ZAGREB, June 25, 2020 - Prime Minister Andrej Plenkovic said at a government session on Thursday that the government's measures designed to help businesses hit by the coronavirus crisis had helped save 600,000 jobs and 103,000 businesses.

Plenkovic recalled that the measures included payments to employers for workers' wages, the write-off of direct taxes and contributions and the procurement of medical equipment for the health system.

Plenkovic said the government had ensured the necessary aid also owing to Croatia's reputation on international financial markets.

"We have secured financing and liquidity, payment of wages and pensions and the normal functioning of the state," he said.

He said that aid worth a total of HRK5.3 billion had been secured for employers in March, April and June, with employers in Zagreb alone receiving HRK 1.6 billion in government aid.

He noted that data from the Croatian Employment Service showed that in terms of employment, Croatia was at the pre-crisis level and that there were 17,500 more unemployed persons because they had not been hired for seasonal jobs.

He said the government would help the business sector also by shortening working hours, which would help them retain workers.

In the EU's next seven-year budget Croatia will have €22 billion at its disposal as well as more than ten million euros from the EU's programme for economic recovery, of which two-thirds are grants, said the PM.

ZAGREB, June 18, 2020 - The Croatian government on Thursday amended the HAMAG-BICRO agency's schemes for loans for working capital for businesses affected by the coronavirus crisis and ESIF guarantees, with Prime Minister Andrej Plenkovic saying that this would enable the granting of further loans to entrepreneurs.

Plenkovic told a government session that businesses had made good use of loans intended to help businesses affected by the coronavirus crisis and that so far 5,128 requests worth HRK 343 million had been submitted by 900 businesses.

This is an important government measure that makes it possible to keep jobs, said Plenkovic, noting that the amendment of the schemes would help provide further loans for Croatian entrepreneurs.

Economy Minister Darko Horvat recalled that the government in March adopted changes to HAMAG-BICRO's schemes "ESIF micro and small loans" and "ESIF guarantees", while on April 2 a decision was made to adopt the scheme "COVID-19 working capital loans."

In order to help member-countries make the most of the flexibility envisaged by rules on state support for the business sector affected by the COVID-19 pandemic, the European Commission adopted a document called the Temporary Framework, said Horvat.

Based on that document, HAMAG-BICRO defined a support scheme which the EC approved on May 12 and which envisages loans in the total amount of HRK 350 million as well as support in the form of guarantees worth HRK 420 million, to be issued until 31 December 2020, said Horvat.

Specifically, EU member-states are enabled to grant state support to micro, small and medium-sized businesses for urgent liquidity needs caused by the COVID-19 pandemic, in the amount of up to €800,000 for COVID-19 working capital loans, said the minister.

Horvat also said that up to one million euros would be provided for ESIF guarantees, as would a combination of measures from the Temporary Framework with support of small value, for urgent liquidity needs.

ZAGREB, June 18, 2020 - The government on Thursday adopted a conclusion that expresses its readiness to join in the process of issuing state guarantees the Brodotrogir Cruise, Uljanik Brodogradnja 1856 and MKM Yachts shipyards.

"The signal we are sending today is our determination for Croatia's shipbuilding to continue functioning (...) and that we wish to continue supporting shipbuilding on healthy foundations," Prime Minister Andrej Plenkovic said.

Economy Minister Darko Horvat recalled that the ministry had received a request from Brodotrogir Cruise for a state guarantee to ensure advance payments for two passenger polar cruise ships for two American clients.

The total value of each ship is €39 million, and the clients will make an advance payment of 80% or €31.2 million for each ship, on the condition that the shipyard obtains a bank guarantee for the buyer.

"The shipyard has requested state guarantees in the amount of €24.96 million for each ship, which is 80% of the total advance payment and 64% of the sales price," Horvat explained.

The ministry also received a request from the Uljanik dock for a loan in the amount of €4.33 million to launch production. The loan would be secured with a state guarantee earmarked exclusively to launch production at the newly-founded company at the dock.

The Rijeka-based MKM Yachts dock too submitted a request for a state guarantee for a loan of just over €100 million for the construction of a ship for a client from Malta. The guarantee would cover 80% of the loan or €80.13 million.

