March the 3rd, 2023 - One thing I noticed when Croatia first joined the Eurozone, was that when my salary landed in my current account, it made me look twice. Gone are the days of kuna-dominated sums expressed in the thousands, and it's causing quite the psychological phenomenon. The illusion of money is affecting as many as two thirds of Croatian employees, who now feel ''poorer''.

As Poslovni Dnevnik writes, challenges with getting used to the euro as this country's new currency are partly due to a psychological phenomenon called the ''money illusion'', which isn't uncommon when changing currencies.

This year, at the moment when the clock struck midnight on the night of December the 31st, 2022, to January the 1st, 2023, Croatia officially got a new national currency. The kuna, which has served us more or less successfully for the past thirty years, gave way to the euro, and since then we've all been receiving our salaries, bonuses and other monetary items expressed in euros. Although essentially not much has changed - in most cases Croatian employees continued to receive the same amounts in terms of value as before, just expressed in a different currency - there was some dissatisfaction.

The above was confirmed by a survey conducted by the MojPosao/MyJob portal, in which almost 900 respondents shared their thoughts, according to which as many as two-thirds of Croatian employees feel poorer since receiving their salaries expressed in euros.

The psychological phenomenon of money illusion

Challenges with getting used to the euro are partly due to a psychological phenomenon called the money illusion, which is not uncommon when countries change their official currencies. As psychologists explain, this illusion occurs because numbers are more important to people than the value of money itself, and this results in a sense of dissatisfaction when nominally smaller amounts start arriving in our bank accounts than before. This is exactly what happened with the switch to the euro.

Challenges with getting used to the euro are partly due to a psychological phenomenon called the money illusion, which is not uncommon when changing currencies.

Namely, almost two-thirds of Croatian employees (63% of them) state that they feel poorer since receiving their salary in euros instead of kuna. Now, they explain, they receive their salary in "hundreds of euros, while it used to be thousands of kuna, which has a negative effect on their satisfaction". Additionally, as a result of inflation, the cost of living has increased, so the salary itself, apart from the nominal amount, has also fallen in real terms compared to before, say the interviewees.

"At first it seems smaller, but it's the same"

On the other hand, a third of Croatian employees (32%) point out that they haven't felt the effects of the money illusion for themselves and feel the same as before the currency change. They state that they were afraid that they would be made to feel that they had suddenly become poorer, but that in the end it was a peaceful transition.

Although in the minority, some people (5%) feel richer since January the 1st than before. According to their thinking, the euro is a stronger currency than the kuna, and thus money expressed in euros has a greater value.

For more, check out our news section.

February the 20th, 2023 - Around 4,000 Croatian euro coins are producted in one single minute by the responsible machines, an impressive feat indeed.

As Poslovni Dnevnik writes, owing to the introduction of the euro at the beginning of this year, the Croatian Mint has had to produce a total of 650 million coins, about two-thirds of that work was carried out last year, and the remaining part - about 200 million Croatian euro coins in total - should be completed this year.

In the modernly equipped mint, which is owned by the Croatian National Bank (CNB/HNB), highly sought-after numismatic gold and silver Croatian euro coins are produced, and preparations are also being made for the possible production of euro coins for other member states of the European Union (EU) as well.

About four thousand Croatian euro coins come out of the machines in one single minute. In just over five months last year, the Croatian mint minted as many as 405 million coins. Work was carried out in three shifts, 24 hours a day, Roman Husta, director of production at the Croatian Mint, explained during his appearance on Dnevnik HTV.

"This year, we have basically the same amount of forging per minute, about 4 to 4.5 thousand coins is the average, but considering the reduced amount of forging tiles we've been receiving from our suppliers, we've been working at a slightly reduced pace," Husta added.

The plan is to mint another 200 million Croatian euro coins

This year, the plans are to mint around 200 million more Croatian euro coins in order to reach the planned amount needed for the complete exchange of the former currency (the Croatian kuna) into euros. However, he noted, it's currently difficult to estimate what the regular need for these euro coins will be over the coming years.

