economy smoothly, once inside the eurozone."

Reforms needed for stronger public finance

Within the reform areas where the strength of public finances is the focus, IMF staff re-emphasizes the importance of support, from all stakeholders, for civil service and administrative reforms, "including a modernization of the public salary system, as well as improving the territorial organization of sub-national governments."

Support is also called for ending "stop-gap measures to take care of healthcare arrears, through an overhaul of its cost structure" and "exploring a more sustainable revenue base, to preserve healthcare quality standards."

The IMF also recommends the development and implementation of a full-fledged strategy for state-owned enterprises (SOEs), "including the separation of core from non-core businesses, and a strengthened oversight system for the former to ensure that they contribute their fair share to the budget by remaining financially durable after their public service obligations are met. The authorities’ commitments to sell some non-core SOEs over the next few years is a promising start." 

Also recommended is ensuring the long-term sustainability of the pension system, given population aging.

In addition to these areas, constantly improving the competitiveness of the Croatian economy through active dialogue with the private sector, remains essential.

"For the forthcoming increase in public investment to have maximum effect on the economy’s growth rate, it must be complemented by increases in private investment, as well. Reforms to the framework of debt restructuring, insolvency, and efforts to further improve predictability and efficiency in legal procedures remain central to unlocking more resources from investors, as it allows them to invest with greater confidence."

Banking system liquid and sufficiently capitalized

"Monetary policy remains highly expansionary, within the exchange rate anchor in place since 1993. This stance is appropriate given the need to nurse the economy fully back to health," the IMF staff said.

The recent pick-up in inflation is more likely than not to be transitory in nature, but should inflationary pressures prove more persistent than in the euro area, the central bank "may consider reducing excess liquidity in the banking system, while maintaining exchange rate stability."

"The banking system has remained liquid and is on average well capitalized," the mission said, adding that there was more than enough money to meet the demand for corporate loans.

Housing lending remains strong, while uninsured household cash loans have decreased, which the IMF said was positive.

Although the ratio of non-performing loans to total loans has remained stable, the so-called stage II loans, a forward-looking indicator of future asset quality problems, has risen - particularly for non-financial corporations. This development warrants continued close monitoring."

"The pandemic has not affected the upward trend in house prices in Zagreb and coastal areas. To the extent that housing purchases are not driven by excessive household borrowing, they do not constitute an immediate financial stability risk," the IMF said.

However, this also requires continued monitoring by the central bank, If circumstances require it, the central bank "might wish to consider putting in place more formal macro-prudential measures (than the current implicit debt-service-to-income ratio included in the Foreclosure Act)."

"Despite the considerable setback dealt by the pandemic, Croatia has a rare opportunity, over the next five years, to restore its people and economy to health. It can ramp up the public investments necessary for appreciably higher growth rates, with the help of EU funds. Such opportunities should not be taken for granted. The onus of efforts is not exclusively on the authorities. All stakeholders in society must offer them the support for vital reforms, while doing their parts to re-energize private investment, and innovation. Adopting the euro will help remove some existing economic frictions by removing exchange rate risk. Yet, reaping the full benefits of the currency union requires strong focus and preparation. A brighter future is very much within reach. The time to act is now," according to the Concluding Statement.

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

June 21st, 2021 - President Zoran Milanović visited the town of Popovača on Monday and attended a special City Assembly meeting on the occasion of the town's day, where he welcomed efforts by local authorities to absorb EU grants to the maximum in order to realize essential projects for economic and demographic revival.

We have to utilize the benefits of membership in the European Union, he underscored.

"That is why for me, the only criterion for any city, municipality, and the state is to absorb the last euro possible. But for each one that we didn't, I want to see who was responsible and not just as the president of this country, but as a citizen," said Milanović.

We owe that to ourselves. Otherwise, we will once again be in some large conglomeration where we have no influence, he underscored.

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

May 26, 2021 - With Energy Institute Hrvoje Požar (EIHP) being the lead partner, the REPLACE Project from Horizon Europe steadily continues the progress of renewable energy for the Kvarner region.