These guarantees will be activated in phases so that the amount the government will guarantee cannot exceed 64% of exposure by the end of 2021, after which the state's exposure should decrease to a maximum of 48%, Horvat explained.

"With this conclusion, the government provides full support to the shipbuilding industry in Croatia with the aim of continuing production and retaining Croatia's reputation on the shipbuilding market. This conclusion obliges the Ministry of Economy, Entrepreneurship and Craftsto launch proceedings, in cooperation with the Finance Ministry, to issue the requested state guarantees," Horvat concluded.

 ZAGREB, June 12, 2020 - Prime Minister Andrej Plenkovic on Friday praised his government for all it had done to contain the spread of the coronavirus pandemic, stressing that it had stood by the workers and employers and shown "the strength of the state" during the crisis.

"In this corona crisis you could see how our government managed to quickly and effectively prevent this epidemic from spreading in Croatia while at the same time standing, like no government before it, by the workers, employers and all those who would probably have ended up on the dole had it not been for our measures, and the employers would hardly have overcome the crisis," the prime minister said at a gathering of members of the Vukovar branch of his Croatian Democratic Union (HDZ) party.

He said that the government had shown "the strength of the state" during the crisis. "We showed how to protect and secure public health and how to preserve jobs," he said, adding that all this was possible because over the past four years the government had been working on promoting healthy economic growth, which has been recognised outside Croatia as well.

"Our investment credit rating has been maintained. Yesterday's €2 billion bond issue, when investors were interested in nearly €9 billion at much more favour interest rates and when we managed to save HRK 360 million annually compared to the same such instrument from 2010, means that there is trust in this government," Plenkovic said.

ZAGREB, June 12, 2020 - Prime Minister Andrej Plenkovic formally opened the Office of the Foundation of the Sarajevo Archdiocese in the eastern Croatian town of Vukovar on Friday, saying that Croatia's relationship with Bosnia and Herzegovina was very important to his government.

"We have considerably increased funds for specific projects including education, healthcare, culture, and the economy. We have increased trade and intensified our relationship with Bosnia and Herzegovina by opening two consulates, offices of the Croatian Chamber of Commerce, a broadcasting organization, and have improved transport connectivity," Plenkovic told the press after the opening ceremony.

"All this helps strengthen the status of the Croats as an equal constituent people in Bosnia and Herzegovina," he stressed.

The Archbishop of Sarajevo and president of the foundation's board of directors, Cardinal Vinko Puljic, said: "We have opened the foundation here to make it easier for benefactors to invest funds that can be controlled." He added that the foundation would work transparently and that it would be clear at all times what the money was being invested in.

"The foundation will be an encouragement to our survival and our future in Bosnia and Herzegovina," the cardinal said.

The foundation was established in Vukovar in February as a not-for-profit humanitarian organization to carry out projects in Croatia and the Sarajevo Archdiocese.

As Marija Brnic/Poslovni Dnevnik writes on the 20th of July, 2019, after Croatian Parliament ratifies the Croatian Government's cabinet reshuffle, Andrej Plenković's "ship" will probably carry in sailing just as it has until now right up to the end of his mandate and an unfortunate situation such as the country assuming the EU presidency under political instability, will likely be avoided. That all looks great on paper, but it doesn't change anything at all as far as the state of the Croatian economy is concerned.

PM Plenkovićs ''new people" are Marija Vučković, Vesna Bedeković, Ivan Malenica, Gordan Grlić Radman, Josip Aladrović and Mario Banožić.

When it comes to what might be positive for Croatian business, judging by the first estimates, would be an attempt by this group of new Croatian ministers to distinguish Croatia's infamous negative business and investment climate and the absolutely tragic public perception of the state management system.

"Political stability is a prerequisite for economic growth, so it's most important that after the reconstruction of the government, that the continuity of the economic policy that goes in the direction of tax breaks for entrepreneurs remains as it is. If the staff changes in the government contribute to improving the business climate and making life easier for businessmen, then we'll support it,'' stated the Croatian Chamber of Economy's Luka Burilović.

Among the first comments on the changes in the government were made by Gordana Deranja, the president of the Croatian Employers' Association (HUP), she wants to sit tight and wait for another few days, when the first, concrete steps of Croatia's brand new ministers can be seen.