Estimates are currently being made of what the needs will be for next year. "We're entering a large market as a small country. Each country has different experiences. We hope that there will be some kind of need that will make it possible to finance the continued life of this factory", said Damir Bolta, President of the Management Board of the Croatian Mint.

In addition to money for circulation, numismatic coins, silver coins and gold coins are also produced in the mint on modern machines and tools. The latest Hum gold coin has attracted special attention from the public. Much like the Istrian destination after which it is named (the smallest city in the world) the coin is the smallest coin in the world, measuring even two millimetres in diameter.

"It was a challenge for us to show, in addition to making euro coins, that we're capable of doing something more in other areas as well. So the idea was, why don't we make the smallest coin, and so it was made. A happy solution for the motif is Hum in Istria, which has the status of the smallest city in the world," said Bolta.

The Croatian Mint has entered the narrow European circle of only seventeen accredited institutions for the production of euro coins, so it's possible that in the future it will apply for tenders to create coins announced by other member states of the European Union,'' it was explained on HTV.

For more, make sure to check out our dedicated news section.

January the 26th, 2023 - Alright, this title is slightly misleading because we've needed Croatian pension and wage growth for a very long time now, but after becoming a full Eurozone member state, it's high time that we saw the numbers in our bank accounts go up, even just a little bit.

As Poslovni Dnevnik writes, recently, there have been signs of inflation finally stabilising after a certain drop in electricity and gas prices was duly noted, but despite that, in general prices are still high, and Croatian living standards are falling, which is why Croatian pension and wage increases are now more necessary than ever.

These are just some of the conclusions reached as part of the recently held "Eurostands - Perspectives and challenges" in the City of Zagreb. The head of the Independent Croatian Trade Unions, Kresimir Sever, reiterated that subjective inflation is still being very much felt by most of the country's households and is significantly higher than official statistics. He said because of that, Croatian pension and wage growth is necessary. On the other hand, the chief economist of the Croatian Association of Employers (HUP), Hrvoje Stojic, said that HUP members have seen their employee salaries rase above the national inflation level.

Stojic also noted that the wider Eurozone's economy will experience a certain strong slowdown throughout 2023, during which there will be a "cooling" of aggregate demand, but he added that inflation could be up to two percentage points lower compared to the estimates provided back at the end of 2022.

He believes that due to the unusually mild winter we've all been experiencing, the whole of Europe could avoid dipping into the expected recession in 2023, but also that there is an option to simply "postpone" it to the second half of this year, or even until next year. Professor Marijana Ivanov of the Faculty of Economics warned that inflation reduces the real value of everything we own, and that we need to keep paying attention to the trends.

However, it is positive that there are still no risks of unemployment growth in the Croatian economy, but the general standard of living in slipping.

''Croatian living standards are decreasing, but somehow we're managing despite all of the current challenges," she concluded.

For more, make sure to check out our dedicated news section.

January the 26th, 2023 - The Croatian State Inspectorate has been busy over the last couple of weeks after many stores and services/goods providers unjustifiably raised their prices following the introduction of the euro as the country's official currency. Their findings have been astonishing, and many fines have been issued.

Poslovni Dnevnik brings us the findings of the Croatian State Inspectorate without any changes, and we've translated it into English:

Following the conclusion of the government on the implementation of the principle of the prohibition of unjustified price increases, the Croatian State Inspectorate is continuing to carry out increased inspections aimed at protecting consumer rights.

From January the 5th, 2023, when the Croatian Government adopted the aforementioned conclusion, until yesterday (January the 25th, 2023), the market and tourism inspection of the Croatian State Inspectorate carried out a total of 1,458 inspections, in which, (more specifically in 305 such inspection so far) unjustified price increases after December the 31st, 2022 were determined. In an additional 211 inspections which have been carried out, the process of the determination of any unjustified price hikes is now being determined.

Excluding inspections in which fact-finding remains an ongoing process, unjustified price increases after December the 31st, 2022 were found in 24.5% of inspections. 70% of the supervised entities where a price increase was determined during the inspection, i.e. immediately before the end of the inspection, returned their retail prices to the amounts they were at back on December the 31st, 2022.

