ZAGREB, July 30, 2020 - The Croatian government on Thursday adopted a draft agreement between the European Commission and EU member states on the purchase of a vaccine against the COVID-19 disease.

Health Minister Vili Beros was given the authority to sign a letter notifying the European Commission about the completion of the necessary procedures in Croatia to sign the agreement.

Beros said that currently there was no vaccine against the coronavirus or specific treatment for this disease.

"Based on the proposed agreement, the European Commission is authorised by the participating member states to sign advance purchase agreements with vaccine producers to buy a vaccine and curb this disease at the EU level," the health minister said.

By acceding to this agreement, Croatia confirms its intention to buy a vaccine and becomes entitled to purchase a certain amount of vaccine. This right is exercised by entering into separate agreements with vaccine producers to buy a vaccine at a price negotiated by the European Commission on behalf of the member states.

"The agreement represents the basis for the European Commission to enter into advance agreements with vaccine producers, and each member state decides on its own on entering into a separate purchase agreement with a vaccine producer," Beros said.

The government also adopted a decree to create the Office of the Deputy Prime Minister without a portfolio, which will be headed by Deputy Prime Minister Boris Milosevic.

ZAGREB, July 29, 2020 - Prime Minister Andrej Plenkovic has never tweeted something against President Zoran Milanovic, the government said on Wednesday, adding that after checking Plenkovic's twitter account they concluded that Milanovic was either lying or hallucinating.

"Given the numerous media queries about which late-night tweet the president meant, we checked the prime minister's tweets in the past period to check if anything was tweeted late at night that was aimed against the president. The only thing we can conclude is that the president is either lying or hallucinating," the government said.

He is certainly very bored so he is making things up, it added.

Milanovic today dismissed Plenkovic's claims that he was bored, saying this was said on Plenkovic's Twitter account.

Milanovic said he did not think that Plenkovic wrote that himself but someone in his office late at night. "I can't believe that Plenkovic would write such nonsense," he said, without specifying which tweet he meant.

Plenkovic told reporters today it seemed to him the president "is a little bored." He was commenting on Milanovic's repeated claims that the national COVID response team was unconstitutional, that parliament was above it and that the "team is actually nothing."

ZAGREB, July 27, 2020 - The government has responded to President Zoran Milanovic's statement that the national coronavirus crisis response team is a "paraconstitutional" body, saying that the decisions by the team are not constitutionally questionable and that it is odd that he wants the new virus to be accepted like tooth decay.

"It is odd that the President of the Republic wants us to accept the coronavirus like tooth decay while at the same time calling for the declaration of a state of emergency, i.e. activation of Article 17 of the Constitution. The decisions made by the national coronavirus crisis response team are not constitutionally questionable or political. They are made based on guidance from medical professionals and their primary aim is to protect the lives and health of our citizens," the N1 television channel published the government's response on Sunday evening after President Zoran Milanovic's appearance in its current affairs programme earlier in the day.

The government recalled that the legal basis for the crisis response team's decisions was the law on the protection of the population from contagious diseases, the civil protection law and Article 16 of the Constitution.

The restrictions imposed to contain the spread of the virus and protect human life were proportionate and well balanced, which is also in accordance with the Constitution, the government said.

"The team will continue to do their work responsibly and efficiently and prepare new measures to contain the spread of the infection, while further monitoring the development of the epidemiological situation," the government said in its response.

N1 said that the Constitutional Court declined to comment on Milanovic's statement.

In the interview, Milanovic said that war was not the only state of emergency. "Is the situation we are now living in normal and usual? Of course, it is not. War is not the only state of emergency. This is a natural and economic disaster and it is on this ground that we are having our rights restricted. At first, they are absolute, but you cannot live in a community where your rights are absolute and your obligations non-existent," the president said.

He also commented on the role of the national coronavirus crisis response team. "It is not normal that a group of people who have not been elected by the people should decide how many people are allowed to attend a wedding celebration. I am in favour of taking an initial decision by a two-thirds majority. The government needs a power of attorney for how many people can attend a wedding celebration and I would give it to it if I could."