"It is the right of the prime minister to appoint their people, and I can only say that it's important for them to be aware of the situation and that there needs to be continuity in the implementation of reforms," ​​claimed Deranja.

Businessmen haven't had too much of an issue with the fact that most of Plenković's newcomers didn't leave much of an impression at all, and the public didn't hear their goals - yet. Partly because, according to all the information available, they had been selected at the last minute, and partly because the prime ministers' approval for all of the important decisions in the work of their respective ministries was an absolute must.

The ''new'' Tomislav Tolušić (former state secretary at the Ministry of Agriculture) Marija Vučković, has made it clear that no major changes have been made in her line of work, and that the continuity of the policy led by her boss will be a must. Eventually, as she herself says, it will likely be upgraded, and that is precisely what Mladen Jakopović, the president of the Croatian Chamber of Agriculture, expects of her.

"She is a very meticulous person, who counts all the decimals in their exact details and holds all of the rules and regulations close to her, we'll all be satisfied," stated Jakopović, adding that an important phase of negotiations is now underway. Since Vučković was Tolušić's most trusted person, no major personnel changes are expected within that ministry.

Although the former minister of labour, Marko Pavić, became somewhat unpopular because of his lobbying against the referendum initiative "67 is too much" (a retirement age issue) and Josip Aladrović is a supporter of pension reform, he has not yet wanted to be open about his position, but has asked to wait for the votes to be counted and verified in order to ''do what will be essential for pension reform in future''.

Petar Lovrić, president of the Association of Independent Businessmen and Employers, announced that he will immediately request a meeting with the new minister of labour to discuss not only the bad management of the pension system, but also the need for relief for employers when it comes to the burden of sickness, because it is absurd that employers need to pay for health insurance and sick pay.

The former minister had no desire whatsoever to listen to that issue. Lovrić believes that a short-term solution to the problem would be to put the current finance minister in the position of vice president for the economy because he highly values Zdravko Marić, but in the long run, he says this isn't the best solution, because the finance minister is primarily concerned with the budget and should therefore strive for the stronger authority of the economy minister.

Mario Banožić didn't really make how he intends the state property ministry clear in his recent statement. When he sees the analysis, he says, then he'll know more. Mladen Pejnović considers that the ministry's focus on property had been wrong up until now, and that the enterprises were unfairly neglected.

Follow our dedicated politics and business pages for much more.

As Morski writes on the 21st of May, 2019, the new Orbiter 3 is MORH's new means for the country's Homeland Security system, and will be used for by the Ministry of Defence of the Republic of Croatia and the Ministry of Agriculture of the Republic of Croatia.

MORH states that their aircraft will be used in early fire detection, in the control of waterways and roads, support in crisis situations, and for support in the control of the country's borders.

The Orbiter 3 drone weighs 30 kilograms, its flight range is 150 km and it can be in the air for as long as seven hours, and when descending, a parachute is released. Its wingspan is 4.4 metres wide and it can cruise at 130 kilometres per hour.

The unmanned aircraft was first introduced to the public during the Paris Air Show back in 2005. It is made entirely of carbon composite and is powered by an electric motor, in addition it is equipped with an optical and an infrared camera, and data link and navigation systems (GPS and INS).

What is also interesting to note is the fact that the Serbian army acquired ten such Orbiters eleven years ago, In addition to Serbia and Israel, these Orbiter drones are used by Azerbaijan, Finland, Ireland, Mexico, Peru, Poland and Uganda.

Although the Orbiter 3 prototype was first introduced back in 2011, there have been improved versions of its two predecessors (in addition to the camera, a laser sight has also been added), MORH did not publicly disclose the characteristics of the camera itself on this particular version. The manufacturer has rather vaguely written that it boasts a "high definition camera", but whether or not that is in reference to 2019's standards, we don't know.

These drones should also control fishing in the Adriatic sea, and a contract worth 4.88 million euros with the Israeli company Aeronautics was signed by the Minister of Agriculture Tomislav Tolušić back in May 2018.

View MORH's new drone footage here:

Make sure to follow our dedicated lifestyle page for much more.

If the China Shipbuilding Industry Corporation (CSIC) gives up, it will be difficult to find another candidate for the ailing Croatian shipyards Uljanik (Pula) and 3 Maj (Rijeka) which is in the shipbuilding industry and is also a strong and respected player. Could a Chinese investment be on the cards?