"These figures clearly show us that the inspections being carried out by the Croatian State Inspectorate and the measures adopted by the government in order to protect consumer rights have borne fruit," said Andrija Mikulic, Chief State Inspector, when commenting on the progress and preliminary results of the inspections so far.

Out of the total number of inspections performed (1,458), 382 inspections were performed on service providers, 328 inspections were carried out in retail trade, 108 inspections were carried out across the sector of retail bakery products, and 640 inspections were carried out in the catering and hospitality industry.

According to the preliminary data we have access to at this moment in time, the average price increase for supervised services has shot up to a staggering 30%, while the price increase in retail bakery products is, on average, a less but still wholly unwelcome 15%.

A comparative analysis of the "new", higher prices of certain catering and hospitality services and the "old", lower prices found an increase in the prices of certain catering services of up to 10%, and exceptionally in some inspections which have been concluded over this past week, an increase in the prices of certain catering services up to a disgusting 29%.

Regarding prices in retail trade, an average unjustified increase of up to 17% for certain controlled products after December the 31st, 2022, has been observed. For example, unjustified increases in the prices of milk, chicken meat, and beer, were all determined.

It's important to emphasise that a significant number of inspections carried out in retail trade in retail chains have also been completed. In nineteen retail chains, the market inspection carried out 93 inspections. The inspections were carried out ex officio, as planned inspections and on the basis of peoples' reports.

So far, at four retail chains, an unjustified increase in retail prices for ten products has been determined; cat food (29.18%), 800g cocoa drinks (18.91 %), cured meat product sirloins (20.52%), pickles (9%), dog food (38%), cooking chocolate ( 13%), liquid yogurt (24.47%), butter (19.87%) and biscuits (41.24 %). Please note that fact-finding is still underway in several retail chains.

Fines are being imposed on all business entities that unjustifiably increased their prices after December the 31st, 2022, that is, from January the 1st, 2023 until the day of the inspection. As of January the 25th, 2023, a total of 272 fines were issued as part of the completed inspections, in the total amount of 457,357.96 euros (3,445,963.55 kuna).

Inspections being carried out by the Croatian State Inspectorate are set to continue, with each inspection being part of its jurisdiction. This state body will continue to carry out coordinated and continuous inspections with the aim of consumer protection firmly in mind.

For more, check out our news section.

January the 24th, 2023 - Despite ongoing inflationary pressures, Valdis Dombrovskis, a Latvian politician who has served as the European Commissioner for Trade since 2020, has said Croatian Eurozone entry has occurred at the right time.

As Ana Blaskovic/Poslovni Dnevnik writes, the annual inflation rate in the Republic of Croatia more than likely peaked back in December 2022 and could continue to fall due to lower food and energy prices, Croatian National Bank (CNB) Governor Boris Vujcic said on Monday.

"Here in Croatia, the inflation trend is very similar to that in the rest of the Eurozone, but it is higher, which is in line with Eastern European countries where GDP per capita is lower, so food and energy prices have a greater effect on people," Vujcic told reporters at a seminar ahead of a government and CNB conference called ''Croatia – The 20th member state of the Eurozone".

When epeaking about Croatian Eurozone entry, Vujcic said that "we should wait for official data, but we should also realise that the prices of energy and food in the first two weeks of January are lower than before on an annual basis,'' however, he did make sure to note that the CNB doesn't actually monitor the prices of (utility) services for small businesses.

When asked whether, now that inflation is slowing down, the European Central Bank (ECB) will continue to raise interest rates with the same intensity, from 50 basis points, Vujcic said that he wouldn't like to speculate on it.

"Warmer weather than usual across Europe this winter has reduced the risk of recession in the European Union and here in the Eurozone, two months ago the main risk was possible reductions in energy sources. Now it's certain that we aren't going to have a recession, although there may be some issues which are shallow and short-lived in some countries,'' stated the governor, noting that in a calmer environment it is easier to raise interest rates.

