ZAGREB, 29 June, 2021 - Croatia can be satisfied with the agreement on key issues from the Common Agricultural Policy (CAP) reform package because it takes into account its most important demands, Agriculture Minister Marija Vučković said in Luxembourg on Tuesday.

At a two-day meeting in Luxembourg, EU agriculture and fisheries ministers on Monday confirmed the agreement on the reform of the CAP, reached with the European Parliament last week.

Vučković said Croatia was glad its most important demands had been taken into account, concerning the treatment of areas with natural constraints, animal welfare and certain exemptions and flexibility regarding small farmers.

The new CAP rules, to be in force from 2023 to the end of 2027, oblige member states to respect the social and labour rights of agricultural workers, encourage farmers to apply greener farming practices, envisage incentives for smaller farms and young farmers and advocate making financial support to farms more conditional on their results and performance.

Now that political agreement has been reached on the new CAP, the path is clear for both legislative institutions, the Council and the Parliament, to formally vote the new rules in.

The ministers also reached agreement on a control regulation that refers to fisheries.

Vučković said that monitoring and control in the fisheries sector were very important and that Croatia had made significant progress in recent years, notably regarding the application of innovations and new technologies in control and monitoring.

She commended the Croatian fisheries sector for undergoing a very important and difficult transformation, underlining the need to preserve the country's fishing resources, fishing fleet, small fishermen and their traditional way of life.

Vučković also called at the Luxembourg meeting for the continuation of support to wine makers, beekeepers and fruit and vegetable farmers.

For more about politics in Croatia, follow TCN's dedicated page.

ZAGREB, 29 June, 2021 - Prime Minister Andrej Plenković said on Tuesday the Social Democratic Party's interpellation on the government's slowness in post-earthquake reconstruction would not pass, adding that in the SDP "they have to pretend they are doing something" after losing in local elections.

Speaking to the press in Petrinja, Plenković said he had not seen the interpellation but that "when someone loses so badly in local elections, when they have a 13% rating, they have to pretend they are doing something." He added that parliament would reject it.

Plenković visited Petrinja to see the demolition of buildings damaged in December's earthquake and meet with the task force dealing with its consequences.

He said that when the reconstruction law was being passed, he said he wished to incorporate in it all constructive ideas and that no prior law included so many proposals from the opposition.

He said interpellations like the SDP's one did not serve to improve something but to show distrust in the government.

In the interpellation filed today, the SDP asks for urgently amending the reconstruction law, including local government in discussions about it, and informing the public more transparently, among other things.

Asked who was responsible for the fact that 150 damaged buildings had been torn down in the Banija region since the December 2020 earthquake and only three in Zagreb since the March 2020 quake, Plenković said the goal in Zagreb had been to first provide institutions that would be in charge of the whole process, then financing, and cooperation between the state, the city and the quake-affected counties around Zagreb.

He said the processing of reconstruction applications in Zagreb was "somewhat slower" than expected but that property-rights relations in the capital were "even more complex" than in Banija. "We tasked (Construction) Minister Horvat with accelerating all processes and I expect all who should help him in that to contribute."

He said Reconstruction Fund head Damir Vanđelić must be propulsive, notably regarding the reconstruction of private houses and buildings.

Citizens should be responsible and contribute by getting vaccinated

Asked if Croatia would have to resort to COVID-19 vaccination incentives, like some countries that have announced financial rewards, Plenković asked whether that meant "bribing people to be vaccinated?"

"What will we give to the 44% who have been vaccinated? If we give HRK 100 to someone who hasn't been vaccinated but is waiting and calculating, what about the million and a half who have been vaccinated? Give them money retroactively?"

Plenković said people were "fully informed" about all key matters and that every citizen had the responsibility to contribute to society by getting vaccinated.

Recalling the number of COVID deaths, he said everything should be done to motivate people to be vaccinated, adding that Croatia had 670,000 doses available.

If they were administered, he said, "we would practically solve all problems" and stop the virus from spreading. He said it was a matter of common sense and that, perhaps, young people should be motivated to attend concerts and big events with COVID certificates.

Asked what message inconsistencies in enforcing COVID restrictions sent to those undecided on vaccination, Plenković said that "everyone who is responsible will contribute, who isn't, won't."

He said Croatia had been applying mild restrictions out of respect for its citizens, considering them smart and responsible. He said the Croatian mentality would not accept tough restrictions. "We didn't decide in vain that we would not be a country with a curfew. That wouldn't have been well-accepted and I think we did the right thing."

For more about politics in Croatia, follow TCN's dedicated page.

ZAGREB, 29 June, 2021 - Croatia can be a green energy transition leader, Economy and Sustainable Development Ministry state secretary Ivo Milatić said on Tuesday at a conference on  Croatia's energy future organised by Lider weekly.