ZAGREB, July 24, 2020 - The government on Friday sent to parliament for ratification three loan agreements with international financial institutions worth €660 million to respond to the crisis caused by the COVID-19 pandemic, for post-earthquake reconstruction and for strengthening healthcare.

One agreement refers to a €275.9 million World Bank loan for crisis response and recovery support and another for a €183.9 million World Bank loan for post-earthquake reconstruction in the Zagreb area and for strengthening public health preparedness.

In early June, the government endorsed reports on negotiations on the two agreements, which were approved by the World Bank Board of Executive Directors at the end of June and signed at the beginning of this month.

Finance Minister Zdravko Maric said at a cabinet meeting that the repayment period for both loans was 14 and a half years with five years' grace and a variable interest rate tied to six-month Euribor plus 0.75% of the fixed interest margin.

The €183.9 million loan envisages the establishment of institutional and coordination capacities for planning and implementing the reconstruction of public buildings damaged in the earthquake, facilitating the restoration of key healthcare and education services after the earthquake, and improving the public health sector's preparedness for communicable diseases in the future, Maric said.

The government also sent to parliament for ratification a €200 million loan agreement from the Council of Europe Development Bank.

Maric said the repayment period was 12 years with three years' grace and a fixed interest of 0.24% or a variable interest rate based on six-month Euribor plus 0.36% of the fixed interest margin.

He said the loan would be used to reduce the contagion and effects of the pandemic and ensure the availability of medical services and supplies as well as drugs and protective equipment, among other things.

Croatian companies could receive €800m from Pan-European Guarantee Fund

The government also decided to initiate the signing of a contribution agreement with the European Investment Bank on the Pan-European Guarantee Fund in response to COVID-19.

The fund is part of the €540 million packages agreed by the European Council to help businesses, together with the SURE programme to help workers and the European Stabilisation Mechanism to help states, said Maric.

The aim of the fund is to ensure liquidity so that eligible businesses, notably SMEs, can deal with the crisis and continue to develop in the medium and long terms.

The target value of the fund is €25 billion and it is formed on the basis of member states' guarantees, while short term liquidity is ensured by the European Investment Bank. These guarantees cover losses and operating expenses, said Maric.

It is estimated that the fund will mobilise €200 billion in additional investment.

Maric said Croatia's contribution to the fund would be €106.7 million and that Croatian companies, notably SMEs, could receive €800 million from it, depending on the absorption by other member sates.

"Participation in the fund will give the economy, notably small and medium-sized enterprises which have been significantly affected by the crisis, access to additional capacities of the EIB group as part of emergency financial aid in the pandemic."

ZAGREB, July 24, 2020 - The government on Friday sent to parliament a bill on the reconstruction of the Zagreb area after the March earthquake under which, as Prime Minister Andrej Plenkovic said, the government will cover 60% of the costs and local governments and owners 20% each.

A reconstruction fund will be established to oversee the works, raise money for the reconstruction and serve as a one stop shop for all citizens affected by the quake, he added.

The prime minister recalled that HRK 100 billion had already been ensured for emergency repairs by revising the 2020 budget and from the Environmental Protection Fund, that HRK 41 million had been allocated from the Condensing Boiler Fund, and that the government had paid for the accommodation of people who lost their homes in the quake in a Zagreb student dorm.

A US$ 200 million loan has been agreed with the World Bank, talks are under way on a Council of Europe Development Bank loan, and an application has been submitted to the European Solidarity Fund, said Plenkovic.

Earthquake damage estimated at €11.5 billion

"The earthquake damage is estimated at €11.5 billion, the number of damaged buildings is 25,000, the extent of the earthquake was big, ten seconds of earthquake will no doubt bring ten years of work," he added.

The law is expected to ensure the principles of organised reconstruction under professional regulations so as to preserve Zagreb's historical and artistic value. All interested stakeholders, builders, architects, art historians, conservationists and others were consulted in drafting the bill, which was also put to public consultation, resulting in 400 comments, some of which were incorporated into the bill.