As Poslovni Dnevnik/Suzana Varosanec writes on the 29th of April, 2019, after yesterday's meeting with Prime Minister Andrey Plenkovic and his government ministers, Hu Wenming, Chairman of the Board of China's largest shipbuilding company China Shipbuilding Industry Corporation (CSIC) confirmed that they are indeed moving towards serious consideration regarding the enfeebled Uljanik and 3 Maj shipyards, which have undergone months of turmoil.

''The prime minister gave us a very serious and detailed presentation of the whole situation,'' Wenming said, adding that they saw that these two shipyards were a very important topic for the Croatian public. "Not only did we bring people from our company - they're in charge of planning, we've already called on lawyers and investment banks, so we will outline what their views on the matter are after visiting the shipyards," Wenming stated.

With that, a key ''tour'' begins, because if CSIC ends up actually not being interested in putting its money into the situation, it will be a hugely difficult task to find another candidate in shipbuilding, which is a big player and has an interest in joining the European shipbuilding industry. Otherwise, this would be the first case of a Chinese takeover of a foreign shipbuilding company, so it is speculated that extensive calculations are being made, and of course whether they even want to have their first European shipyard is being considered. The CSIC is looking at the situation deeply and from all possible angles.

This event all began with the recent announcement of the arrival of the CSIC in Croatia with the aim of visiting the troubled shipyards in Pula and Rijeka. As was then announced, the CSIC chairman contacted Chinese Prime Minister Li Keqiang during his stay in the Republic of Croatia where he attended the summit "16 + 1" and after talking with the Croatian PM about the dire state of Croatian shipbuilding.

As things currently stand, the general belief is that the Chinese decision won't take long to come - it will be a simple and express "no" or "yes", while the third option, more specifically an unconditional "yes", will likely need to be waited for a little longer.

What the outcome of the potential Chinese presence in the Croatian shipbuilding industry is anyone's guess, and while some remain very suspicious of Chinese motives in Croatia in general, despite them already working on the long-awaited Pelješac bridge down in southern Dalmatia, whatever comes of their potential entry has got to be better than the current situation, especially for Uljanik.

Make sure to follow our dedicated business page for more information on Chinese-Croatian business relations, Chinese investments and projects in Croatia, doing business and investing in Croatia and much more.

Click here for the original article by Suzana Varosanec for Poslovni Dnevnik

As Mirela Lilek/Novac writes on the 27th of April, 2019, Croatia's situation still isn't good: the country is continuing to ''produce'' graduates with the third lowest employment rate in the whole of the European Union, and as a result, taxpayers pay more and more money for them. According to new data from Brussels, based on a comparative survey of youth employment among Croats with diplomas earned in the last three years, a third of highly educated people aged between 20 to 34 in Croatia have no jobs. Only Italy and Greece are worse.

Of the 28 countries EU member states, Croatia ranked 26th with a 66 percent employability rate. Four positions above Croatia lies Romania, Bulgaria is six places above, and Slovakia is nine places above. Croatia's neighbour to the north, Slovenia, is eleven places above Croatia, Poland is thirteen places above (impressively right behind Ireland and Denmark), and the Czech Republic, with an 89.9 percent employability rate which has impressed the European Commission's experts - has risen to an enviable fourth place.

Malta is in first place in Europe as an employer of its graduates with diplomas, the employment rate of Maltese students stands at a very impressive 94.5 percent, even better than Germany, which boasts a rate of 90.9 percent, followed then by the Netherlands, the Czech Republic, and then Austria. The EU average is on the rise, back in 2014 it stood at 76 percent and in 2018 it stood at 80.2 percent. Unfortunately, the Croats have been close to the bottom for years, more specifically for fifteen years, as it has a below-average rate of employability in relation to the EU. Of course, rather than attempt to fix the problem directly, the Croats are doing what the Croats always do - continuing to debate and argue over who is (more) to blame for such embarrassing conditions.

Economists see the issue as being that the Croats aren't adapting easily to the market, and that Croatia also has an old education system. At Croatia's universities, they argue that the key issue isn't Croatia's higher education institutions, but an underdeveloped labour market, low personal income, and demotivating working conditions. Experts from the European Commission have given a relatively simple answer: Investing in education will benefit everyone in Europe.