"Although the headline inflation rate has fallen, core inflation across the Eurozone has risen. Current forecasts call for a further increase in interest rates," he said. Valdis Dombrovskis also pointed out that Croatian Eurozone entry happened at the right time regardless of inflation.

He explained that the economic benefits of Croatian Eurozone entry enable the country to borrow more cheaply, it brings about price transparency, which is especially important in tourist-oriented countries like Croatia. With the kuna tied to the euro, monetary policy in Croatia followed the monetary policy of the ECB, he believes, but did not benefit from formal membership in the Eurozone back when the kuna was legal tender.

"Because of high inflation, things are a bit more difficult at this moment in time, but the government is working on measures to suppress those issues. From a historical perspective, inflation was low when Latvia joined the Eurozone, and even then the opposition was against it precisely because of low inflation. I think Croatia's timing was good regardless," he assured. Referring to inflation across the Eurozone, he pointed out that inflation has spread throughout the Eurozone's economy and it will take time for it to calm down despite the drop in energy prices.

"The euro is a young but extremely well-established currency, the second strongest reserve global currency. Its use is expanding and that is going to continue, the euro will play a role in the development of the European Union's economy and that of all of Europe," concluded Dombrovskis.

The poll conducted by the EC in Croatia after the changeover to the euro shows that the vast majority of Croatia's residents believe that the changeover went smoothly and efficiently. As many as 88 percent believe that they are well informed about the euro, 61 percent that the transition was smooth and efficient, 81 percent had no problems when exchanging their kuna banknotes and coins into euros or withdrawing cash from banks during the first week of the use of the new currency.

For more, make sure to check out our dedicated news section.

January the 18th, 2023 - Despite all of the panic and in many cases confusion surrounding Croatian euro introduction, ongoing inflation and price hikes, prices for an array of products actually fell back in December last year.

As Jadranka Dozan/Poslovni Dnevnik writes, quite on the contrary to public perception and the current clamor and naming and shaming of the culprits for price increases in the context of Croatian euro introduction, December 2022 ended with a monthly drop in consumer prices.

According to the National Bureau of Statistics (CBS), at the end of the 2022, prices were on average 0.3% lower compared to what they were in November, which brought the annual inflation rate down from 13.5% in November to 13.1% at the end of December. Looking at the annual average, consumer prices last year were 10.8% higher than they were just one year before.

Last month's decline is, admittedly, primarily the result of lower transportation costs, i.e. the price reduction of petroleum products during December. In addition, seasonal reductions in clothing and footwear, as well as somewhat lower housing and utility costs (in the part influenced by fuel prices) also contributed to the monthly decline to a slightly lesser extent.

In short, as the transportation category accounts for about 15 percent of expenses within the consumer basket, their drop by 4% "overpowered" the price increases in the food and non-alcoholic beverages group. The share of this group in the expenses of the average household budget is significantly higher (26%), but the prices of food and beverages on a monthly level, according to the CBS, increased by a significantly smaller 1.2%. That's what the average more or less looks like, but some food products went up in terms of cost significantly more in December.

For example, when compared to November, the price of butter in Croatia rose by as much as 11% (22.8% on an annual basis), eggs by 9.2% (compared to December the year before, they were 64.5% more expensive), and more than the average monthly increase in food prices also increased the prices of bread, pork, fish, milk and dairy products, fish, olive oil, and so on.

Overall, the annual inflation rate for food and non-alcoholic beverages stood at 19% at the end of the year. If only food is considered here, then annual growth has only been slightly moderated, from 19.7 to a barelt different 19.6%.

However, in addition to the aforementioned prices of eggs and butter, a number of foodstuffs on an annual level record price increases of more than 20 percent; from bread, cheese and sugar, which at the end of 2022 compared to the end of 2021, increased in price by more than 30% (bread by almost 33%, cheeses by 34%), to, for example, frozen vegetables which carried almost 45% higher prices on average.

