February the 23rd, 2023 - Villa Dubrovnik has finally settled its land dispute and will go ahead with the creation of new luxury accommodation units in a very desirable part of the city.

As Marija Crnjak/Poslovni Dnevnik writes, Hotel Villa Dubrovnik is embarking on a project to build luxury tourist villas in the Sveti Jakov area of Dubrovnik, on its own land that is free of encumbrances, after the legal entanglements with the Europrojekt company were finally resolved on Monday. So far, there have been no details about the project published, and Villa Dubrovnik promises to present their ideas to the local community in due course.

As stated in the recent announcement on the Zagreb Stock Exchange, based on the settlement between Villa Dubrovnik and Europrojekt, the Commercial Court in Dubrovnik issued a verdict on Monday rejecting the plaintiff Europrojekt's claim and cancelling all encumbrances on the aforementioned land.

Legal entanglements

This is the epilogue of the story about the attempt to sell the aforementioned land to the company Europrojekt, which has allegedly never paid the required amount since signing the purchase agreement with the hotel way back at the beginning of 2021, and just a week ago, it has been said that it sued Villa Dubrovnik because they ''didn't want to return the deposit of one million euros''. With that settlement, Europrojekt gave up its claim for double the amount of the advance, and Villa Dubrovnik agreed to return the down payment, although until a few days ago they had claimed that there was no basis for the return.

It is currently non-operational land in the Sveti Jakov part of the city, spanning a total area of 6,675 square metres. The attempt to sell the land off, all with the aim of preserving the financial stability of the company, was launched in the midst of the coronavirus pandemic, and the sales contract with Europrojekt stipulated that the land be sold for 4.2 million euros plus VAT.

At that time, Villa Dubrovnik was still owned by the large Turkish Dogus Group, and in the summer of 2021, pressured by the consequences of the global public health crisis, it was sold off to a group of eight Croatian pension funds. With the aim of paying the full purchase price, on October the 6th, 2021, Villa Dubrovnik signed a long-term loan agreement and an agreement to secure a monetary claim (mortgage) on the property as a pledge debtor, and with this agreement, the hotel was to be paid the purchase price no later than the 15th of October 2021, and following the payment, the mortgage should have been established.

However, the payment never arrived. According to Villa Dubrovnik's report on its business operations for the year 2021, it is stated that during that year, the Company and the Group recognised income in the amount of 7.4 million kuna based on the down payment for the sale of the land in the past.

It is un that report that they noted that, based on the contract, the buyer had the obligation to pay the difference in the purchase price by a certain deadline, and otherwise, they'd lose the down payment. However, since the customer breached the contract and failed to fulfill their obligation, the Group recognised revenue from the collection of damages in accordance with contractual law.

However, they relented. As Villa Dubrovnik pointed out in its recent press release, the court decision confirmed Villa Dubrovnik's ownership of the aforementioned real estate, the previously paid down payment in the amount of one million euros was returned, and Villa Dubrovnik also achieved the desired structuring of the land parcels.

To speak more specifically, by exchanging and selling smaller parts of real estate with the owners of neighbouring properties, who are in partnership with the company Europrojekt, the required minimum area was reached, which will allow Villa Dubrovnik to develop its already planned project of the construction of luxury villas on all parcels under its ownership, which wasn't the case before.

"The planned development of the project of luxury villas in Sveti Jakov is currently still in the initial phase, and we're convinced that, with its synergistic potential, it could provide additional value to the overall tourist offer of the city. Of course, as a socially responsible company which akes into account the interest and opinion of the public, we'll publicly present our ideas beforehand to all involved and interested stakeholders, and in cooperation with the city authorities responsible for spatial planning, we'll ensure compliance with all of the relevant regulations that define construction in the area of Sveti Jakov,'' said Mirna Loncar Strazicic, president of Villa Dubrovnik's management.

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May 14, 2022 - In the last week of April, the spending in Croatia was 37% higher than last year, attributing this trend to the consequences of rising prices and the creation of stocks.

How is it possible that in a situation of general uncertainty caused by global geopolitical tensions, as well as the consequences of the pandemic, Croatia is facing the phenomenon of an explosion of fiscal accounts? Jutarnji List reports that data from the Tax Administration of the Ministry of Finance show that from April 25 to May 1 this year, compared to the same period in 2021, the number of fiscal accounts increased by a very high 24 percent, while the total fiscal accounts increased by 37 percent.

It is interesting that in the activity of providing accommodation and food preparation in the same compared week, the number of bills increased by an enormous 88 percent, while the number of bills was as high as 167 percent. Does this mean that Croatian citizens and tourists suddenly spend a lot more than they spent last year, or is it something else that should not be fueled by unjustified and potentially dangerous optimism?