Let's see how they explain their theories in some of the country's universities, starting with the largest "producers" of graduates in the entire country, the Faculty of Philosophy and Economics in Zagreb.

''We're aware of the importance of linking study programs and labour market needs. In this regard, the Faculty of Economics makes an effort to make it easier for students to access the labour market by establishing multilateral cooperation with companies and respectable institutions that enable students to perform high-quality professional practices,'' stated Sanja Sever Mališ, who deals with strategic partnerships and projects at the Faculty of Economics in Zagreb. The basic message from this particular Zagreb university is that "they connect students and employers so their best students can find work even during their studies." Therefore, there is no concern for them.

On the other hand, Vesna Vlahović-Štetić, Dean of the Faculty of Philosophy, admits that Croatia's humiliating placement at the bottom of the employability scale of graduates is still something to be very concerned about and therefore the causes of that need to be looked at.

''I assume that part of the problem lies in insufficient development and the ability of the economy and the public sector to absorb newly graduated students. On the other hand, the question is how many colleges and higher education institutions meet the needs of society with their respective programs. At the state level, in some professions there's hyper-production, and in others there is a lack of experts. Additionally, study programs should be regularly updated and developed to meet not only society's needs but also predict what competences professionals will need in the future,'' the dean says.

Data obtained through the HKO project of the Faculty of Philosophy shows that the employability of their students in the year after graduation is 75 percent. They believe this is the result of "the excellent professional and generic competences of their graduates".

"We're convinced at the Faculty of Philosophy that the study programs need to be further improved, so we have just started the study reform process and I'm sure the future employability of our students will be even better," says the university's dean.

The rector of the University of Rijeka, Snježana Prijić Samaržija, doesn't want to run away from the fact that Croatia's universities do hold a share of the responsibility for this issue but, again, she's convinced that Croatia's higher education institutions are't the key cause of the problem, but the underdeveloped labour market definitely is.

Rijeka University has eleven faculties and four departments. On their official page, they point out that they are a modern European university and a centre of excellence within the region and beyond, and that they are responsible for the social and economic development of the community. Samardžija claims that she doesn't want to relate the worrying data on the high rate of unemployed with higher education, but that "it should be borne in mind that higher education is a better job-finding guarantee, such as landing a permanent position,"

"Of course, it's possible to say that the employment rate would be higher if universities, by some automation, increased their quotas for the job-type deficit and reduced those profiles for which the employment bureaus take care of. In that sense, people often say Croatia's institutions and their enrollment policies aren't adapted to the labour market. However, the situation isn't quite that simple.

For example, the market seeks shipbuilding engineers, we have shipbuilding studies and a corresponding quota at the University of Rijeka, but there's a fall in interest for those studies. We can understand the students' fears about the situation with Croatia's shipyards, but the fact is that the need for this profession is still growing. Similarly, despite the lack of mathematics and physics teachers and the excellent studies we have, the interest doesn't match the employment opportunities,'' she explained.

The University of Rijeka decided to put seven studies ''into retirement'' this year, and isn't accepting students for them. Those are acting and media, dental hygiene, computer science in combination with professional studies of medical-lab diagnostics, mechanical engineering, shipbuilding, and electrical engineering.

On the other hand, there's a considerable level of interest in studies that don't guarantee quick and permanent employment at all, such as the arts, cultural studies, and psychology.

''Young people choose studies according to their personal interests, not just employment opportunities. They don't necessarily just want a permanent job, many of them are accustomed to gaining work experience in different institutions, at different places of work, and in different countries. More and more, they prefer to individually define the curriculum through courses and practical competences beyond their study program(s), which will make their expertise comparatively more special and desirable. In the midst of a sluggish and non-ethnological labour market, more and more students enjoy prolonged youthful relationships with their parents or rent apartments,'' says Snježana Prijić Samaržija.

"I don't want to run away from the responsibility of the university, we're constantly thinking about the jobs of the future, we're working on increasing the quota for the deficit professions and improving our students' competences to reduce the unemployment rate. However, time is needed to see the results of these measures because the higher education cycle lasts for at least five years. It should be understood that universities can't just simply increase quotas for occupations for which there's a labour market need because new employment is frozen,'' noted the Rector of the University of Rijeka.

