ZAGREB, 22 July 2022 - The Croatian Employers' Association (HUP) on Friday called on the government to adopt a new aid package for the enterprise sector because of an enormous rise in energy prices.

Employers are recommending four measures - to limit the price of electricity to up to €150 per megawatt-hour for all economic operators from 1 August this year to 31 December 2023; suspend from 1 August 2022 to 31 December 2023, or permanently reduce grid use charges and excise taxes; temporarily reduce charges for renewable energy sources; and reduce the income tax base by the amount of the increase in the cost of electricity for businesses compared with 2021.

"Despite the further rise in energy prices and the deteriorating state of the economy, Croatia has still not expanded its initial package of measures adopted in February, especially in regards to significant increases in prices of electricity, which is the primary source of energy for the majority of enterprises," HUP said.

It added that the enterprise sector expects further government interventions because it cannot cope with further increases in energy prices on its own any more.

Employers warned that failure by the government to mitigate the rise in electricity prices would jeopardise not only the operation of individual companies but also the growth of the entire economy.

"Without the government's intervention, enterprises will be compelled to considerably increase the prices of their products and services, which, in the present circumstances of galloping inflation, will have an additional and significant impact on the general inflation rate," HUP said, noting that the measures they are recommending do not require any direct allocations from the budget.

The enterprise sector is willing to invest in energy efficiency and renewable energy sources, but the government needs to change the present legislative framework to make it stimulating enough for companies, HUP said.

For more, check out our politics section.

ZAGREB, 6 April 2022 - In the last two years, businesses in the Croatian animal husbandry sector have faced serious disruptions, which have been additionally worsened by Russia's invasion of Ukraine, according to keynote speeches delivered at the start of a conference of cattle breeders on Wednesday.

The two-day conference, which began in the northern town of Sveti Martin na Muri, has brought together cattle breeders and representatives of the Croatian Ministry of Agriculture and the Food Agency.

Zdravko Barać of the Agriculture Ministry told the event that in the last two years the ministry had implemented a set of aid schemes. One of those schemes envisages the allocation of HRK 171 million and to date, HRK 140 million has been disbursed.

Despite some problems, production per (animal husbandry) business has increased by 13.5% since last year, said the deputy head of the Croatian Agency for Agriculture and Food, Krunoslav Karalić.

For more, check out our lifestyle section. 

ZAGREB, 20 March 2022 - A new round of applications for subsidised housing loans starts on Monday when the relevant APN agency starts receiving the requests, while the government has set aside HRK 50 million (€6.7 million) for this purpose.

After the completion of a public call for banks to submit their offers, on 4 March, APN concluded contracts with 14 credit institutions on subsidised housing loans.

The lowest effective rate of 1.99% for both the kuna- and the euro-pegged loans was given by two banks: Erste&Steiermarkische banka and Karlovačka Banka for the latest round.

According to the data provided by the ministry, 22,169 requests for subsidised housing loans were granted between 2017, when the scheme was introduced, and March 2021.

In the families that use housing loan subsidies, roughly 5,000 children have been born since 2017 and 13,130 children under 18 have been reported in the loan requests.

More than HRK 456.7 million has been invested in state-subsidised housing loans so far.

The eligibility criteria for applicants is that they are under 45, and are first-home buyers.

Calculating the amount of subsidy depends on the location of the property covered by the scheme.

Applicants in locations in the underdeveloped and rural areas qualify for higher subsidisation.

For more, check out our lifestyle section.

ZAGREB, 9 March 2022 - The government on Wednesday adopted a set of measures to buffer energy price hikes worth almost HRK 5 billion, including a bill of amendments to the VAT Act, decisions to subsidise gas prices for households and small businesses, and once-only aid to pensioners and the socially vulnerable.

The measures enter into force on 1 April, whereby the government is directly helping households and businesses, Prime Minister Andrej Plenković said.

The measures are aligned with European Commission guidelines which allow for regulating prices in case of need and justifiable circumstances, he added.

VAT cuts

The government sent amendments to the VAT Act to parliament for fast-track adoption, under which VAT would be reduced from 25% and 13% to 5% on children's food, edible oils and fats, butter and margarine, live animals, fresh meat and fish, vegetables, fruit, eggs, seedlings, fertilisers and pesticides, food for animals, and tickets for concerts, sporting and cultural events.

The government also proposed a 13% VAT rate on natural gas and heat deliveries, firewood, and menstrual products, among other things, and a 5% VAT rate on natural gas deliveries from 1 April 2022 to 31 March 2023.

The VAT cuts are estimated at HRK 2.1 billion.

Gas subsidies for households and businesses

To buffer the impact of gas price hikes, the government decided to subsidise the price for households with HRK 0.10/kWh as well as the price for microbusinesses and SMEs, whose average annual consumption is up to 10GWh, with HRK 0.15/kWh.

The cost of the subsidies is HRK 1.2 billion and will be financed by selling greenhouse gas emission units at an auction in Croatia. The government estimates that the revenue from the sale of those units by 2025 will amount to HRK 4.72 billion.

The government also decided to release 22,000 tonnes of diesel on the market to be sold at market prices.