He said Croatia was preparing legislation and all the prerequisites for "as good and successful an energy transition as possible."

Milatić said Croatia had a 2030 energy strategy with an outlook on 2050, a national climate energy plan and amended laws on energy efficiency and biofuels, and that it was in the process of amending laws on renewables and the electricity market.

The latter amendments, he said, will significantly help with green transition as it will allow market development. "There will be no more random development projects without any physical plans."

Milatić said the National Recovery and Resilience Plan envisages HRK 5 billion for energy, of which three billion to digitalise and enhance the electricity network.

"That will help to achieve the main goals, as we committed to installing in Croatia 1,500 new megawatts by the end of 2024. Croatia's plan is to install 2,500 megawatts by 2030."

Milatić said the National Recovery and Resilience Plan also envisaged large sums for heating and energy efficiency in industry.

He said HRK 1 billion was envisaged for a Sisak biorefinery project, a facility that would produce major quantities of fuel, which could make Croatia influential in this part of Europe as well as develop agriculture.

"Our goal is for Croatia not to import 40% of energy and in order to achieve that, we must have many renewable energy source capacities. Croatia can be a green energy transition leader, but it's up to us."

Neven Duić of the Zagreb Faculty of Mechanical Engineering and Naval Architecture said Croatia's energy transition policy had changed for the better.

"The European transition hurricane that started brings big changes: 55% less greenhouse gasses by 2030, climate neutrality by 2050, we are heading towards 38 to 40% renewable energy sources by 2030, and the EU's green recovery plan brings money which can be used to push new technologies," he said.

For more about politics in Croatia, follow TCN's dedicated page.

June 25, 2021 - The issue of maritime welfare in Croatia was raised once again after a heated discussion on a beach in Drvenik Veli. Here are the details of the case and legal guidance to the maritime welfare in Croatia.

With the 2021 tourist season already being 58% better than 2020, tourists once again visit Croatia as one of the top holiday destinations.

However, like any year, the season can't go without at least some sort of incident.

Lovely beach, disgusting words

Yesterday, Croatia was shocked and enraged with the incident that happened on a beach on Drvenik Veli island (not so far from Trogir). Croatian journalist Tonka Alujević and her friend went to a beach where two Czech tourists started complaining that it's a private beach, perks of paying for a villa, and that Alujević needs to leave. Alujević refused to leave, stating that beaches are maritime welfare and cannot be privatized, refusing to move. After, as Alujević claims Czech tourists hit her head with a phone, they called the villa owner. 24 Sata daily newspaper published a video Alujević's friend recorded.

„Ma'ams, Ma'ams, how did you get here? On foot?“, asked the owner on a phone that was on speaker and held by the Czech tourists.

„I'm a journalist. Do you know Croatian laws? Do you want to end up in media?“ replied Alujević with a chill face while smoking a cigarette on a sunny day at the beach.

„Come on, put me in the media, come on put me! But first, go to the land register and see that my beach is private," screamed the owner in Croatian, with a lot of derogatory phrases (if only Czech tourists had a translator to understand the rich swear word heritage of Croatian language, right?)

The whole thing ended up with inspection stepping on the scene. Despite the video footage being clear, the owner, identified by Index.hr as Tomislav Meštrović, owner of Centovi Dvori Villa, tried to justify himself, saying everyone is welcomed at the beach, and he attacked the women because they passed through his doorway.

„No, I have no idea what video, who what... who knows what that is... I called the police for trespassing through my land“, said Meštrović to Index.hr when asked about the footage.

the conversation at the beach, screenshot/ 24sata

Law and order

Following this story, Index.hr's columnist Goran Vojković analyzed the law to clear up the issue of maritime welfare.

„The Maritime Welfare and Sea Ports Law states 'at least six meters from a line horizontally distant from the line middle waters'. But it can be wider, for example, if part of the land that in its nature or use serves to exploit the sea. It can also be narrowed- for instance, if support walls or a public road are close to the sea“, Vojković listed general rules but adding that maritime welfare border is specifically determined.

„So, the coast is free to use where the beach is, in general, six meters. You can come and use it for your needs, such as bathing, tanning, or walking. The land behind can be private, but the coast cannot“, concluded Vojković.

On the other hand, there are ways to limit the use of maritime welfare.

„There are some parts of the coast where you cannot enter. You can enter the marina and walk around it, but only until 10 pm. You cannot enter at all in a shipyard port. Those are the parts of maritime welfare for which the state assigned a concession to someone. The concession can limit or terminate public use“, explained Vojković.

Additionally, the law states that it is possible to have a beach in its concession and limit public entrance. But it needs to be registered, and the prices are so expensive that there are very few beaches like this in Croatia (Drvenik one not included in that small list).