Last year, when the inflationary trend began, Jutarnji List's analysis warned that the faster growth of the total amount of issued invoices in relation to the number of issued invoices probably indicates an acceleration of price growth.

Given that this year's theory seems to have proved correct, the fact that the number of accounts grew by 24 percent and the total amount spent on these accounts by 37 percent means that inflation has made a very significant contribution to the growth of fiscal accounts. However, the overall increase in the number of fiscal accounts of 24 percent is so large that we are certainly witnessing a very significant increase in spending.

As the real tourist season has not yet started, the growth in the number of fiscal accounts is most likely due to the robust growth of domestic demand. Why Croatian citizens choose to spend extravagantly at an uncertain moment in world history is difficult to assess without more detailed statistical insights into what exactly they paid, but it may be an attempt to spend before possible deeper problems begin. But it may also be simply a matter of swollen consumer confidence, regardless of all potential security and economic threats, writes Jutarnji List journalist Gojko Drljaca.

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ZAGREB, 22 April (2022) - Adriatic Croatia International (ACI) invested over HRK 24 million in strategic and infrastructure projects in its marinas at Dubrovnik, Trogir, Rab, Milna, Žut and Piškera in the first quarter of 2022, the marina chain operator said on Friday.

The company said its focus in the first quarter of the year was on expanding the marina portfolio and developing further services.

In this period, ACI generated HRK 35 million in operating revenue, which was HRK 2 million more than in the first quarter of 2021. EBITDA was HRK 10.7 million, up from 9.4 million in Q1 2021, while net loss for the period was HRK 5.66 million, which was 1.75 million less than at the same time last year.

ACI said it had invested HRK 44 million in strategic projects last year.

(€1 = HRK 7.5)

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ZAGREB, 17 Dec 2021 - The Croatian economy is expected to grow at a rate of 9.5% in 2021 and 4.6% in 2022, the Croatian Banking Association (HUB) said on Friday, citing projections by the four largest banks in Croatia.

HUB once again revised the Croatian GDP growth rate upward from July's estimate of 5.3%.

The national economy is expected to grow at a rate of 9.5% this year, with economists' projections ranging between 9.2% and 9.7%, HUB said in its latest outlook.

"That isn't surprising considering the developments and data released since July. Croatia is firmly positioned in the group of Central and Eastern European countries which are mostly surpassing the pre-pandemic level of economic activity," the report says.

Bankers' optimism isn't waning for 2022 either with the average expected growth rate forecast at 4.6%, with very little divergence in estimates - from 4.4% to 4.8%. 

Increased inflation to "eat up" a great deal of wage growth

The analysts expect that the accelerated economic growth will spill over to the labour market through lower unemployment rates and increased wages. They expect wages to increase by 3.7%, which is a faster rate than the 2.9% inflation rate estimated for next year.

The difference between the two rates is less than in previous years. "In other words, increased inflation will 'eat up' a great deal of the expected growth in nominal wages," HUB said.

The two main drivers of economic growth will be exports and investments. After a spectacular increase in exports this year, this trend is expected to continue at a high rate of 12% in 2022 while investments are expected to accelerate from 9.2% in 2021 to 11% in 2022.

NPOO to stimulate investment

Given that the corporate sector is still fairly passive with regard to investment, the main stimulus to investment in the short term should come from state investments, depending on how quickly funds from the National Recovery and Resilience Plan (NPOO) are activated. 

Croatia to catch up with ECB monetary expansion

HUB said that the general government balance to GDP ratio is decreasing roughly in accordance with government projections by 4.5% in 2021 and by 2.9% in 2022, and that gross public debt should decrease from 87.3% in 2020 to 82.9% in 2021 and 79.7% in 2022.

With regard to Croatia's aspirations to join the euro area in 2023, the analysts believe that the European Central Bank's quantitative easing policy will continue long enough for Croatia to catch, in terms of the impact of euro area monetary policies on demand for Croatian government bonds.

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ZAGREB, 6 Oct, 2021 - Standard&Poor’s (S&P) ratings agency has upgraded the credit rating of Croatia's state-owned energy producer Hrvatska Elektroprivreda (HEP) from BB+ to BBB-, so that now it is the same as the sovereign credit rating.

It is the first time since 2009 that HEP's credit rating has been restored to investment grade, the company said in a statement on Wednesday.

S&P said in its report that the upgrade reflects HEP’s success regarding robust credit metrics in volatile hydrological conditions and commodity prices.