Measures for the socially vulnerable

At the moment 51,000 persons eligible for a minimum allowance and 40,000 persons eligible for disability benefits and members of their households receive HRK 200 a month for their electricity bills. Today the government decided that 5,700 elderly persons eligible for the national allowance will also be entitled to this monthly allowance.

As of 1 April, this HRK 200 allowance will be doubled to cover gas bills. The annual cost of this measure will be HRK 300 million.

The government also adopted a decision on a monthly allowance, ranging from HRK 1,000 to 4,000, for 1,100 providers of social services for 40,000 persons.

Additionally, 2,570 foster families and 6,000 beneficiaries will be entitled to a HRK 400 monthly allowance, which measure will cost HRK 33 million.

The government tasked the Environmental Protection and Energy Efficiency Fund with paying HRK 1.2 billion from the auction sale of emission units into the state budget to be used as direct support to energy end buyers.

Energy allowance for pensioners

The government adopted a decision on a once-only allowance for 721,000 pensioners whose monthly pension is up to HRK 4,000.

Those whose pensions are up to HRK 1,500 will receive a HRK 1,200 allowance, those with pensions between HRK 1,500 and 2,000 will receive HRK 900, those with pensions between HRK 2,000 and 3,000 will receive HRK 600, and those with pensions between HRK 3,000 and 4,000 will receive a HRK 400 allowance. The cost of this measure totals HRK 480 million.

Aid to farmers and fishermen

The set of measures also envisages aid for 88,000 family farms estimated at HRK 200 million and for fishermen in the amount of HRK 75 million. This aid is subject to approval by the European Commission.

(€1 = HRK 7.5)

For more information on this, check out our dedicated politics section.

August the 29th, 2021 - Labour Minister Josip Aladrovic has revealed who the Croatian economic support created by the government as a result of the pandemic will continue to go to, and who it no longer will. Minister Aladrovic also announced a rise in both wages and pensions.

As Poslovni Dnevnik writes, economic aid for Croatian companies will remain in place only for those who continue to be the most vulnerable to the pandemic and to any introduced anti-epidemic measures, announced Minister Aladrovic. He stated that because of the easing of the country's epidemiological measures, he sees no reason to continue to stimulate individual employers.

Minister Aladrovic also stated that aid will continue to be paid out to the organisers of sport and cultural events, the event industry, and perhaps the hardest hit of all - travel agencies.

"So, this will keep being paid out to a relatively small segment of our society, but to those who are most exposed," said Minister Aladrovic as a guest on Dnevnik Nova TV, adding:

"If there are economic disruptions again, which we hope won't occur, we're still ready to help those to whom the disruption occurs," he said, calling once again for people to get vaccinated as the best way to preserve both public health and the domestic economy.

As for the much talked about reforms, Minister Aladrovic said that they have been implemented and that he will continue to implement them, but he didn't give a concrete answer as to when concrete reforms in the healthcare system, public administration, or the judiciary will start. He pointed out that the coronavirus pandemic has slowed down certain reforms, but he remains confident that the Government will implement them by the end of its term.

He added that it is difficult to assess whether rising prices will push certain vulnerable individuals even further into poverty.

"What is good, is that salaries are rising," said Minister Aladrovic, adding that pensions are also rising. The average pensioner will receive about 60 kuna more per month, and Aladrovic says that it is equal to almost a billion kuna annually for the state budget.

He didn't bother to properly answer the question as to whether or not it is fair for the average pension to increase by around 60 kuna, and for members of parliament to have theirs increased by as much as 230 kuna. Aladrovic briefly stated that "harmonisation takes place in accordance with the legislative framework".

''Aware of the inadequacy of certain types of pensions, we've decided on a new way of calculating family pensions that are the least adequate and we'll do all that in the next step. The lowest pensions have been increased by more than 20 percent. I'm sure that movements within the pension system will also prevent any increase in poverty,'' said Minister Aladrovic.

Speaking about the Labour Law, Minister Aladrovic said that two things are changing, the relationship between fixed-term contracts and indefinite contracts.

''We want to reduce the number of fixed-term contracts and allow those who want to work more to be able to do that,'' he said.

For more, follow our politics section.

June the 11th, 2021 - Croatian tourist agencies are in a dire situation and have been for a while, state measures should finally come to the rescue - but not until the very last moment next week.

As Poslovni Dnevnik/Marija Crnjak writes, the rebalance of this year's state budget, which was presented by the Minister of Finance Zdravko Maric in Parliament on Wednesday, should include the money that will be spent on measures to help Croatian tourist agencies prepare for the rapidly approaching summer season. This particular sector is literally on its knees.

As has been unofficially found out, the decision on the adoption of measures that Croatian tourists agencies have been asking for for months should be made at the Government session next week, after the adoption of the supplementary budget.

It will be more than two months after the government announced the adoption of measures to help these agencies, which have so far been covered only by corona-fees for job preservation, and that is simply not enough for them to restart work whatsoever.

Croatian tourist agencies are still wary of such statements until they see concrete solutions actually made, but although help is arriving quite late, they say it will be more than useful to them at long last. It is a question of survival of about two thousand economic entities that have practically had no income since back November 2019, so for more than a year and a half.