„If someone claims that has a concession and that he/she can exclusively use some part of the coast, he needs to have a proof you can easily check in the register. I repeat, there are very small examples; even beaches in front of five-star hotels are public good“, Vojković pointed out.

And such beaches are filled with deck chairs, food stands, etc. But as Vojković pointed out, on a public beach, you have the right to bring your own deck chair, your own food, and drinks, and you can't be forced to consume content on the beach.

„In short, enjoy the Adriatic coast- with some very small exceptions of exclusive concessions, the entire coastline (including island coast) is free for your use and joy. Nobody can hold a grudge or complain if you came to a bath where they think it's 'their' beach. If someone is uncomfortable, don't debate, call authorities“, advises Vojković.

Pixabay

And the beach is open for public happily ever after

As Jutarnji List reported, the Drvenik case has a conclusion to an intriguing plot. Unhappy with Meštrović's behavior, Dalmatian locals went vigilantly and started writing bad reviews on Google, seeing the villa losing its value and tourists.

„Even though neither the building, nor its surroundings changed since the video was released, the unkindness of the owner was enough to move once-prestigious villa to the lowest grading Croatian places on Google“, says Jutarnji.

A couple of more lessons can be learned for a successful and enjoyable season from this tale.

For owners: present your offer fair in accordance with the law as transparency is the best way for your offer to beat the competition.
For tourists: if you were promised a private beach, but you see locals coming, don't be rude to them and don't attack them. The only one you can really be mad at is your host, who perhaps lied about what they can truly provide.

Learn more about beaches in Croatia on our TC page.

For more about travel in Croatia, follow TCN's dedicated page.

June 25, 2021 - Is there any possibility of ending segregated education in Vukovar? Mayor Ivan Penava announced Serbian and Croatian education could merge in school and kindergarten levels, but more details are yet to be revealed.

The start of the week saw interesting news that surprised many. As reported by N1, Ivan Penava, the mayor of Vukovar, announced Croatian and Serbian classes and kindergartens could merge together.

Vukovar, often referred to in Croatia as the „Hero City“ for the heavy blow it suffered in the 90s war Croatians refer to as Homeland War, still has a lot of ruins as memories of that ugly past. In the light of national tensions among Serbs and Croats, the segregation of kindergartens and different shifts in schools for Serbian and Croatian classes seem to be a solution to keep the peace.

screenshot/ N1

Good idea but more talks needed?

„In Vukovar, parents do not choose the model of education that is imposed by politics, it is nowhere written in public“, said mayor Penava, as reported by N1.

Penava, a former member of the Croatian Democratic Union (HDZ), despite earning a new term in the recent local elections as an independent candidate, enjoyed support from Miroslav Škoro, runner-up candidate for Zagreb mayor elections, and the leader of the Homeland Movement (DP) supports Penava's idea.

„I lived in America for a number of years, in Hungary, I traveled the world... what is the difference between Serbian and Croatian mathematics? Is Argentina in Serbian in the northern hemisphere, and southern in Croatian? I don't get it“, said Škoro adding that segregation was done in malice with a tendency to divide children from the start.

„In Vukovar, the symbol of defense had priorities. Reconstruction of the water tower, and certain moves Penava did well in his last term (he wouldn't win elections if he hasn't), thinks that city needs to move on. I support him 100%“, concluded Škoro.

On the other hand, criticism is erected on national-level politics.

„I don't think that local officials are the ones who need to determine a way in which minority education will be conducted. Political trade is clear here, and I'm glad there is no longer just Serbian-Croatian trading coalition, but also another one“, said Dragana Jecov, a Croatian parliament member from the Independent Democratic Serb Party (SDSS) referring to the accusations of the right-wing that current coalition of HDZ and SDSS and is vile political trade.

Interior Minister Davo Božinović also said that while we need to work on erasing national, social, and political tensions, but this is a question that needs to be discussed more seriously.

Additionally, as N1 reported, the Ministry of Education pointed out that different models of education for Vukovar schools exist, and parents can choose which they find most suitable.

Accepting national differences or nationalistic uniformity?

Some improvements have indeed been seen in the city infrastructure, but Vukovar still remains a challenging place to live. Partly due to the tough economic situation, but also because of discrepancies among Serbian and Croatian residents. Earlier in June, there was even a violent incident when a 30-year-old Serbian member of the Grobari football fan group physically attacked a Croatian 13-year-old boy in front of a bakery for having a medicine mask with Croatian symbols.

„Sadly, this kind of thing happened too long in Vukovar, where people attack each other because of national disputes. Media aren't even introduced to some of these events. It is spread a lot, as evident by the constant police patrols around Vukovar high-schools where there are always police cars around“, said Vukovar police to Večernji List daily newspaper.