Although last month's prices of oil derivatives indicated that it would be a significant inflation shock absorber, some analysts will say that they still expected inflation to remain at around 13.5% at the end of December.

For the Croatian Employers' Association (HUP), the latest data from the CBS isn't remotely unexpected. They also pointed out that the annual rate could culminate in January, after which it should fall once again over the coming months. The rise in service prices basically reflects the incomplete recovery of aggregate demand after the coronavirus pandemic finally subsided, as well as the labour shortage and the delayed adjustment to last year's input price increases - these are just some of the main points of the comments of HUP and their chief economist Hrvoje Stojic.

In addition to all of the above, they are reminiscent of signals related to core inflation. If volatile food and energy prices are excluded from all of this, the basic measure of inflation simultaneously shows its annual growth at 9.7%, from 8.9% back in November.

"This indicates that inflation will remain at high single-digit levels for the foreseeable future," they stated from HUP. In terms of the twelve-month average, after last year's 10.8 percent, according to their forecasts, this would mean a drop to the still relatively high 7.5 percent inflation this year. The expectation of lower monthly inflation dynamics is explained by the expected decline in aggregate demand, i.e. the technical recession over the first half of the year, as well as the stabilisation of energy prices, the normalisation of supply chains and a certain decline in the prices of food raw materials.

Energy prices, which are currently in decline thanks to an extremely mild winter across all of Europe, are still being calculated with a relatively high uncertainty factor.

"Despite government subsidies, electricity prices are still about four times higher than pre-2021 levels, which is symptomatic of a long-term energy crisis. This summer, a new race between EU member states to fill gas storage will begin, so the European Commission (EU) needs to provide new mechanisms for stabilising those energy prices,'' they pointed out from HUP. If the proposed price limit had been in effect last summer, the EU probably wouldn't have provided sufficient quantities of gas even to those who were perfectly able pay at the prices above the typical price limit.

The simultaneous fall in inflation across the Eurozone during the first half of the year could encourage speculation about the end of the cycle of growth of the ECB's reference interest rates. However, HUP is remaining strong in its belief that core inflation across the Eurozone, as well as right here in Croatia, will remain well above the ECB's inflation target of around 2% in the foreseeable future.

"Furthermore, fiscal expansion continues and wage growth accelerates, which may also affect price expectations. For this reason, a further increase in the deposit rate to 3.25-3.50 percent by the summer of 2023 is to be expected in the ongoing and seemingly tireless fight against inflation. The rise in interest rates along with the simultaneous planned reduction of the ECB's balance sheet at a rate of 15 billion euros per month from March onwards will also contribute to the deterioration of financing conditions in a situation where financing needs are growing strongly in many Eurozone countries, including in this country, where Croatian euro banknotes and coins are now the new currency.

If we stick to the latest figures from the CBS on inflation across the country in the month preceding Croatian euro introduction and the confusion surrounding conversion and ongoing inflation, it remains to be noted that in 2022, in addition to food and non-alcoholic beverages, above-average price growth was also recorded in the categories of restaurants and hotels (17.1%), furniture and household equipment (16.1%) and housing and related utilities (16%).

Due to the market movement of oil prices, and due to the Croatian Government's various economic measures, the transportation sector ended in 2022 with an annual growth of only 8.4 percent. If only fuels are considered within that category, where annual inflation stood at a whopping 21.5 percent in January last year, 2022 ended with a price increase of only 6.7 percent.

For more on Croatian euro introduction and inflation, make sure to check out our news section.

January the 14th, 2023 - The price increases we've witnessed up and down the country ever since the euro was introduced on the first day of this year have been rather astonishing. While most people expected prices to go up a little bit, what has been happening is ''pure profiteering'' as Plenkovic himself described it. The government has stepped in with some measures, and it seems Croatian stores are being put well and truly under the radar of the authorities.

Economy Minister Davor Filipovic has been very vocal about the measures set to prevent Croatian stories from taking advantage of not only inflation but of the introduction of the new currency, and it appears that the idea of Croatian stores having to send their price lists to the government every two weeks for the foreseeable future is now on the table.