This is a result of HEP’s gradual evolution towards a market-oriented company with a more flexible cost structure. In comparison to what was previously captured in the rating, HEP shows it is able to more effectively and more robustly manage its exposure to commodity prices and lower implicit volatility. A very good track record proves the company is committed to maintaining financial strength, the report says.

S&P "has recognised our continued efforts to improve risk management and our overall financial position in the challenging circumstances of the coronavirus pandemic," the chairman of HEP's management board, Frane Barbarić, said.

He recalled that, thanks to the good business results in 2020, HEP paid a portion of its profit, notably HRK 840.6 million, into the state budget in September. The company has continued to operate successfully, generating a consolidated net profit of HRK 1.25 billion in the first half of 2021, which is 291 million more than in the first half of 2020.

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ZAGREB, 6 Aug 2021 - In order to stop and reverse a negative natural increase, stop emigration from and encourage immigration to Sisak-Moslavina County, hit by a strong earthquake in late 2020, the Regional Development and EU Funds Ministry has launched a programme to invest HRK 15 billion in the quake-hit areas by 2029.

The programme is aimed at the social and economic revitalisation of government-assisted areas hit by the earthquake and envisages investments of HRK 15 billion in the period until 2029 or HRK 3.1 billion by the end of 2023, to be used for reconstruction and removal of damage caused by the earthquake, says the Večernji List daily.

An additional HRK 994.72 million will be invested as part of ongoing projects under the 2014-2020 Competitiveness and Cohesion Operational Programme.

The programme of integrated physical, economic and social regeneration of small towns in the once war-affected region envisages investments of HRK 196 million while government decisions adopted after the earthquake in Banovina envisage investments amounting to HRK 500 million.

Under the programme, direct damage caused by earthquakes that hit Croatia in 2020 has been estimated at HRK 41.6 billion, of which Sisak-Moslavina County accounts for more than 90% or HRK 37.5 billion.

According to the latest estimates by the national statistical office, Sisak-Moslavina County has a population of 144,599, with an average population density of 32.37 per square kilometre, which makes it the third least populated county. According to its size, it is the third biggest county.

The county population is estimated to have shrunk by 8.95% in 2019 in relation to 2015.

The ministry's programme proposes priorities for the county's future development, as well as special goals such as increasing productivity and employment and demographic revitalisation.

As for the post-earthquake reconstruction, the programme sets, as special goals, the reconstruction of housing and commercial units and infrastructure as well as the construction of new ones.

The programme is currently under public consultation.

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ZAGREB, 9 June, 2021 - Over the next five years, the Podravka Group plans to invest about HRK 5 billion in the modernisation and digitalisation of production and logistics, marketing and acquisitions, the group said on Wednesday after the Supervisory Board green-lighted its business strategy until 2025.

"The implementation of the adopted strategy includes investment of about HRK 1.7 billion in the modernisation and digitalisation of production and logistics processes, about HRK 1.4 billion in marketing to achieve organic growth, and about HRK 2 billion for acquisitions," Podravka said in a statement.

The group's Food division will focus on product and packaging development and innovation to increase the availability of products and adjust them to the needs and habits of different consumer groups.

The business strategy also sets the criteria for the consideration and selection of acquisitions. With possible acquisitions in the Food division, Podravka aims to strengthen its presence and position on markets to pursue further accelerated growth.

The Pharmaceuticals division (Belupo) will focus on strengthening growth on international markets, notably in central and eastern Europe, expanding its portfolio with products  in additional anatomical, therapeutic and chemical groups, and boosting growth on the domestic market by introducing new products.

(€1 = HRK 7.5)

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ZAGREB, 12 May, 2021 - During a visit on Wednesday by Prime Minister Andrej Plenković to the British American Tobacco (BAT) factory in Kanfanar, BAT revealed an investment of HRK 200 million in the production of a new category of heated tobacco products (HTP), underlining the importance of the new logistics centre in Rijeka.

"By expanding production in Kanfanar and opening a hub in Rijeka, we are continuing with BAT's significant investments in Croatia. With the introduction of production lines for new product categories, Croatia is additionally strengthening its position on the global map of production sites in the tobacco industry. We are continuing to expand our selection for consumers in Croatia," BAT Adria director Zvonko Kolobara said in a statement to the press.

He added that the increased capacity in Kanfanar would help BAT meet growing demands for HTP in Europe and northern Africa.

Kolobara thanked the government and Prime Minister Plenković for their efforts in creating an investment climate that stimulates further investments.

Plenković expressed satisfaction that BAT is continuing with its investments in Kanfanar and ensuring jobs. BAT's announcement of the investment comes after its announcement that it could leave Croatia due to unfavourable business conditions.