Such incidents, a misfortunate loose ends of the war, also come from the Croatian side. Earlier in May, a group of young men chanted anti-Serb slogans in Borovo Selo (close to Vukovar), a scene of heinous war crimes in the '90s), sparking condemnation from both president Milanović and the Croatian Government.

In that light, integrated schools might finally bring positive changes in regards to tolerance and peaceful life for Vukovar citizens. But again, not everyone sees the glass as half full.
Index.hr columnist Gordan Duhaček agreed in his column that Serbs and Croats don't need to go to separate shifts but warns how Penava isn't the guy that should unite them.

„Penava doesn't want to integrate Vukovar schools and end the troubling segregation in a way to ensure a better future for the whole city, but instead to impose his nationalistic, often anti-Serbian narrative as the official one. Penava wants that Vukovar Serbs bow down to his view of the Croatian state“, wrote Duhaček.

Duhaček also reminded the readership of the attempt and fail of the Danube International school that supposed to integrate pupils of both nations, an idea that spawned 16 years ago. But, the project failed, and Duhaček sees both Penava and SDSS leader Milorad Pupovac not feeling too sad about it.

Iconic Vukovar water tower, pixabay

Questions on details

At the end of the week, the situation seems more confusing than clear. Is class integration a good idea? Could it save money for the city financially? What are some actual details of merging Croats and Serbians into one class? Obviously, Škoro is right that 2+2=4 in any math class around the world. But, troubling questions appear in subjects such as language and history. Croats and Serbs sadly have their own, different interpretations of historical facts, particularly when it comes to the last war, and while the speakers of two languages perfectly understand each other, some words do differ, and there is a different accent and spelling in the two formal languages. So, how can these issues be resolved? Would those two subjects remain in different shifts while universal subjects such as biology, math, or physics will listen in one merged classroom? Or will there be a different curriculum that would present both Serbian and Croatian history, Serbian and Croatian literature in that way, making Vukovar pupils more knowledgable in those areas than other pupils in the country?

Or some curriculum consensus on history could be reached, one that would satisfy both the Croatian and Serbian sides and thus truly open a doorway to the better understandings of the two nations in the future in perhaps the most nationally torn city in Croatia?

Obviously, Vukovar city authorities have some tensions with SDSS, but the city also has an expert associate for the development of civil society and national minorities, Siniša Mitrović in one of the City's departments. Did Mitrović manage to gain input from the Serbian minority in Vukovar about this merge? And how fast could the whole thing be realized? This autumn or maybe a bit later?
These are important and interesting questions that can only be answered either by mayor Penava himself or perhaps Josip Paloš, the director of the Vukovar City Education Department.

„Mayor Penava is in a lot of meetings and on fields, and his schedule is full. We will sadly not be able to answer you by your Friday deadline, but we will contact you at the earliest convenience“, said the lady at the Vukovar City PR service when I called them (and E-mailed) with a wish to arrange and conduct a brief phone interview.

While this article may present the current issues surrounding segregated education in Vukovar, this TCN reporter hopes mayor Penava will share more details about his plan on ending segregation in Vukovar schools and kindergarten with joint classes. If done right, this move can indeed be the way to a better, more peaceful future for Vukovar citizens.

Learn more about Vukovar on our TC page.

For more about education in Croatia, follow TCN's dedicated page.

June 24, 2021 - Following the professor Slavko Krajcar Death on June 18, take a look at the life of an established educator and scientist whose expertise made a significant contribution to Croatian politics in the energy sector.

„The influence of a teacher can never be erased“, or as an American historian Henry Brook Adams put it, „Teachers affect eternity; no one can tell where their influence stops“- these two are just some of the inspirational quotes about teachers you can find with a little assistance from Google.

Students at the Faculty of Electrical Engineering and Computing (FER) at the University of Zagreb are recognized in Croatia for their innovations. At the end of the day, they owe their excellence to the professors that educated them.

One of such professors was Dr. Slavko Krajcar that sadly, as FER official website reported, passed away on June 18, last week.

"Professor, Dr. Slavko Kranjcar made a significant contribution to the Faculty of Electrical Engineering and Computing as he was a dean of the Faculty from 1998-2002, after which he was the head of the department for high voltage and energetics from 2002-2006. He will remain in permanent memory as a respected scientist, expert, and a colleague“, said FER in an official release.

Kranjcar was also the member and the president of the Managing council at Ruđer Bošković Institute (IRB) that also expressed its condolences.

Born on January 14, 1951, Slavko Krajcar enrolled to study in FER in 1969, followed by graduating from Technical High School in Pula. He majored in FER in 1980 and got his Ph.D. in 1988. His scientific and lecture career started in 1974 when he was an assistant on a manufacturing electric energy course. From there on, he mentored various students on different levels, ten of which earned Ph.D. statuses under his guidance.