As Croatia's paradoxical situation of having no work but plenty of jobseekers, yet plenty of work and no staff, it's hard to predict the outcome of education system reforms as the market and its needs can alter so rapidly. Will Croatian students simply continue to trickle away on the stream of a proverbial leaking tap out into Western Europe, leaving Croatia with the rather unenviable title of a country that educates its citizens for work abroad? It's likely such a scenario will continue at least for the foreseeable future. Whether or not Croatia will manage to make the necessary alterations to fix that aforementioned ''leaky tap'' in time remains to be seen.

Make sure to follow our dedicated lifestyle, politics and business pages for much more.

Click here for the original article by Mirela Lilek for Novac/Jutarnji

As Lea Balenovic/Iva Grubisa/Novac writes on the 17th of April, 2019, Croatian tourism's current business model is unsustainable and has some serious challenges, according to Emanuel Tutek, a partner at the Horwath HTL consulting house, who stated this at the very beginning of a conference on the challenges of the Croatian tourism sector at Edward Bernays High School, the co-organiser of which was Jutarnji list.

Since 19 percent of Croatian GDP comes either directly or indirectly from tourism, the unsustainability of the system is a more serious issue, he added.

''First of all, our tourism is an extremely seasonal sector and as much as 86 percent of all tourism activities in Croatia take place during the summer months. It's also problematic that 96 per cent of these activities are realised on the coast and in Zagreb. In translation, this means that we have plenty of room for progress and the development of our tourist offer across the rest of Croatia, as well as the extension of the season. We are well below the European average. For example, if we compare just the peak of the tourist season, ie July and August, there is 10 to 20 times more of a burden on the area and the residents in Croatia than there is in other European countries. Just remember how some of the destinations and beaches look in July or August,'' warned Tutek.

He also added that Croatia has plenty of room for progress and development in the quality of the accommodation it provides. The Croatian hotels that, as Tutek says, are the pearl of Croatia's hospitality, are very much losing the battle with the hotel industry in the rest of Europe, and the alarm that should be enough to wake the country up is also the fact that the revenue made from tourists' overnight stays in Croatia is less every year.

In addition to this, Croatian tourism is feeling the country's ongoing demographic crisis bite hard, and has a human resource problem as a consequence. This is, as was explained by Tutek, actually a global problem. However, since the international labour market is far more competitive than the Croatian one is, foreign countries are filling their gaps with Croatian workers. Croatia is, unfortunately, at an unimpressive 100 of 138 countries in the world according to the labour market competitiveness index. An even more concerning piece of information shared by the Horwath HTL consultant was that Croatia is the last and second to last in the world on the ladder of attracting and retaining workers.

''We have no solution. The answers to this can't just be some lump sums and other initiatives, we need something more fundamental,'' he warned. One of the negative factors in each case is the uncompetitive average salary. In nearby Austria, for example, in the hotel sector, wages are about 122 percent higher. Still, the hotel industry here in Croatia has experienced a great discrepancy in numbers, and they have therefore begun to increase employee salaries for the last two summer seasons, which has been a fruitful decision. With the rise in salaries and expenses, revenue also grew.

In addition to the inadequate management of human resources, huge problems are also created by the Croatian tax policy. Property tax, Tutek said, practically doesn't exist in Croatia. ''We're the champions of how good private landlords have it. Croatia is a tax oasis,'' he claims.

''We want to be competitive, but there are a number of things that we're not even close to, not even in the wider environment. VAT reduction is certainly important, and there is also the question of consistent policies. It is important for us to have a perception of what will happen in the future at some point, but if the policies constantly change then we can't have a stable business,'' said Sanjin Šolić of the Lošinj hotel group Jadranka.

Davor Lukšić, President of the Lukšić Croatia Group, agreed with him, pointing out that Croatia's 25 percent VAT rate is very high, and even with a rate of 13 percent there would still be room for progress. "We have to remain competitive, especially now when other destinations in the Mediterranean are making a come back," Lukšić added.

