ZAGREB, June 11, 2020 - Finance Minister Zdravko Maric said on Thursday the new euro bond issue met with big interest among investors and that they recognised Croatia's successes in the affirmation of the investment credit rating, drawing closer to the euro area and the fight against COVID-19.

Speaking to the press, he said investors' interest in the new bond was 4.2 times bigger than the issue, i.e. €8.4 billion. "I can't remember such a big interest among quality investors across the world."

That means that "several big and important houses recognised what was done and what is being done in Croatia" and that "our image has been affirmed in international financial circles," said Maric.

The new euro bond will be used to refinance a dollar bond which was issued ten years ago and is due on July 10, and its interest of 6.6% is replaced with 1.5%, which is a considerable saving, he said.

The Finance Ministry on Wednesday issued an 11-year €2 billion bonds on the international capital market at 1.5% interest and 1.643% yield. The issue was arranged by Banca IMI/Privredna Banka Zagreb, Barclays, Deutsche Bank, and J.P. Morgan.

The investment community's interest was exceptional, with more than 400 potential investors, which was helped by investors who invest only in investment credit rating securities, the ministry said today.

The revenue from the issue will be used to refinance a US$ 1.25 billion euro bond due in July. Nearly HRK 360 million will be saved on interest annually. The rest of the issue will be used to finance government aid for businesses affected by the COVID-19 pandemic, as envisaged in the revised 2020 budget.

The Croatian capital city unfortunately has many worn facades and buildings, and the bid for Zagreb's Blok Badel will be opened in just one month and will run until May the 15th, and the selected investor should be known early on in June.

As Poslovni Dnevnik writes on the 22nd of April, 2019, the City of Zagreb issued a public call for potential investors in the realisation and development of the Blok Badel project. This is a space located near the very centre of the city, about 30,000 square metres bordered by Vlaška, Šubićeva, Martićeva and Derenčinova. The expected value of this investment is about 750 million kuna, according to Tocka na i.

Potential investors are required to have a total value of their realised projects of at least 1 billion euros, have adequate experience in the reconstruction and conversion of historical or protected facilities over the last ten years, and also have experience in the realisation of public-private partnership projects of a minimum value of 75 million kuna.

Bids which do not provide evidence on the development of similar projects over the last ten years and proof of their completed projects for the development of residential, office, hotel and multifunctional facilities will not be considered.

"The location has some great potential with regard to its position, it's very well connected with public transport, it's close to a car park (garage), the city centre, city squares and historical and cultural sights. The realisation of this project will involve the restoration, construction and redoing of the entire block as the only block in this part of the city that hasn't been completed and has no clearly defined urban structure and purpose.

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Croatia hasn't done the best job of showcasing itself in the investment world, with investors often referring to it as the ''Bermuda Triangle'' and with the phrase ''ABC'' having come to mean ''Anything but Croatia'', things aren't looking all too bright. Things can be altered, but as the old British saying goes; mud sticks.

As Ana Blaskovic/Poslovni Dnevnik writes on the 16th of April, 2019, when compared to 2018, the share of companies that would reinvest in the Republic of Croatia dropped from 68 down to 54 percent. If they were asked to do so again today, almost half of the German companies operating here would decide against investing here again, and over sixty percent of those investors have an extremely poor economic picture of the country.

This is the result of a survey by the German-Croatian Chamber of Commerce conducted between February and April of this year among 150 of its member companies. In almost six years since joining the European Union, investors first had high expectations which quickly fell, but that was apparently somewhat expected. Following Croatia's accession to the EU, there was a period of transition in which investors were waiting anxiously and looking forward to seeing European practices come to life here, but that wasn't quite the case here.

Unlike former new member states of the EU who were given the green light to join during previous wave of the EU's enlargement, Croatia stalled, at least that is the overall impression one gets when asking members of the German Chamber of Commerce, including huge names such as Allianz, Siemens, Bauerfeind, Knauf, Müller, Spar, RWE...

"The survey is a perception, but it speaks about the overall impression of companies doing business [in Croatia], and that's that nothing important is changing,'' said Thomas Sichla, president of the Chamber. As stated, when compared with the previous year, the share of companies that would reinvest in the country dropped from 68 percent to 54 percent, which speaks volumes about perception and just how mud really does stick.

The fact that this isn't just an isolated case of pessimism, but is the contour of very worrying trends is best illustrated by the fact that eighty percent of the respondents had already previously responded to the survey.

While in Croatia almost half of investors would say "Auf Wiedersehen" to investing here again, in other countries in Central and Eastern Europe where parallel research was conducted, only one fifth of the companies who responded would say the same, so it shouldn't come as any surprise whatsoever that investments and their investors simply bypass Croatia entirely. Things aren't changing in Croatia, and if they are, it isn't fast enough at all.

Out of twenty Central and Eastern European countries, Croatia is still "relatively attractive" in eighth place on the list. Siemens' leader Medeja Lončar says that "more flexibility and speed in Croatia for a better economic and investment climate are needed", adding that Siemens will continue to invest in Croatia, depending on the business environment. If one scratches the surface, the companies that make up the German-Croatian Chamber of Commerce are almost repeating some very well-known criticisms that many have about Croatia.

At the top of that ''criticism list'' lies an insufficient fight against corruption and crime, followed by the burden of high taxes and general dissatisfaction with the tax authorities and the system despite the three waves of ''tax relief'' under Finance Minister Zdravko Marić. The top five barriers are Croatia's below par public administration and lack of legal security.

On the other hand, as a business advantage, investors pointed out the fact that operating in Croatia opens the door to the EU's single market and to infrastructure. Despite the ever-burning workforce problem that is rapidly evolving into an enormous problem of epic proportions for Croatia, employee qualifications and the quality of higher education continue to be among the main benefits in Croatia, are are productivity and employee motivation. However, in Germany the Chamber notes that the Croatian state should engage and talk much more to the private sector about the demand for labour and adapt its education system to that need.

With Croatia's continually deteriorating growth prognosis, which without reform is falling more and more, more than sixty percent of the surveyed companies find Croatia's economic environment to be very poor, and only a third claim it to be satisfactory.

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Click here for the original article by Ana Blaskovic for Poslovni Dnevnik