Kranjcar was active in the media, giving interviews and writing op-pieces on education issues, specifically the education of engineers in the 21st century.

„Krajcar participated on many domestic projects regarding science or economy as well on international scientific and professional projects. Counting just after the year 2000, he participated in over fifty projects, 36 of which he led. He was one of the leading figures in making Croatian Energetic Strategy (which the parliament accepted in 2010) and the Energetic Efficiency Strategy (2008) as well as executive plans on new strategies (2008-2020)“, recalled FER.

They added Fer rewarded Krajcar in 2002 when he received Josip Lončar's golden plaque for his dedicated scientific and educational work. He also received special recognition for developing SRCE- The Computer Centre of the University of Zagreb in 2011, followed by the Ho CIRED award for contribution in developing the field of electro distribution in Croatia. He also received HRO CIGRE recognition in 2018 for the overall contribution to the electro energetic activities in the Republic of Croatia and the Nikola Tesla Award in 2020 for the contribution to science, education, and profession in the field of electrical engineering and computer sciences and application of those technologies.

Believe it or not, Krajcar even made time to contribute to art and culture as well. He published two books of poetry, edited four books regarding cultural issues, and was the president of the Association for Čakavski dialect (distinct for the use of Ča as a word for what and conversated on coastal Croatia).

Learn more about Croatian inventions & discoveries: from Tesla to Rimac on our TC page.

For more about science in Croatia, follow TCN's dedicated page.

June 23, 2021 - The ninth article in the series, "Friends of Croatia: Croatian Protocol Guide", brings you more details from the Protocol guide for diplomatic missions accredited to the Republic of Croatia issued by the Ministry of Foreign and European Affairs to ease the arrival of the foreign diplomatic representatives to Croatia.

With diplomatic immunity already being mentioned in this series, we saw that the Croatian Ministry of Foreign and European Affairs (MVEP) following the terms of the 1961 Vienna Convention on Diplomatic Relations, dedicated a special part to diplomatic immunity in its Protocol guide for diplomatic missions accredited to the Republic of Croatia. This guide is another confirmation of how MVEP, as it previously explained to TCN, finds diplomatic relations very important, particularly representing the interests of Croatian companies and the Croatian economy, which back in March was evident in a successful agreements FM Gordan Grlić Radman achieved for Croatian entrepreneurs on the Egyptian market.

„In a constant effort to provide, in a timely fashion, quality support to diplomatic missions, diplomats, and other members of missions, the Diplomatic Protocol is happy to present a brief guide for diplomatic missions with useful guidelines concerning ceremonies and visits, and privileges and immunities. The guide is meant for information purposes only, and we hope it will help diplomatic missions and their members enjoy successful terms in office in Croatia“, says the opening of the Protocol guide. Guide also points out how „The Diplomatic Protocol of the Ministry of Foreign and European Affairs is the principal address for diplomatic missions accredited to Croatia“.

Apart from previously mentioned diplomatic immunity, the guide also explains the details of welcoming new diplomats as well as the procedure of escorting the diplomats on their departure from Croatia.

Pixabay

Ground/air arrivals

So, when the Ambassador arrives in Croatia, the Diplomatic Protocol, Ceremonies, and Visits Department informs the competent authorities. What is interesting is that the rules in the protocol differ in practice pending how Ambassador comes to the country.

„If the Ambassador arrives by a road border crossing, then the head of the Ceremonies and Visits Department will schedule the earliest convenient date for a visit to the newly appointed Ambassador at the official residence or the Embassy of the sending state“, explains the guide.

The other option is by airplane.

„When the newly appointed Ambassador enters the state territory of the Republic of Croatia for the first time at a border crossing at the Zagreb International Airport, his/her VIP treatment will have been arranged and, during office hours, he/she will be greeted by the head or a representative of the Ceremonies and Visits Department“, says the guide.

The Embassy also sends a diplomatic note to the Diplomatic Protocol to arrange details and date regarding the presentation of credentials to the President of the Republic of Croatia and of copies of the credentials to the Head of the Diplomatic Protocol of the Ministry of Foreign and European Affairs of the Republic of Croatia. This is important as it confirms the Ambassador is not just a visitor but a legitimate representer of his/her country and appointed by the authorities of the country that enjoys bilateral relations with Croatia. And proper goodbyes at the end of the Ambassador term are in order as well.

„When an Ambassador is to depart from the Republic of Croatia, his/her Embassy will send a note to the Diplomatic Protocol advising of the date and time of his/her departure. The Ceremonies and Visits Department then notifies the competent authorities of the time and place of his/her departure from the state territory of the Republic of Croatia. VIP treatment at Zagreb International Airport will be arranged“, explains the guide.

pixabay

Friendly and safely

As foreign ministers frequently travel to other countries, embassies have a key role in making those visits.