Earlier in January, TCN wrote about Croatian energy development, whose goal is to be based on clean technologies. And that it's not all empty talk, as shown by the third meeting of a local workgroup enrolled in the REPLACE Project. As Energy Institute Hrvoje Požar (EIHP) reports on its website, the REPLACE Project has a goal of supporting European energetic, climate, environmental, economic, and social goals with the deadline until 2030 and 2050.

As part of the OBZOR 2020 (Horizon Europe) EU program for research and innovations in the 2014-2020 time frame, the REPLACE Project receives EU funding. Twelve partners from nine countries participate in the project, and EIHP is in charge of the project activities in Primorska-Goranska county. In support of European goals, the plan of REPLACE Project is to gradually switch the current ineffective and outdated heating and cooling systems with new efficient systems which rely on renewable energy.

The meeting held at the Faculty of Economics at the University of Rijeka saw Dražen Balić, Antonia Tomas Stanković, and Lea Leopoldović from EIHP hold lectures presenting results of the first period of the project, but also the plans for future activities. The accent was put on implementing campaigns and collective actions supported by the members of the local workgroup. Energetic poverty, gender aspects, and „lock-in effect“ (an economic practice, where a company makes it extremely hard for their customers to leave them, even if the customer wants to) are the obstacles the project runners are aware of and were explained in greater detail. Another thing that stood out in the presentation was the presentation „Technology of Blue Energy in Croatia“, which presented modern technologies used in heating and cooling in coastal areas, and applicable to the Primorska -Goranska county.

Key institutions in the regions such as REA Kvarner (regional energy agency), Energo Rijeka (gas and heat energy provider), representatives of the Primorska-Goranska county, OIE Hrvatska (The economic-interest association The Renewable Energy Sources of Croatia - RES), and Rijeka Consumer Centre were present at the meeting, showing that the motivation to bring energy efficiency in Primorska-Goranska County is in its full strength. Both on corporal, political, and expert levels. 

Learn more about Rijeka on our TC page.

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

May 18, 2021 - The Rovinj Sea Research Centre turns 130 in 2021. It is the place in Croatia for oceanographic research and all things science related to the preservation of the sea and maritime life.

Established back in 1891 as Berlin's Aquarium Zoological Station, the research Institute is known today as the Rovinj Sea Research Centre (CIM), and last week it celebrated 130 years of work. An affiliate of the Ruđer Bošković Science Institute (IRB), that institute recently reported that CIM currently has 54 employees working in four laboratories, and the centre is heavily involved in numerous impressive scientific projects.

''This includes five projects of the Croatian Science Foundation (HrZZ), worth 5,855 635 HRK, three projects financed within the INTERREG cross border programme (worth 1,326 000 euros), three projects with European structural and investment funds (7,189 531 HRK), and two projects financed within the EU programme for research and innovations, OBZOR 2020, valued at 179,360 euros,“ says the IRB official website.

The section of the IRB page dedicated to CIM adds that the centre offers a multidisciplinary take on the research of the sea, offering both basic and applicable oceanographic research. This includes six areas of interest: processes and dynamics in the food chain, examining the dynamics of water masses, ecology (species and the interrelations of species in both clean and in polluted waters), sea organism research (ecological, physiological, and genetic features of organisms, and a pollution effects study), the monitoring of pollution and sea quality, and finally, the monitoring of eutrophication (a process in which the environment becomes enriched with nutrients which can trigger the development of algae and cause an imbalance in the ecosystem).

Set in the beautiful town of Rovinj on the Istrian peninsula because of the clear waters of the Adriatic sea, CIM is on a mission to preserve marine life and its biodiversity.

CIM truly has a rich tradition, having conducted international systematic research and monitoring of the marine ecosystem of the Northern Adriatic for over 30 years. ''This approach became a model for the regional organisation of the European systematic monitoring of the coastal sea,'' says IRB.

IRB adds that in this long tradition, the Croatian science programme of monitoring the Northern Adriatic played a huge role. Having begun fifty years ago, it developed into the Jadran Project, making Croatia one of the first countries in all of Europe to have developed a systematic approach to the monitoring of the sea.

''Additional confirmation of the tradition and scientific quality of CIM can also be seen in the recent joining of CIM to JERICO – the Joint European Research Infrastructure network for Coastal Observatory, making CIM a partner of some of the most famous European Institutes“, concluded the IRB's explanation.