But if one was to as Croatian Tourism Minister Gari Cappelli, the problem of the high VAT rate is one of the easiest problems to solve in the Croatian tourism industry. The minister claims that the Croatian Government could lower the VAT rate with one decree, bringing it down to 10 or 13 percent, and such a decision is in the government's plans for the beginning of next year.

''We have a problem with having five-star hotels in two star destinations. First of all, we have to start improving the quality of the destination and spend the whole year measuring what's happening and only after a few years will we see whether both residents and tourists are happy, as well as service providers and the environment. If everyone is more or less happy, then it makes sense to invest in a four or five-star hotel,'' stated Minister Cappelli, adding that in Croatia, it often happens that investments are made in luxurious hotels first, but not in the development of the destination in which it is located.

"Well, we have cases where five-star hotels don't have sewage systems but septic tanks," he said. The minister also referred to the initial lecture by Emanuel Tutek about the key challenges facing Croatian tourism. He agreed that there was always room for progress, but he also pointed out that he was tracking the figures daily and that he couldn't bring himself to agree with all the alarming warnings about the unsustainability of Croatian tourism.

''We're a strange people, two years ago there were no tourists and they wanted to get rid of me, now there are a lot of tourists, and they want to get rid of me again, the projections of what's to come in two years keep coming in, and they're already that I'm shaking in my chair,'' said Cappelli, adding that Croatia is spending what it earns and has therefore finally got an investment rating.

''Now the pressure on public finances is being relieved and the taxes on the economy can be reduced slowly,'' he said.

If the Croatian tourism association is asked for their opinion on the matter, this is last chance saloon for this tax relief to actually become a reality. Namely, it is anticipated that hotels could reduce the volume of their investments by as much as thirty percent over the next three to four years. ''We want to warn the government that it must not let that happen. We have to invest, but we expect that the government to create measures to encourage that and not just put us off,'' said Jadranka's Sanjin Šolić.

Dubrovnik has experienced not only growth in terms of tourism but also the improvement of infrastructure in recent years, Lukšić believes. However, despite the wild popularity of this particular southern Croatian city, it has multiple problems during the winter season.

''In the last two years, we have extended the [tourist] season and the so called ''congress season'' has helped a lot. But we all have to sit around the table and design a strategy for the winter season, which is actually the only problem,'' Lukšić said, arousing a grin from Šolić, who, having being on an island, has much bigger problems.

''It's easy for Dubrovnik. Imagine how it is for us to extend the season! You need to get to the island, the bridge is a problem, the bura is a problem, everything is a problem. We're less competitive than our colleagues on the mainland whichever way you turn. The Chinese, the Koreans, whoever comes to Croatia, lands in Zagreb, goes to Plitvice, Split and Dubrovnik, nobody comes to us,'' complained Sanjin Šolić.

That is why his team sat down together at the table and decided to turn to health tourism for which Lošinj has natural resources, a strategy and a future, said Šolić. Another solution for the development of island tourism is golf. Therefore, a location permit is currently being sought for the construction of a golf course with eighteen holes, with which will be a hotel and villa that will have a total of 800 beds.

''These are the two routes we have on Lošinj. People don't play golf in July and August because its too hot. During November, December, January, February and March, the weather is wonderful and we'll fill our capacities that way,'' he noted.

Emanuel Tutek welcomed this discrepancy in Croatia's tourism development strategies at various locations.

''Not all destinations are suffering the same issues. In Dubrovnik, there is a problem with excessive demand, and the quality of the offer needs to be worked on to reduce the number of tourists. In Istria, the offer should be increased. This has, for example, been done in Maistra. Nobody thought it would pay off to build a five-star hotel in Rovinj, but after the construction of the hotel, the rest of the sector was accompanied by the arrival of tourists and the development of the destination.

However, in addition to the respective issues destinations face in Croatia, the eternal problem facing the entire Croatian tourism sector is labour and wages.

''Salaries are a problem, they're still a base for attracting workers,'' said Tutek, agreeing with the CEO of Jadranka, but as he said, it's difficult to increase salaries because there isn't enough revenue.

"When the minister sorts us out with less taxes, I'll give the rest of it in salaries," he stated.

Make sure to follow our dedicated lifestyle and business pages for much more.

Click here for the original article by Lea Balenovic and Iva Grubisa for Novac/Jutarnji