„An Embassy in the Republic of Croatia notifies the Diplomatic Protocol in a diplomatic note of the visit of a Minister of Foreign Affairs to the Republic of Croatia. All further details concerning the visit are conveyed to the Diplomatic Protocol in a diplomatic note. In the case of an official or working visit, the Ceremonies and Visits Department is responsible for the logistic support. The Ceremonies and Visits Department will in further communication with the Embassy in the Republic of Croatia arrange the details of the organization of the meetings requested. This includes accommodation in the previously agreed format, transport, protocol and security. At the proposal of the Ceremonies and Visits Department, or at the request of the Embassy, free time will be organized as well. If the proposal is accepted, the Ministry of Foreign and European Affairs will cover the expenses of the proposed part of the program“, explains the guide.

There is even an interesting prescription regarding the safety of politicians visiting the country. As the guide points out, the arrival of a protected person, delegation and security staff needs to be announced at least 48 hours prior to entering the territory of the Republic of Croatia. Pending on the rating of the protected person varies the allotment of firepower allowed to be carried in Croatia by the security staff. Three pieces of firearms along with ammunition for the Head of State, 2 pieces of firearms for a Parliament Speaker or a Prime Minister, and one piece of a firearm for the Minister of Foreign Affairs or a Head of an International Organization and Institution. Of course, this norm can be changed pending „on the basis of the judgment of the security department in charge, or on the basis of reciprocity“.

„When announcing the arrival of a protected person, delegation and security staff, a detailed program of activities needs to be submitted“, informs the guide.

Info such as times of arrival in and departure from the Republic of Croatia, the border crossing to be used for entering and exiting the state territory of the Republic of Croatia, personal information including passport numbers of nationals of non-member states, ID numbers for citizens of EU Member States as well as brand, type and a serial number of firearms and quantity of ammunition that foreign security staff will be bringing into the Republic of Croatia must be provided in the program of activities.

It may sound a bit strict but easily manageable by professionals in a friendly bilateral relationship, allowing to conduct diplomatic relations without fuss. One such important recent visit to Croatia came from the US Department of Homeland Security Officials in Croatia regarding visa-free travel. No doubt, these established rules were vital for that visit as for many others to come in the future as Croatia continues to nourish diplomatic ties with its allies.

To read more from the series "Friends of Croatia", follow TCN's dedicated page.

For more about diplomacy in Croatia, follow TCN's dedicated page.

ZAGREB, 23 June, 2021 - Despite the considerable setback dealt by the pandemic, Croatia has a rare opportunity in the next five years to restore its economy to health and to ramp up the public investments necessary for appreciably higher growth rates with the help of EU funds, an IMF mission says in a Concluding Statement.

"Following a painful contraction of 8 percent in 2020, the economy looks set for growth between 5 and 6 percent in 2021 driven by a rebound in the services sector and investment - provided the pandemic does not provide further unwelcome surprises," the mission says the statement published on Wednesday after visiting Croatia as part of regular consultations with member states.

"With sufficient luck regarding tourism outcomes, and a successful vaccination drive within the next months, growth could even exceed 6 percent this year. Assuming the pandemic fades by the end of this year, growth could remain high over the next few years, if the country makes full and timely use of the potentially sizable forthcoming inflow of EU funds," according to the statement.

"Since the first quarter, the recovery has picked up noticeably with areas like construction and manufacturing already reaching activity levels higher than in 2019. Overall, the number of registered unemployed persons has fallen by nearly 13 percent since a year ago. However, tourism and directly related sectors are yet to fully recover. This process is likely to take another year or two."

Swift measures by the authorities

"Between the pandemic and two large earthquakes, Croatia has been severely tested, and the country’s resilience has come through. The economic contraction in 2020 - painful as it has been -was not as severe as those experienced by many other economies with a strong tourism component. This is mainly due to the swift measures enacted by the authorities," the IMF staff said.

"Support measures must remain in place until the health of the population and the economy have been fully restored. As conditions improve, support measures need to rotate toward preparing the workforce for the post-pandemic world, and facilitating balance sheet repair of viable businesses. Thereafter, the challenge of once again reducing deficits and the public debt whilst shifting growth into a new high gear must be taken on. The generous funding from the EU represents a historic opportunity, to help meet these challenges successfully - an opportunity that must be fully utilized, in a timely fashion," the IMF mission said.

Not the right time to further cut taxes

Noting the government's support measures, the mission said, "Just as these support measures were essential during the worst of the crisis, they must now be better targeted to lagging sectors of the economy - and they must remain in place till the economy has more fully recovered."