As Poslovni Dnevnik writes, the deadline given by the government to all those who raised their prices unjustifiably to return them to what they were back before Croatia entered the Eurozone (December 2022), or sanctions would be imposed expired just a couple of days ago. Economy Minister Davor Filipovic repeated in an interview with Media Servis that either freezing the prices of a wider number of products or cancelling subsidies entirely is currently being considered in an attempt to combat this situation.

When asked why he was going off an the initial idea of having blacklists on which Croatian stores and service providers who had unjustifiably raised their prices would be placed, he replied that his ministry had sent a letter to the ten largest retail chains with the request that they provide the government with their respective price lists for about 80 products for the whole of last year.

"We've asked that they continue to deliver their price lists to us every two weeks, which we will put on the Internet and enable everyone to watch the price movements in the largest retail chains in one place. I'm not going to say that it is a black list, but if people can see it all and make a comparison in one place, it can be observed in that context,'' said Filipovic of the move.

"The State Inspectorate established that there was an increase in prices of food products from 6 to 20 percent, and that includes bakery products as well,'' he added.

You can read more about the scrutiny Croatian stores and other service providers have been placed under from the powers that be, which includes all authorities from the Tax Office to Customs and the State Inspectorate in our most recently published Week in Croatian Politics article, which discusses the topic at length.

January the 13th, 2023 - This week in Croatian politics has been dominated by many stores and service providers upping their prices and allegedly taking advantage of what's known as ''rounding'' following Croatian Eurozone accession. Plenkovic has also been busy dismissing ministers once again, and the reaction to that has been varied. 

Price rises are hitting pockets and bank accounts

Croatia officially (and finally) entered the Eurozone on the 1st of January, 2023, with the kuna still permitted to be used as legal tender until the 15th of this month, after which only euros will be allowed to be used to make payments for goods and services across Croatia. As most people expected, there were price increases which came along with the euro, and while this is something that has occurred to some extent or another in all countries which have adopted the bloc's single currency, introducing it during a period dominated by economic woes and inflationary pressures likely didn't help much either. 

Shops have increased their prices for many basic goods and in some cases, there appears to not have even been an attempt made to hide it. With individuals feeling the blow to their back pockets and bank accounts more than ever, the government was asked to step in and control the situation, with many claiming that companies are taking advantage of the introduction of the euro. 

Some politicians, such as Kreso Beljak, believe that PM Andrej Plenkovic already spends too much time meddling with things that politics shouldn't be spending much time on, and although he himself has admitted that he has been hopping over the border into Slovenia to do his shopping because it's cheaper, he has said he doesn't blame Plenkovic for the euro price hikes. He believes that the market and the level of demand determines the price of goods, and that Plenkovic's government should spend more time making sure wages match the cost of living rather than spending time trying to lower prices.

It's easy enough for someone such as Beljak who lives in Samobor, which is very close to the Slovenian border, to shop and spend less in Slovenia, especially now Croatia has joined Schengen and the border between the two nations is no more, but most of the population expects government intervention. A recently held government session saw the matter discussed at length. The differences between Slovenia and Croatia and why the same products are cheaper over the border have also been explained.

The government did decide on some measures to try to combat the issue with price hikes following euro introduction, however, and Plenkovic has made no effort to hide his sheer disappointment with those trying to take advantage of the situation.

Plenkovic promises action against ''unjustified price increases''

"This is nothing other than pure profiteering and we oppose it," Plenkovic said about unjustified price increases in his opening speech at the aforementioned recently held government session. He announced that inspections will be carried out in stores and called on them to lower their prices to the level they were at before the introduction of the euro. The government also tasked the Ministry of Economy to use all possible measures to collect complete and accurate information on price movements and monitoring.

"We found that some individuals have obviously seen fit to take advantage of the euro conversion to raise their prices for no reason. I'd like to thank the business entities that adapted in accordance with the proper regulations and those who didn't impose any unjustified price increases," said the Prime Minister.

