ZAGREB, 15 July 2022 - The Sabor on Friday confirmed Marko Primorac as the new Minister of Finance with 77 votes in favour and 55 against, after former minister Zdravko Marić left the government at his own request.

After Minister Primorac swore that he would conduct his duties conscientiously and honourably, in accordance with the Constitution and laws, Parliament Speaker Gordan Jandroković wished him success in his demanding and responsible work.

Primorac is an associate professor at the Faculty of Economics in Zagreb. He studies public finances, local finances, the tax system and public debt management.

He has worked with the Ministry of Finance on a number of task forces in different rounds of tax reforms, as well as on the model of a financing system for local and regional self-government units.

From 2018 to 2020, he served as economic advisor to former president Kolinda Grabar-Kitarović.

Since 2016, he has been a member of the Steering Committee of the Croatian Pension Insurance Institute. From 2017 to 2018, he was the deputy chairman of the Supervisory Board of the Hrvatska Elektroprivreda electricity provider and since 2018 he has been the deputy chairman of the Audit Board of the Hrvatske Lutrije national lottery.

Since 2021, he has been an external member of the parliamentary Finance and Central Budget Committee.

Prior to today's vote in the Sabor, Primorac's appointment was supported yesterday by the parliamentary Finance and Central Budget Committee after being interviewed by the committee.

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ZAGREB, 6 July 2022 - The ruling HDZ party's coalition partners said on Wednesday that the resigned Finance Minister Zdravko Marić was one of the most successful ministers who had led Croatia into the euro area and who had results, with just an occasional mistake. 

Speaking to reporters ahead of a meeting of parties making up the parliamentary majority, Reformists leader Radimir Čačić said that Marić had done his job excellently and had results to show.

Čačić: Number of excellent results, guarantees a failure

"His results are entry to the euro area, the country's improved credit rating and debt stabilisation, which is very important. However, he also made big mistakes, such as the billions of kuna spent on guarantees for shipyards. He obviously could not say no to that," he said.

Speaking of Marić's successor Marko Primorac, Čačić said that he lacked experience in the private sector, which could pose a problem.

"The new minister understands public finance but he has no experience in the real sector. It is one thing to read about football, and another to play it," he said.

Hrebak: Politicians are not robots

HSLS leader Dario Hrebak said that there was nothing mysterious about Marić's departure.

"If he feels that he has done his best, that there are no more challenges, that his ambitions have been fulfilled, then his move is responsible. Marić has kept the financial system stable, weathered all crises so far and in a few months we will be joining the euro are," Hrebak said, commending the minister for tax reforms, which, he said, made him the country's best finance minister.

"But politicians are not robots, they have emotions and plans. He has been doing a very responsible job for more than six years for a salary that is 4-5 times lower than what he could have earned," he said, noting that Marić's successor would have enough time to acquaint himself with the system and prepare for the challenges expected in autumn.

Čuraj: Personal, family reasons 

The HNS party leader and state secretary at the Finance Ministry, Stjepan Čuraj, said that he believed the reasons why Marić had resigned were personal and had to do with his family.

He noted that the finance minister's job was not very rewarding and that the salary did not match the amount of responsibility.

Six years is a long period, he has made results and has something to leave behind, Čuraj said, adding that the new minister was an expert and that he had operational experience as a member of supervisory bodies.

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ZAGREB, 6 July 2022 - Government spokesman Marko Milić said on Wednesday that Finance Minister Zdravko Marić would speak about the reasons for his resignation in greater detail on Thursday, before or after a government session, and that his departure had not shaken the government or the ruling coalition, which were stable.

In an interview with the N1 broadcaster, Milić said that Marić had informed Prime Minister Andrej Plenković of his plan to leave the government a few weeks ago and that he attended today's meeting of the inner cabinet and would address members of the parliamentary majority and HDZ party leadership later today.

"He had an emotional address before the government and said that his decision was difficult for him," Milić said, noting that with regard to the reasons and circumstances of his departure, Marić would be available for comment on Thursday, before or after the regular government session.

Milić said that the government would "continue to work as it has so far", adding that the choice of Marić's successor - Marko Primorac of the Zagreb Faculty of Economics, "is a message of stability and continuity".

He said that Primorac's appointment would be completed by the start of the parliament's summer recess, July 15.

Meanwhile, Minister Marić will travel to Brussels to attend a session of the Economic and Financial Affairs Council (ECOFIN), which will complete the process of Croatia's accession to the euro area. ECOFIN's decision is expected on 12 July.