"It is paramount that a vaccination drive be as successful and widespread as possible, that extra healthcare costs are fully met and arrears in the healthcare system are reduced to the maximum possible extent," according to the statement.

"Complementing the use of funds such as the European Social Fund, fiscal resources saved this year due to improving conditions can also be usefully redeployed to train more workers in sectors like greening and digitalization."

"In sum, in the view of IMF staff, the most important fiscal goal in 2021 is to focus on spending available resources wisely to restore the economy to health. If this is successfully accomplished this year, it will more firmly ground the efforts to reduce the deficit and debt over the next few years," said staff said in the Concluding Statement.

"Regarding revenues, the authorities need to conserve all available resources to meet any unexpected expenditures into 2022, and well beyond. This is one clear lesson from this completely unforeseen shock the world has suffered. We hold that this is not the right time for any further tax cuts or weakening of the tax base. Current conditions are still far too fragile for the country to afford them," they said. 

Recovery and Resilience Fund provides unique opportunity for economic development

They said that there were few doubts that a post-pandemic "will be more digitalized in the most basic aspects of our lives, and that it should be greener. In these two areas, Croatia has great strides to take, from which there will be a sizable return on investment, for decades to come."

The IMF reiterated that "our most important recommendation was to raise public investment, for the sake of future growth. Now, that conviction has only deepened, as it is important to acknowledge a singular aspect in which Croatia is actually better off than it was before the pandemic."

That is "the generous allocation of EU Funds, including from the Recovery and Resilience Fund (RRF). The RRF resources amount to 10.6 percent of GDP in grants to be utilized by 2026."

"These funds reflect a truly unique opportunity along the path of economic development, which many countries in the world are not fortunate enough to have. It is important for all stakeholders in Croatia to fully understand the significance of this opportunity. These funds are available, but they need to be absorbed efficiently, and in a timely manner. They must also be accompanied by needed reforms," the IMF said.

"Thanks to the influx of these EU funds beginning towards the end of this year, Croatia can significantly upgrade its public capital stock, decarbonize its economy, catch up with digitalization, and improve its maritime and rail transport systems. If the projected investments go according to plan, we currently assess that the funds from the RRF alone could add as much as 2.9 percentage points to real GDP over the next twenty years."

Opportunity to reduce income gap in relation to EU

"When the effects of the planned reforms, as well as the other EU structural funds are put together, Croatia now has its best chance since independence to significantly narrow the current 35% gap in per capita income with respect to the EU average," the mission said.

It added that "the prospect of living in a vibrant society with prosperity rapidly converging to EU levels could cause the young to fundamentally re-evaluate their future, thereby further stemming the tide of outward migration. That, in turn, would have the positive effect of reducing risks to the sustainability of the healthcare and pensions systems. It is very much possible now, and unlike ever before, to start a virtuous cycle - and to definitively escape past vicious circles."

The authorities have requested a Public Investment Management Assessment from the IMF, to take place in August 2021, the statement noted. "This assessment will help prepare an action plan to help make sure investment spending is effective, is sensitive to climate change related considerations and supports sustainable long-term growth."

The authorities’ National Recovery and Resilience Plan "has laid out major complementary reform commitments across five components: green and digital economy, public administration and judiciary, education, science and research, labor market and social protection, and healthcare. These are essential for the flexibility Croatia needs to operate its economy smoothly, once inside the eurozone."

Reforms needed for stronger public finance

Within the reform areas where the strength of public finances is the focus, IMF staff re-emphasizes the importance of support, from all stakeholders, for civil service and administrative reforms, "including a modernization of the public salary system, as well as improving the territorial organization of sub-national governments."

Support is also called for ending "stop-gap measures to take care of healthcare arrears, through an overhaul of its cost structure" and "exploring a more sustainable revenue base, to preserve healthcare quality standards."

The IMF also recommends the development and implementation of a full-fledged strategy for state-owned enterprises (SOEs), "including the separation of core from non-core businesses, and a strengthened oversight system for the former to ensure that they contribute their fair share to the budget by remaining financially durable after their public service obligations are met. The authorities’ commitments to sell some non-core SOEs over the next few years is a promising start." 

Also recommended is ensuring the long-term sustainability of the pension system, given population aging.

In addition to these areas, constantly improving the competitiveness of the Croatian economy through active dialogue with the private sector, remains essential.

"For the forthcoming increase in public investment to have maximum effect on the economy’s growth rate, it must be complemented by increases in private investment, as well. Reforms to the framework of debt restructuring, insolvency, and efforts to further improve predictability and efficiency in legal procedures remain central to unlocking more resources from investors, as it allows them to invest with greater confidence."