Learn more about Beaches in Croatia on our TC page.

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May 13, 2021 - With Croatian scientists' reputation on the rise on the world stage, dr. Vernessa Smolčić is now the Croatian European Research Council (ERC) Fund Receiver. 

Croatian scientists continue to impact the European science scene. As the Faculty of Science (PMF) at the University of Zagreb reports on its website, their scientist and professor, dr. Vernesa Smolčić is one of the 10,000 receivers of non-returnable funds by the European Research Council (ERC). As PMF states, the excellence of research work is the only criteria to get these funds.

„Scientists compete in a very strong international competition in which the European Commission from the total number of applications picks up only 8-15% of the best. Projects founded by the ERC are the best researches in all of Europe, and working on ERC projects increase international recognition of the research, and cooperation with the elite global universities“, says PMF.

An online ceremony saw representatives of ERC welcoming all 10,000 receivers with particularly pointing out the top 15 who contributed to the transformation of science and research.

One of them was, you guessed it, dr. Vernessa Smolčić.

„Vernesa Smolčić studied physics at the University of Zagreb, where she is now a full professor at the Department of Physics in the Faculty of Science. She obtained her Ph.D. in 2007 from the University of Heidelberg, Germany, followed by a postdoctoral position at Caltech in California, USA. In 2009, she obtained an independent ESO ALMA COFUND Fellowship from the European Southern Observatory. In 2013, she won one of the first ERC Starting Grants in Croatia“, says the ERC website.

screenshot / Astroučionica

The website also offers more details on how Smolčić (and other scientists, for that matter) made an incredible contribution in expanding human knowledge.

As Smolčić explained for the ERC website, there were more than a few unknowns in the astrophysics field due, primarily to instrumental limitations at the time. But, in 2014, „Smolčić’s team was one of the first to use new and upgraded radio telescopes in Chile, USA, Australia, and India. These telescopes offered a higher level of accuracy for tracing star formations and detecting galaxies, stretching back to when the universe was very young“, writes ERC.

„While the observation phase was very time consuming, Smolčić was immediately taken aback by the extent of the data. She was not only probing new areas of Space, but she was observing radio wavelengths that no other scientist had been able to see through a telescope lens in such detail, or for so many galaxies. Three years down the line, her team had over 850 hours of data. They analyzed and assembled datasets (radio sky mosaics, data collections) on various types of galaxies, their sources, and physical properties. These datasets were made publicly available to the broader astronomy community, to be used by other scientists to explore more of the universe’s unknowns“, concludes ERC.

„ERC funding really allowed me to conduct my research at the highest competitive levels“, said Smolčić. And you can learn more about her work in this interesting podcast.

European Research Council was established in 2007. As they say themselves, their mission is to encourage the highest quality research in Europe through competitive funding and to support investigator-driven frontier research across all fields, based on scientific excellence.

„The ERC complements other funding activities in Europe such as those of the national research funding agencies, and is a flagship component of Horizon Europe, the European Union's Research Framework Programme for 2021 to 2027“, they said.

Learn more about Croatian inventions & discoveries: from Tesla to Rimac on our TC page.

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

ZAGREB, 4 May, 2021 - Although planned for the beginning of this year, the new electronic toll collection system in Croatia will be put into operation as late as the end of 2025, the Večernji List newspaper wrote on Tuesday.

Once installed on the motorways managed by the HAC and Bina Istra companies, the toll will be charged automatically by an upgraded version of the electronic toll collection and number plate recognition system without vehicles having to stop at a toll booth.

To get most of the money needed for the new system, the government has decided to apply for EU funding, including this project in the national recovery and resilience programme 2021-2026. The project has been presented as being part of digitalisation and development of a competitive, sustainable and efficient transport and traffic system.

The value of the project is estimated at HRK 730 million (€96.9m), or HRK 912.6 million (€121.13m) including VAT.

Until the new system is put in place, HAC plans to switch to a cashless-only payment service at 18 of its 76 toll booths where the toll will be charged by the existing electronic toll system or paid by bank cards. These toll points normally see very little traffic, especially in wintertime, the newspaper said.

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