Asked if Marić had told the PM the reason for his decision to leave the government, Milić did not give an explicit answer, calling for calming down and "not generating panic or chaos."

The government spokesman does not believe Marić's decision to leave is reason for an early election, adding that the Opposition "should pray God we do not go to elections" considering the state it is in.

He said that the government was grateful to Marić but that it had to move on because the challenges were big, with a difficult yet not cataclysmic autumn ahead.

Speaking of Croatia's having lost an arbitration case brought by MOL, which alleged that the Croatian government did not honour its obligations from a gas business agreement, Milić said the report about the loss of the case was not carried in its integral form and that a large part of MOL's demands had been rejected, that the potential financial damage of $1.1 billion had been reduced to €184 million, and that with interest it amounted to just above $200 million.

Milić said the government accepted the arbitration decision but would continue to use the legal instruments at its disposal and that the payment of damages to MOL would not pose a major problem for the state budget.

As for a possible new set of measures to help citizens and the business sector with rising prices, Milić said the government would "be with citizens and the business sector as long as necessary" but that it was not the only market actor and that others, too, had to shoulder some of the burden.

In that context, he announced the continuation of talks with small fuel distributors, describing their announcement that they would have to close down as an instrument of pressure.

The government's decree on fuel wholesale prices is not a blow to small distributors but will affect their profit, he said.

For more, check out our politics section.

ZAGREB, 6 July 2022  - The news of Finance Minister Zdravko Marić's unexpected resignation on Tuesday was followed by the first reactions of opposition politicians who in their comments told Prime Minister Andrej Plenković that the time was ripe for new parliamentary elections.

Social Democratic Party (SDP) political secretary Mirela Ahmetović said in a Twitter post that "the last time Marić resigned, his boss fled the country and the company folded," a reference to former Agrokor company owner Ivica Todorić.

When the most popular minister leaves, that means the government has fallen and Plenković just does not want to admit it. Enough of this agony, let's go to elections, Ahmetović said.

Bridge party vice-president Nikola Grmoja said in a Facebook post that "the first officer of Plenković's Titanic, holed by corruption, scandals and inflation, is fleeing."

If health reasons are not the reason, and I hope they are not, there are only two options - either he has found himself under investigation - he was involved in many scandals which, admittedly, left him unscathed - or he is leaving the government aware of the kind of economic Armaggedon that is about to hit us, Grmoja said, calling for new elections.

The head of the parliamentary committee on European affairs, Domagoj Hajduković of the Social Democrats, also commented on Marić's decision.

"I wonder if 'personal reasons' have to do with the implementation of euro introduction about which I have been warning for some time. True, we got a positive decision, but someone must also implement it, and we are very irresponsible in that regard," Hajduković said.

Other comments by opposition politicians were announced for Wednesday.

Also, Prime Minister Andrej Plenković will inform the inner cabinet and parliamentary majority of Marić's decision and introduce Marko Primorac as the candidate for his successor. Primorac's nomination will be discussed by the parliament as early as next week.

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ZAGREB, 24 May 2022 - The ministry of finance on Tuesday dismissed the accusations made by the Franak association about the authorities having betrayed Croatian consumers.

Over the past few years, the government has continued, both on its own and in cooperation with the State Attorney's Office (DORH), to dismiss all attempts aimed at the questioning of the constitutionality of so-called laws on the conversion of CHF-pegged loans and their adjustment with the EU acquis, the ministry said in a press release.

First and foremost, this government is committed to protecting consumers, and to this end, it has provided arguments proving that the above-mentioned laws are in line with the Croatian Constitution and also in accordance with the EU acquis communautaire, which was conducive to efforts to keep those laws in effect, with an emphasis on their being adopted to redress imbalances in the rights and responsibilities of the parties to the relevant contracts, said the ministry.

The ministry states that after the Court of the European Union delegated rulings on the consumers' rights to national courts and given that several relevant trials are ongoing in Croatia, the government will refrain from any further comment that can amount to interference in those processes for the time being.

For more, check out our politics section.

ZAGREB, 18 May 2022 - Speaking in the Sabor on Wednesday, Finance Minister Zdravko Marić denied claims by some opposition MPs that allocations for post-earthquake reconstruction had been decreased in the 2022 budget revision was decreasing allocations for reconstruction.

Funds are not being decreased, in fact, they are being increased by about HRK 300 million and the use of funds has been facilitated, Marić told lawmakers during a debate on the state budget revision.

Prior to the formal debate on the budget revision, the opposition made a series of objections to the government's document, saying that funds for healthcare had not been planned well and that funding for reconstruction was being decreased.