Banking system liquid and sufficiently capitalized

"Monetary policy remains highly expansionary, within the exchange rate anchor in place since 1993. This stance is appropriate given the need to nurse the economy fully back to health," the IMF staff said.

The recent pick-up in inflation is more likely than not to be transitory in nature, but should inflationary pressures prove more persistent than in the euro area, the central bank "may consider reducing excess liquidity in the banking system, while maintaining exchange rate stability."

"The banking system has remained liquid and is on average well capitalized," the mission said, adding that there was more than enough money to meet the demand for corporate loans.

Housing lending remains strong, while uninsured household cash loans have decreased, which the IMF said was positive.

Although the ratio of non-performing loans to total loans has remained stable, the so-called stage II loans, a forward-looking indicator of future asset quality problems, has risen - particularly for non-financial corporations. This development warrants continued close monitoring."

"The pandemic has not affected the upward trend in house prices in Zagreb and coastal areas. To the extent that housing purchases are not driven by excessive household borrowing, they do not constitute an immediate financial stability risk," the IMF said.

However, this also requires continued monitoring by the central bank, If circumstances require it, the central bank "might wish to consider putting in place more formal macro-prudential measures (than the current implicit debt-service-to-income ratio included in the Foreclosure Act)."

"Despite the considerable setback dealt by the pandemic, Croatia has a rare opportunity, over the next five years, to restore its people and economy to health. It can ramp up the public investments necessary for appreciably higher growth rates, with the help of EU funds. Such opportunities should not be taken for granted. The onus of efforts is not exclusively on the authorities. All stakeholders in society must offer them the support for vital reforms, while doing their parts to re-energize private investment, and innovation. Adopting the euro will help remove some existing economic frictions by removing exchange rate risk. Yet, reaping the full benefits of the currency union requires strong focus and preparation. A brighter future is very much within reach. The time to act is now," according to the Concluding Statement.

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ZAGREB, 23 June, 2021 - The first meeting of a task force to prepare a new Labour Act was held on Wednesday and social partners said that it was conducted peacefully without any complex issues and that it is expected that the law, which will more clearly define "remote work," among other things, should go into force mid-next year.

After months of consultation, it has been decided that a new Labour Act will be prepared, one that is appropriate to contemporary circumstances, state-secretary in the Labour Ministry Dragan Jelić said.

The act needs to introduce novelties that emerged during the pandemic, such as remote work and working from home, said Jelić.

The task force consists of the government's social partners, employers and the unions, and it is expected that a first draft bill will be completed by the year's end.

As for remote work and work from home, the new law will define protection, obligations by employers and employees, and the necessity for mutual approval, said Jelić.

Remote work has to be based on mutual agreement

"The current Labour Act defines the possibility of remote work, many have used that. Some have signed an annex to their contract, some haven't. There were some disputes over the cost of working from home. However, I believe that we will resolve those matters in a satisfactory way," said Jelić.

President of the Independent Croatian Trade Unions Krešimir Sever expects answers to many issues to be reached through negotiation. "Today we did not discuss any of those issues, just the introduction to the Labour Act," said Sever.

The unions will demand that fixed-term contracts be reduced as one-quarter of Croatia's employees work that way. He added that the unions are categorically opposed to extending working life.

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ZAGREB, 23 June, 2021 - Documents that were confiscated from the Dubrovnik State Archives and were found in the Salzburg Diocese Archives were handed over on Wednesday in the presence of Croatia's Minister of Culture and Media Nina Obuljen Koržinek and Croatia's Ambassador to Austria Danijel Glunčić.

The operation ended successfully with the return of Croatia's cultural heritage, Minister Obuljen Koržinek said, noting this isn't the first or last time this has been done.

Ambassador Glunčić underscored that the Salzburg Diocese had full understanding that the medieval documents could not be considered to be part of Austria's or Salzburg's history.

The documents involved are two pontifical documents which the diocese was immediately prepared to return to Croatia, and this was also approved by Austria's state authorities, he said, adding that the documents will be placed in Dubrovnik's Archives.

Police working on issues related to cultural heritage

Police Director Nikola Milina said that the police were working on cultural heritage issues, adding that they have had good results so far.

A soon as the information was released, the Croatian police contacted the police in Austria and the documents were quickly identified which led to them being returned, he said.

Digitalisation to facilitate return of other missing documents

Director of Dubrovnik State Archives Nikolina Pozniak is convinced that digitisation will contribute to other documents that have gone missing from the archives and other institutions to be returned.

The head of the archive's collection, Zoran Perović, explained that the documents returned today are two pontifical bulls dated 1189 and 1252. The first notes that the Pope is deploying Archbishop Bernard to Dubrovnik while the other bull refers to the appointment of an archbishop to be a judge in a dispute between the Bar and Dubrovnik Archdioceses.

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