He said that they and most other people were expecting minimal price increases, but that we're unfortunately now witnessing something else entirely, which is profiteering. He stated clearly that his desire is to protect individuals during this transition period and recalled the measures that the hovernment adopted during the COVID-19 crisis.

Then he talked about inflation, a burning topic for Croatian politics of late. "What's happening to us is happening to everyone else as well, but everyone else [in Europe] has a higher rate of inflation than we have here in Croatia and we're fighting against a phenomenon that reduces peoples' purchasing power, and that's why we'll sanction all phenomena that leads to an increase in inflation. The purpose of introducing the euro is to empower the domestic economy, not that the state gives billions and that someone gets rich at the expense of the people, so it's important that everyone understands that those who are doing this will not get away with it and that the state will act, and it will act on behalf of everyone," he said.

"There's just no justification for what has increased, for people to raise their prices like they have, it's pure greed. The government will do everything in its power to prevent this from continuing to happen. All authorities will contribute to uncovering unfair practices and everyone will be tasked to act on this. I call on everyone to distance themselves from those who have unjustifiably raised their prices, I'm also calling on all business entities to revise their prices and adjust them back to those from the end of December," said Plenkovic.

"The state will not simply sit back and watch this happen without doing anything about it. Everyone who thinks that they can cast a dark shadow on the strategic success of the state will not succeed. The Tax Office, Customs, and the State Inspectorate all know this. They will go out into the field to correct what individuals are doing for absolutely no reason," the Prime Minister warned.

The measures, as explained by Economy Minister Davor Filipovic

"All business entities, including credit institutions and other financial service providers, and all those who have raised their prices against the law, are obliged to revise the retail prices of their goods and services and make sure that they're determined by the price levels of December the 31st, 2022," Minister Filipovic said.

"The inspectorate, tax, customs, ministries, Croatian National Bank (CNB) will implement increased levels of supervision over entities within their jurisdiction without delay," he said.

In addition, the Ministry of Economy will be put in charge of preparing and launching a digital platform for monitoring prices.

State Inspectorate boss Andrija Mikulic chimes in on increased monitoring, inspections and supervision

The head of the State Inspectorate, Andrija Mikulic, spoke about price increases and unjustified price increases and the number of inspections being carried out at this moment in time. "We've started with the inspections," Mikulic assured, adding that more than 8,000 inspections have been carried out since September. "We found 1,744 violations of the law," he added.

"Since January the 1st, 2023, we've received an increased number of reports about price increases, whether in trade, catering and hospitality or service activities. Bearing in mind that business entities freely set their own prices, inspections have begun based on the received reports. From January the 2nd to the 4th, over 200 inspections in the field of retail trade were carried out, including at bakeries and service activities, mainly hairdressing, body care and different kinds of maintenance services.

"We will determine whether price increases we uncover are unjustified or not. If it is established that they can't be justified, misdemeanor measures will definitely be taken".

In the service industries (hairdressing salons and the cosmetics/beauty field), increases ranging from 10 to a whopping 80 percent were observed. In the tourism industry, within which 151 inspections have been carried out, about 50 irregularities were observed, as well as price increases of up to 10 percent. In 306 inspections, 96 violations were determined.

Mikulic assured once again that the proper measures will be taken against those who are taking advantage of the introduction of the euro and of inflation in order to try to pull the wool over peoples' eyes and line their own pockets at the expense of individuals.

For more, make sure to check out our dedicated section, and keep an eye out for our Week in Politics articles which are published every Friday.

January the 12th, 2023 - Eurozone Croatia is now finally a reality, and while the country grapples with the new currency, price hikes and attempts to get rid of kuna left in sock drawers and under mattresses, one Zagreb cafe owner is sick to the back teeth of being paid in mountains of lipa coins for coffee.

Many people thought they were prepared for the birth of Eurozone Croatia, but it seems as if most of us have forgotten the unholy amounts of rather pointless lipa coins we all have lying around at home, in jacket pockets and more than likely under the living room rug. These tiny golden coins which have more or less always been somewhat good for nothing are now an even bigger thorn in the side than they were when the kuna was the official currency. Cafe owners are now being bombarded with them.