Social Democratic Party (SDP) leader Peđa Grbin asked why funds for reconstruction were being decreased by more than HRK 100 million.

He recalled that when the budget was adopted the SDP said that the allocation for the health sector had not been planned well and concluded that another budget revision would be necessary in the autumn and possibly a third one by the year's end.

Anka Mrak Taritaš (Glas) said the budget revision was proof that there would be no reconstruction. She said that funds had been increased for the health and defence ministries, which, she said, were headed by the two least successful ministers.

MP: Damage caused by inflation possibly HRK 20 billion

MP Zvonimir Toskot (Bridge) said that his party had calculated that the damage caused by inflation could amount to HRK 15 or even HRK 20 billion and that "nobody is discussing how to compensate for that damage," to be paid by the entire society.

If the cost of corruption of HRK 70 billion is added, we get an amount of HRK 90 billion, which is half the budget, he said.

Željko Sačić (Sovereignists) said that he was unpleasantly surprised that the revision did not allocate more funds to the USKOK anti-corruption office or the state attorney's office to improve their working conditions.

"It seems as though the state has profited in this crisis. The question though is how will citizens and enterprises survive," said MP Ružica Vukovac, noting that the state had collected HRK 1.8 billion more in VAT and HRK 1.9 billion more in contributions on wages.

HDZ group supports budget revision

The Croatian Democratic Union (HDZ) group supported the government's budget revision proposal.

Grozdana Perić (HDZ) recalled that the start of the year brought new geopolitical problems resulting in problems in energy supply and inflation growth, which was why the government had to deal with additional problems, such as ensuring the sustainability of the health sector, pensions, and help citizens with energy prices.

Ivana Posavec Krivec (Social Democrats) responded by saying that the budget revision was not due to the situation caused by global circumstances but rather due to the government's poor budget planning and the failure to implement crucial reforms.

For more, check out our politics section.

ZAGREB, 19 March 2022 - Finance Minister Zdravko on Saturday welcomed the affirmation of Croatia's credit rating by the Standard & Poor's credit rating agency.

"In the present circumstances, this is very good news. The report is very positively worded," Marić told a press conference.

Standard & Poor's on Friday affirmed Croatia's credit rating at 'BBB-/A-3' with a stable outlook, noting that the conflict in Ukraine might affect Croatia through weaker global demand, reduced tourism and inflation.

The agency expects the Croatian economy to grow at a stable pace in the next two years despite unfavourable inflation trends and the macroeconomic consequences of the war in Ukraine. The government is expected to remain committed to its reform programme, successfully absorb significant EU financing, and gradually rebuild the fiscal space it lost in the aftermath of the COVID-19 pandemic.

According to S&P, the Croatian economy is likely to expand at a rate of 3.7% in 2023 and 3.4% in 2024 and 2025. However, the growth forecast for this year has been revised down from 5.0% to 2.5% because of global geopolitical uncertainties following Russia's military intervention in Ukraine and rising energy and commodity prices.

Marić said that over the next month the government would update the official macroeconomic projections for 2022, including projections for growth and inflation. S&P projected the inflation rate for this year at around 6%.

The growth forecast downgrade is also the consequence of last year's growth, which was above all expectations, and uncertainties related to the direct and indirect effects of the Russian invasion of Ukraine, the finance minister said.

As for inflation, he said that it was expected to continue picking up in the first half of the year, while its movement in the second half would depend on geopolitical developments and energy and food price trends.

Eurozone entry is a positive risk

Marić said he was particularly glad that S&P had recognised the government's efforts to improve the absorption of EU funding as well as its efforts regarding the EU's Multiannual Financial Framework and the National Recovery and Resilience Plan.

He said that the implementation of the National Recovery and Resilience Plan was going very well, adding that everything envisaged under the plan had been fulfilled and that a new tranche of €700 million was expected in June.

S&P said that despite the complex inflationary context Croatia is on track for entry into the eurozone by 2023 and that the government, in line with euro adoption provisions, will reduce its fiscal deficit below the Maastricht reference level of 3% of GDP in 2023-2025.

Marić said that eurozone entry was a positive risk and would help increase the country's credit rating. He said it was very important for the government to maintain its good standing and trust in international financial circles, even as regards the preparation of an international bond issue, adding that the S&P report also contributed to the government's reputation.

Marić revealed that he had presented to S&P the government's package of measures to mitigate the impact of inflationary pressures, worth nearly HRK 5 billion, including a VAT reduction from 13% to 5.0% for a wide range of food products, such as fresh meat, fish, fruit and vegetables.