It is not yet known whether this planned Government assistance will come in the form of the reimbursement of operating costs for the first months of 2021, as proposed by the agencies at meetings in the Ministries of Tourism and Finance, or whether it will be defined in some other way.

"We've been warning for months that we aren't going to have anything with which to start up our business when it starts again, and we're appealing to the authorities in the Government about it. Let it be known that Croatian tourist agencies didn't, unlike those from the catering and hospitality sector, receive any compensation for their business expenses, although they had even less turnover than some in that aforementioned sector. Restaurants were allowed to deliver food even during lockdown and then their terraces were allowed to be opened.

Although the work of Croatian tourist agencies was never formally banned, the fact is that due to all of the measures to prevent the spread of the infection, Croatian tourist agencies didn't have any income throughout the past year, but also during most of the time this year,'' stated Tomislav Fain, President of the Association of Croatian Travel Agencies (UHPA), which numbers about 240 agencies.

The situation is critical for many Croatian tourist agencies that may have saved employees, but now it is a matter of keeping their heads above water. The summer season practically started in Croatia last weekend, as did the reservations which are accelerating with the opening of the borders.

Katarina Hauptfeld, the owner of the Katarina Line Adriatic Cruise Agency, complained that she had a problem with the organisation of transfers and other services that are crucial for the realisation of what they offer.

"If the Government doesn't urgently help out with non-refundable assistance to Croatian tourist agencies, I honestly don't know how we're going to manage this season. We have a paradox, our demand is growing, and we're fighting to realise the service,'' complained Hauptfeld.

Fain explained how company owners are trying to manage in all sorts of ways.

"According to the data from the Tax Administration and the Central Bureau of Statistics, the average decline in the activities of Croatian tourist agencies in 2020 was continuously above 85 percent. Most agencies in the market have been around for a long time, they're family businesses and they've invested a lot in their business and don't want to lose it.

That's why they're using their own reserves, private loans are being taken out en masse, property is being sold, a lot is being taken on in terms of debt until some income starts to be generated from the end of June or the beginning of July. But it's all short-lived, and that's why I hope that the announced help from the Government will come soon,'' said Fain.

It isn't known how many Croatian tourist agencies closed their doors due to the pandemic. Such an outcome awaits those who entered the murky waters of the ongoing pandemic on shaky feet, says Boris Zgomba, the president of Uniline.

"Our agency was lucky in that we welcomed the pandemic in a healthy state, but if someone had told me twp years ago that I'd be working like this for more than a year and survive without much damage, I wouldn't have believed them.

Certainly, this was helped by the Government's fast-paced job preservation measures which helped keep to the sector from losing the manpower it needs to continue doing business once business starts up again. Now things have finally started moving again, but we're in trouble because some will have workers, but they won't have a company that will not survive, and that's why assistance measures to prepare for the season are crucial,'' said Zgomba.

Unlike Croatian tourist agencies, agencies in the surrounding countries, primarily in Slovenia, have previously received assistance from the budget for liquidity and cost recovery, and are currently in an advantage over their Croatian counterparts.

"We have nothing against the open market, but we believe that everyone should have equal preconditions for work, which isn't the case at the moment. That's why it could happen that the work of Croatian tourist agencies is done by Slovenian agencies, because they're in a better starting position than we are.

It should also be borne in mind that the amendments to the Law on the Provision of Services in Tourism will soon enter into force,'' noted Zgomba.

Make sure to follow to follow our dedicated travel section for more.

As Poslovni Dnevnik writes on the 8th of September, 2020, so far, 534 companies registered in Croatia with a total of 24,192 employees have applied for Croatian Government subsidies to cover their employees as they make the increasingly popular decision to shorten their working week.

Croatian Government subsidies will ensure the payment of all of them up with up to 2,000 kuna per employee, and the measure will be applied by the end of the year. Companies and enterprises from particularly vulnerable industries who have experienced a pandemic-induced drop in their income of more than 60 percent when compared to last year will be able to count on 4,000 kuna in state aid for their employee salaries by the end of this year, Prime Minister Andrej Plenkovic announced last week.

The move was formally adopted on Monday at a session of the Administrative Council of the Employment Service, according to a report from Vecernji list.

The extension of Croatian Government subsidies in the full amount of 4,000 kuna especially applies to companies operating in the sectors of passenger transport, catering/hospitality, tour operators and enterprises related to recreation, culture, business and sport events, as well as enterprises and activities that won't be able to operate due to possible decisions of the National Civil Protection Headquarters in regard to work bans.

The Croatian Government subsidies also include a write-off of all related contributions. It is estimated that the extension of these state grants will cover approximately 70,000 employees in total, for which the state will additionally provide around 800 million kuna. In total, support for employment could reach ten billion kuna this year, most of it having been financed from the state budget, but the government has made sure to assure that part of the funds will be compensated from various European Union sources.

''I see the extension of these measures as a purchase of time over the next few months, to see what's going to happen and think about where it is wisest to invest. If this situation continues, there will be a greater need to invest in people and new technologies,'' stated Danijel Nestic, an analyst from the Zagreb Institute of Economics.

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