As Poslovni Dnevnik/Zvonimir Varga writes, there are only a few days left during which people can continue to pay for items and services in kuna and lipa, and some people are using the opportunity to get rid of excess coins while it lasts.

While banks and other financial institutions are happy to transfer small denominations such as lipa into a bank account without any major problems, cafe owners are faced with a bigger problem. Some people have decided to make the recent cafe-based nightmare of ''becoming an unwilling exchange office'' come true leave all of their lipa change on their tables. As previously mentioned, even when the kuna was the country's official tender, nobody was a fan of lipa coins, people are even less of a fan now that the kuna is set to enter the history books entirely.

To make matters worse for cafe owners and staff, some people simply leave their money on the table and leave after having a coffee, and one Zagreb cafe owner from the Jarun lake area has had more than enough of having lipa coins thrown at him.

After finishing their drinks, one couple left a pile of kuna, lipa and even equally annoying euro cents on their table and left while the waiter was busy doing something else. The staff of the cafe were not even that annoyed by the fact that they ended up being paid like that as such, but by the fact that the couple left the coins in this way and got up and left.

"What kind of people are they, it looks like they ran away" asked one of the waiters, while another concluded: "This way of paying is shameful!".

For more on Eurozone Croatia, make sure to keep up with our news section.

January the 10th, 2023 - Croatian politician Kreso Beljak, who has been the President of the Croatian Peasant Party since back in 2016, has openly admitted to crossing the Slovenian border to do his shopping since the euro Croatia price increase issue has become so apparent.

As Poslovni Dnevnik writes, while appearing as a recent guest of N1 studio, the President of the Croatian Peasant Party, Kreso Beljak, commented on the situation that is currently on everyone's lips - the very obvious euro Croatia price increase. Beljak says that he isn't surprised by any of these price increases: "Prices of items are determined by the market, and I'm not surprised that prices have risen. Obviously, the demand is like that. It's a simple rule of the market economy - the higher the demand for something is, the higher the price for it will be,"

That said, he made no effort to hide the fact that he thinks that the difference in prices between Croatia and neighbouring Slovenia is no less than shameful: "Personally, it doesn't matter to me or the people in Samobor if we go to Zagreb or Slovenia to do our shopping. In Slovenia, instead of 100 euros, I spent 70. My wife was on the phone to be back in Samobor comparing the prices. It's shameful,'' Beljak stated.

However, and rather surprisingly, Beljak doesn't really blame Plenkovic for this situation. "This situation is unsustainable, but to blame politics for it in the 21st century in a market economy, well... that's what we wanted in the 90s. We wanted the market to determine the price, not for the state to conduct it all. I do blame Plenković for another situation, though, he tries to get involved with things that politics shouldn't be involving itself with. The political spectrum should be dealing with the growth of salaries, pensions, tax relief, the reduction of levies and so forth. Plenkovic and HDZ do none of this. And that's another reason why our purchasing power is weak."

"If someone wants to buy something - that's a matter of the market. The market forms the prices, not the state. The state is there to ensure a higher salary, to make so people are able to buy more in such cases. The state needs to reduce the taxes and levies so that net wages rise, and as such, peoples' purchasing power."

When asked about blacklists for companies taking advantage of the euro Croatia price increase trend, Beljak explained: "Now it can be seen that certain omissions have been made. I think the intention was good in regard to giving people a period of two weeks, which now turns out to have complicated the situation even more. The euro should have been introduced on January the 1st, 2023, and kuna should have immediately been made so it exchanged for euros in banks for a period of one year."

"In general, I'm talking about a system that doesn't work, about an HDZ that doesn't work. It's hard to expect that such a party that simply doesn't care about people in the slightest would even think of doing anything to help or protect them. Plenkovic is now busy rubbing his hands together, and so is his finance minister, because every euro Croatia price increase is an increase in VAT and a bigger payment into the state budget,'' Beljak concluded, noting that HDZ wants more money for ''uhljebs''.

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