Plenković underlined that the new investment was an example of a good business climate and that BAT did not exert any pressure on the government to meet its demands to continue doing business in Croatia.

"The new, HRK 200 million investment in new products means a new impetus, enthusiasm and a new generator of business and with that, a contribution to Croatia's economy. The company employs 1,600 people and another 800 cooperate closely with BAT and make a living that way. The investment plans have been coordinated with their headquarters in London and all the employees at the factory will be satisfied while the entire economy of Istria County will benefit from BAT's operations," said Plenković.

He noted that the government was open to large global investors.

"It is excellent that BAT has established a hub in Rijeka for products from China that are distributed throughout Europe. That is additional confirmation of Rijeka's attractiveness as an exceptionally important transport and commercial port in the country. As far as BAT's staying is concerned, the government took account of the Croatian economy and creating conditions for all foreign companies doing business in Croatia and investors to have the same treatment. It is obvious that BAT has decided that the Kanfanar factory is important and that it wants to invest and that Croatia is important to it. There was never any pressure," said Plenković.

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ZAGREB, 7 May, 2021 - A part of the National Recovery and Resilience Plan (NPOO) refers to developing a competitive, energy sustainable and efficient transport system, and it is valued at HRK 5.5 billion, Minister of the Sea, Transport and Infrastructure Oleg Butković said on Friday.

The National Recovery and Resilience Plan totals HRK 47 billion and comprises five components, with the economy component valued at HRK 26.2 billion. That component includes a sub-component on developing a competitive, energy sustainable and efficient transport system, with investments worth HRK 5.5 billion, recalled Butković.

The plan, he said, foresees the continuation of significant investments in modernising transport infrastructure with the aim of developing a sustainable transport system and stimulating the development of smart solutions as well as  reforming rail, road and air transport as well as maritime and inland navigation.

We are prepared to make these reforms and that is an opportunity to continue the current strong investment cycle in transport infrastructure, which amounts to more than HRK 25 billion. With the resilience programme we are continuing that investment cycle which will amount to more than HRK 30 billion by 2030, particularly in railway projects as well as all the other projects, said Butković.

He announced that reforms would include amendment of the Roads Act by 2026 to create conditions for the interoperability of electronic road toll systems and improve road safety.

Answering reporters' questions, Butković said that the Hrvatske Autoceste road management company is well on its way to advertising a tender for a new contactless toll system at all motorways in the country.

He estimates that the tender could be advertised in September or October and that the new system will most likely mean the introduction of a digital vignette.

The plan also foresees the adoption of new laws on maritime zones and sea ports, on inland waterway transport and ports, and on regular and occasional sea transport to ensure uniform implementation of regulations on public port management.

The plan also includes the construction and reconstruction of railway infrastructure, the modernisation of sea ports, the procurement of three passenger ships and three catamarans, new ferry boats, trams, buses, a new photovoltaic power station, and the construction of a new Level 5 autonomous vehicle, said Butković.

According to Butković, HRK 2.8 billion of the HRK 5.5 billion planned to be invested in the transport system would be allocated to the private sector.

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ZAGREB, 13 April, 2021 - The Bridge party on Tuesday criticised the government's National Recovery and Resilience Plan, noting that investing in the public sector will not finance economic recovery but rather cause new scandals and clientelism.

"Each kuna invested in the private sector will yield a return of four kuna and each kuna invested in the public sector means a maximum return of one kuna, if the money is used efficiently, which in Croatia is not the case," Bridge MP Zvonimir Troskot said at a news conference.

He said that he condemned the stigmatisation of people who think critically about the National Recovery and Resilience Plan as "people whose patriotism is dubious."

Ruling HDZ MP Grozdana Perić last week said that those who criticise the National Recovery and Resilience Plan "do not love Croatia."

"Grozdana Perić and the prime minister's special advisor on economy, Zvonimir Savić, are not the only economic strategists. There are the Institute of Economics, the Croatian Employers' Association, the Entrepreneurs' Association as well as independent economists who are saying that the National Plan is not good," said Troskot.

"If entrepreneurs are again disregarded, we won't have money for wages, pensions or COVID allowances," he said.

Bridge against banning "For homeland ready" salute

Bridge MP Nikola Grmoja commented on initiatives to ban the Ustasha salute "For the homeland ready."

"As regards the insignia of the Croatian Defence Force (HOS), that is a legal unit of the Croatian Army. We are not for bans but rather for education and clear distancing from all totalitarian regimes, Fascism, Nazism and Communism alike," said Grmoja, noting that one should not link HOS with the 1941-45 Independent State of Croatia and the Ustasha.

"Banning symbols turns them into a fetish, and we don't want that," he said.

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