Asked by the press if he expected further increases in retail prices, he said this was hard to predict, expressing hope that the VAT cut would alleviate further price increases. He noted that retail chains had begun lowering prices even before 1 April, when the government package goes into force, adding that this was good and that it indicated high competition in the retail sector.

Marić said he had met with executives from the 10 leading retail chains in the country. "They expressed their readiness to be as receptive as possible, but noted that they were not the only link in the chain, because there are suppliers as well."

Commenting on media reports that people were increasingly buying certain items, such as cooking oil, Marić said that despite all concerns there was no need to stock up on food.

He said that the government was also working on measures concerning the inflow of Ukrainian refugees. They will be given both institutional and financial support, which will have certain repercussions for fiscal policy, he added.

According to the latest data, over 7,500 Ukrainians displaced by the war in their country have found refuge in Croatia.  

Marić denies co-owner of Jadranka hotel group booked accommodation for him

Responding to questions from the press, Marić denied an article on the Net.hr news website that Krešimir Filipović, co-owner of the Jadranka Group, had book him accommodation for four days at the Bellevue Hotel, owned by Jadranka, in 2019.

"That was the first time I met Mr Filipović. I had not had any direct or indirect contact with him before that, nor are we in regular contact today," Marić said.

He said that all the loans to this company from the Croatian Bank for Reconstruction and Development had been approved long before his term in office, adding that the company was duly meeting all its obligations in that regard.

Net.hr wrote about Jadranka following a complaint by Arsen Mujagić, a civil society activist from Mali Lošinj on the northern Adriatic island of Lošinj, according to which one of Jadranka's owners is a fund owned by Russian citizens who have been placed under EU sanctions. 

Marić said that the Register of Beneficial Owners is public, and that everyone who condemns the Russian aggression on Ukraine agrees that the enforcement of sanctions is inevitable.

Earlier in the day, the Finance Ministry said it was not true that there had been a change of ownership in Jadranka after the article on Net.hr.

On 18 August 2020, Predrag Perenčević and Krešimir Filipović were entered in the Register of Beneficial Owners as the beneficial owners of Jadranka d.d. and there have been no changes since, the Finance Ministry said in response to Net.hr.

The Ministry said that Marić had not stayed in a luxury or presidential suite, stressing that the minister had booked the accommodation himself and paid for it.

Responding to the question about its ownership and whether Russians still had stakes in the company, Jadranka said recently that there had been a change of ownership in 2014, when the Zagreb-based Beta Ulaganja company became a full owner of Jadranka Group.

"Croatian citizens Predrag Perenčević and Krešimir Filipović have continually been the ultimate owners of Jadranka Group. Their financial assets and investments are managed by the Investment and Asset Management Company through Beta Ulaganja d.o.o., as entered in the Court Register and the Register of Beneficial Owners," Jadranka said then.

ZAGREB, 1 March 2022 - After the euro is introduced in Croatia, consumers must not be in a less favourable position than before the common European currency was introduced, Finance Minister Zdravo Marić said at the conference "Croatia as part of the euro area" in Varaždin on Tuesday.

The conference was organised by the Večerjni List daily and the Vindija food processor. Marić said that regardless of the current situation and challenges Croatia is faced with, it has to see the priorities that have been worked on for many years, and one of those is introducing the euro currency. 

Introducing the euro is considered to be positive for the economy and society.

"I consider that Croatia has more benefit from introducing the euro than any possible lack or fault. The changes and adaptations that are required to be implemented need to emphasise and realise all those benefits while fear and faults have to be brought to the least possible measure," said Marić.

Marić recalled that loans and deposits would be converted to the euro automatically on 1 January 2023 while cash would be exchanged without any fee in the first year in commercial banks, the FINA agency and post offices. After that, it will be possible to exchange coins at the Croatian National Bank (HNB) for a period of three years and banknotes for an unlimited time.

Vindija food company CEO Nenad Klepač said that he mostly expected Croatia to benefit from joining the euro area.

"It will contribute to the long-term improvement of living standards for the Croatian population. We see a lot of new opportunities, primarily on the markets of the euro area, in 19 countries with a population of 340 million," said Klepač.

Erste Bank CEO Christoph Schoefboeck said that the introduction of the euro would be exceptionally demanding and expensive for Croatia's banking system and that the one-off cost was estimated at 80-100 million euros. Schoefboeck nevertheless believes that euro introduction will have a positive effect on the Croatian economy and society.

ZAGREB, 17 Jan 2022 - Finance Minister Zdravko Marić on Monday called on all stakeholders in the society, including media and major actors in the euro changeover in Croatia, to do their utmost to prevent anyone from using this process to "fish in troubled waters" and charge unfair and excessive prices.