Plenkovic said he wanted the widest possible consensus on the law and for it to be clear, transparent and implementable.

Construction and Physical Planning Minister Darko Horvat said the reconstruction would be a big financial challenge and that the bulk of the expenses would be covered by the state. A detailed programme of measures will be made for the pace of reconstruction, depending on financing.

As for public buildings, he said their reconstruction would be fully covered by the founders.

Culture Minister Nina Obuljen Korzinek said the reconstruction would envisage state-of-the-art technology to increase the value of Zagreb's buildings and preserve the cultural and historical aspects.

Finance Minister Zdravko Maric said he hoped the reconstruction would contribute to economic activity in Croatia.

Parliament will debate the bill next week.

ZAGREB, July 23, 2020 - Prime Minister-designate Andrej Plenkovic said on Thursday that he was aware that expectations of reform were now much higher than before and that his new government would meet them.

"There will be huge challenges to public health, the economy and finance. Today we have more political experience and that will certainly make our work easier. The government is homogenous, the parliamentary majority is compact, and I count on 76 hands," Plenkovic told reporters outside parliament before presenting his new cabinet to lawmakers.

Asked if he believed his new team would endure the four-year term, Plenkovic said: "I don't know, it's hard for me to say. You start out with this ambition, but in the present time of crisis, challenges and unpredictable circumstances it is difficult to say. I would like it to be that way. We endured this past term, maybe not in the original composition, but we did a good and useful job for Croatia and the citizens gave us their trust for the next term."

Asked to comment on claims by some analysts that the EU funding would be used for some particular interests, Plenkovic said: "22 billion is 22 billion. We have a great responsibility to use this money well and I think it is good to have such a lever after a GDP fall of 10 percent as a result of the crisis (caused by the coronavirus pandemic). It would be much more difficult without it."

ZAGREB, July 23, 2020 - Creating 100,000 jobs, increasing the average and minimum wages and further tax cuts are some of the goals of the programme of the new Croatian government that will be presented in parliament on Thursday.

The programme covers five main areas: social security, a prosperous future, economic sovereignty, stronger statehood and global recognisability.

The new government of Prime Minister Andrej Plenkovic aims to spend HRK 10 billion in creating conditions for opening 100,000 jobs and ensure an average monthly salary of HRK 7,600 and a minimum wage of at least HRK 4,250 by the end of the term.

It plans to spend HRK 3 billion in modernising the healthcare system, build a national children's hospital in Zagreb, revitalise the Institute of Immunology, and increase pensions by at least 10%.

Further tax cuts are also planned. The VAT rate on all food will be reduced from 25% to 13%, and income and profit taxes will also be reduced.

The education reform and digitalisation will continue. HRK 5 billion will be invested in modernising the education system and providing 50,000 scholarships.

Another HRK 5 billion will be invested in innovation, entrepreneurship and new products for the purposes of digital transformation of industry and increasing exports. Investment in research and development will be increased from the present 1% to 2.5% of GDP, and creative industries will be developed.

To promote demographic revitalisation and improve the status of families, the government will subsidise 20,000 housing loans for young families, provide a parental allowance in the amount of a full monthly salary, extend opening hours for another 200 kindergartens and regulate Sunday work.

The coronavirus pandemic and disruptions in the supply chain in the globalised economy have confirmed the need for self-sufficiency in food and energy production in order to achieve economic sovereignty.

To that effect, the government plans to increase agricultural production by 30% to HRK 22 billion, build 20 regional fruit and vegetable centres, double the area of land under irrigation, and adopt a new strategy for development of sustainable tourism.

With the number of cabinet ministries already reduced, the government aims to halve the number of local government officials and ensure the functional linking of municipalities. It will continue the judicial reform, adopt a new enforcement law and continue the uncompromising fight against corruption.

The government will insist on balanced regional development, planning to invest HRK 30 billion for that purpose.

In cooperation with the City of Zagreb and adjacent counties, the government will continue to address the consequences of the March 22 earthquake and adopt an effective legislative framework for reconstruction with the aid of domestic and international financing sources.