Addressing a news conference at which he, together with Prime Minister Andrej Plenković and Croatian National Bank (HNB) governor Boris Vujčić, outlined a draft act on the introduction of the euro as legal tender in Croatia, Marić underscored the obligation to display prices both in kuna and euro from 5 September through the whole of 2023.

The draft act also envisages some exemptions from this obligation when there are physical limits for such displays or excessive costs. Thus, stands in farmers' markets, newsstands, electronic displays at filling stations, or taximeters will be exempted from this obligation. Also, commodities with prices already printed on them will be sold until stocks last.

However, they are not exempted from issuing invoices and bills both in the kuna and the euro, Marić said.

The authorities today published guidelines for the adjustment of the enterprise sector during the process of switching to the euro.

The guidelines have been prepared by the coordinating committee for the adjustment of the economy and consumer protection, with the economy ministry at its helm.

Undue price rises forbidden

The document highlights the major principle that undue price rises in the euro changeover are forbidden.

Marić admitted that the whole matter had not been regulated by law and called on all actors to join in the fight against any undue price rises.

Fulfilling Maastricht criteria

The minister recalled that Croatia could enter the euro area on 1 January 2023, provided that it fulfilled the convergence criteria, and a final decision on the assessment of Croatia's performance is expected in July 2022.

One of the Maastricht criteria refers to sound and sustainable public finances, which includes trends in the public debt and deficit. Marić said that this was under control and that their reduction was being conducted at an adequate rate.

Also, concerning price stability as a criterion, the inflation rate cannot be more than 1.5 percentage points above the rate of the three best-performing member states.

Marić said that inflation trends should not undermine the entire process.

HNB Governor Vujčić also believes that the convergence criterion about price stability would be met.

The reference value for the inflation rate has never been under the average rate of inflation in the eurozone, Vujčić explained.

Prices of consumer goods and services in Croatia, as measured by the consumer price index, increased by 5.5% in December 2021 compared with December 2020, while in the whole of 2021 they rose by 2.6% year on year, the State Bureau of Statistics (DZS) said today.

Regardless of the acceleration of inflation in recent months, Marić said that Croatia's inflation rate was still rough around the average of the euro area or slightly below this average.

Last Thursday, Marić said that the government had revised its inflation growth projection for this year up to 3.5%, adding that VAT cuts were being considered as part of a set of measures aimed at buffering energy price hikes. Speaking to the press, Marić said then that the government was following developments with price hikes.

He said inflation accelerated in recent months and that its growth in December might exceed 5%, which would be visible at the start of this year.

That prompted the government to revise its projection to 3.5%, up from the 2.5% increase forecast earlier, he added.

The minister said that according to available data and expectations, higher inflation rates were expected in the first months of this year, "after which there should be a convergence to an average 3.5%."

Besides food, the main focus is on energy prices given the price trends of raw materials at the European level, he said, adding that the price of gas for households would be corrected as of 1 April.

He said the government would come up with a package or individual measures aimed at buffering the increase so that living standards were not affected in a major way.

For more, check out our dedicated politics section.

ZAGREB, 7 Nov 2021 - Finance Minister Zdravko Marić has been found to be positive for COVID-19 after undergoing a test at the weekend, the government announced in a press release on Sunday.

Marić underwent a test after a member of his family had developed symptoms of the infection. His test returned positive, after which epidemiologists have ordered him to stay in isolation for ten days.

The minister "is feeling well and for now, he has no symptoms of the COVID-19 disease. He will stay in isolation and perform his duties from home while following orders from his doctor and epidemiologists," the press release said.

Marić, as well as other cabinet ministers, were vaccinated against COVID-19 early this year, and would soon receive a booster dose, following recommendations by the Croatian Public Health Institute, government spokesman Marko Milić said, adding that several cabinet ministers had already received the third dose of vaccine.

Milić appealed to all citizens to get vaccinated if they had not done so yet because the vaccine protects against serious forms of the disease. He also appealed to people who had received their second shot six months ago or longer, especially the elderly or those immunocompromised, to get a booster dose as soon as possible.

He recalled that Deputy Prime Minister Boris Milošević and Labour Minister Josip Aladrović, who had become infected even though they had been vaccinated, had overcome the infection with very mild symptoms.

Also, the opposition Bridge party leader, Božo Petrov, said in an interview with Nova TV on Saturday evening that he was positive for COVID-19. "Two or three days ago I found out I was infected. I had symptoms, I called my doctor and did a PCR test, which showed I was positive," he said.

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