The government pledged to continue working on the political positioning and economic strengthening of Croatia. It will promote the national interests, protect the dignity of the Homeland War and veterans, and strengthen the Croatian military and police.

The achievement of the strategic goals - accession to the Schengen area, euro area and OECD - will make the national sovereignty and influence of Croatia in Europe and the world stronger, the government said in its programme, pledging further support for the Croatian diaspora.

The government said it was aware of the challenges facing it over the next four years, including the economic recovery from the consequences of the coronavirus pandemic, the post-earthquake reconstruction of Zagreb and its environs, and the transformation of the national economy.

The government's priority will be to use the €22 billion from the new EU budget and the New Generation EU instrument for a speedy recovery of the economy and for investment in the priority areas defined by its programme.

(€1 = HRK 7.527377)

ZAGREB, July 13, 2020 - Prime Minister and Croatian Democratic Union leader (HDZ) Andrej Plenkovic said on Monday that the new government would be somewhat smaller than the previous one and its members will be known on Thursday.

"The government will be somewhat smaller than it was. It will be functional, some of the current members in government will remain, others will be in the Sabor. Some new people will join," Plenkovic said ahead of the meeting of the party's presidency and national council after official complete results of the July 5 parliamentary election that HDZ won were made public today.

He confirmed that the environment and energy sector may be merged with some other ministry. He underlined that talks are still underway in that regard however the issue of climate change will not be neglected and will become the number one issue in the context of economic recovery.

"There will be fewer ministries but that does not mean that public servants will lose their jobs. This is a different type of message of a fewer number of ministries and fewer members of the government," said Plenkovic.

He added that he had expected the Independent Democratic Serb Party (SDSS) to nominate Boris Milosevic as the deputy prime minister for social activities and human rights.

 "That proposal was agreed to with me and I expected it to be Milosevic. We know each other. He is a lawyer and I think that he can contribute to this new position, which we discussed last week," the prime minister added.

ZAGREB, June 25, 2020 - The number of coronavirus cases in Croatia is on the rise because members of the national crisis response team and the prime minister set a bad example and because recommendations from the Public Health Institute (HZJZ) are being ignored, Ivan Bekavac of the Bridge party said on Thursday.

Bekavac was presenting the party's healthcare programme for the forthcoming parliamentary election.

He wondered how it was possible to organise a concert for 600 people in Knin, where the singer was infected with the coronavirus, without the HZJZ measures being observed.

He said that yesterday's decision to impose a 14-day quarantine for people coming to Croatia from Bosnia and Herzegovina, Serbia, Kosovo, and North Macedonia was not based on the medical profession and law but was a political decision aimed at shifting the public focus from the responsibility of the ruling parties to citizens of the neighbouring countries.

"In the context of the ongoing election campaign, this suits the HDZ," Bekavac said. "The rise in the number of infections shows that we should focus more on preventing a new wave of the coronavirus and less on political decisions at the expense of public health," he added.

Bekavac said that the Croatian hospital system needed reorganising and restructuring, calling for an end to the monopoly of the Croatian Health Insurance Agency (HZZ). He said that Bridge advocated market-based health insurance because citizens have the right to choose a healthcare scheme that suits them best and be responsible for their own health.

ZAGREB, June 25, 2020 - The Croatian government on Thursday announced the possibility of introducing shorter working hours as a new measure designed to help save jobs, to be introduced in the second half of the year for businesses with more than ten employees.

Labour and Pension System Minister Josip Aladrovic said that the government was working on defining, in cooperation with trade unions and employers, criteria for job keeping aid to be granted as part of a scheme envisaging shorter working hours.

The measure would be in force from June 1 to December 31.

Under the measure, employers who need to introduce shorter working hours due to a decline in business activities would be entitled to aid for the payment of a part of their workers' wages.

The measure is intended for all sectors and for all businesses with more than 10 employees.

It will be financed by an EU programme.

The measure is expected to cost slightly less than three billion kunas by the end of the year, said Aladrovic.