May the 25th, 2022 - A massive 1.3 billion kuna has been secured for Croatian tourism recovery following to unprecedented pandemic-dominated years in which very little, if anything, was realised at all.

As Dora Koretic/Jutarnji/Novac writes, according to the Ministry of Tourism, for the first time, a significant amount has been secured for Croatian tourism recovery in the next Multiannual Financial Framework, from which the sector will have access to 1.3 billion kuna.

These are funds from within the Competitiveness and Cohesion Operational Programme and the Integrated Territorial Programme for the period from 2021 to 2027, of which most of the money should be available to small and medium enterprises which operate in the field of tourism.

As has since been learned from the Ministry of Tourism and Sport, companies will have 689.4 million kuna available under the allocation for Croatian tourism recovery, which will be made available through financial instruments.

"The money is intended for investment in smart technologies, innovation and development, job creation, for the growth of competitiveness and new products, such as the construction of small hotels, renovation, digitalisation or the green transition," the competent ministry revealed.

Wellness tourism

In addition, 40 million euros/302 million kuna were provided for tourism - twice.

The first part of this cash refers to "improving the role of culture and sustainable tourism in economic development, social inclusion and social innovation", where money is being provided for investments in public tourism infrastructure, primarily healthcare, wellness and wellbeing tourism, then follows active tourism, that is, sports infrastructure and the valorization of natural and cultural heritage.

According to the ministry, this is a grant, while a new 302 million kuna has been provided through the "Integrated Territorial Programme", which is responsible for the development and implementation of the Ministry of Regional Development and EU Funds.

"These investments are focused on public tourism and sports infrastructure in urban areas, hilly and mountainous areas, as well as the islands. All of the investments, as well as those financed by the National Fund for Recovery and Resilience (Croatian: NPOO), focus primarily on the digital and green transition,'' they said from the Ministry, which noted that the ultimate goals should be to reduce the impact of tourism on the environment, reduce energy consumption, increase the production of clean energy and reduce costs in general.

This week, the Croatian tourism sector finally welcomed the announcement of the full and detailed criteria for the possibility of using the money earmarked for tourism under the National Recovery and Resilience Plan, under which, the plan for Croatian tourism recovery will have access to money amounting to a massive 2.1 billion kuna.

You can find out more about how Bjelovar is planning to utilise these huge sums by clicking here.

Tourist infrastructure

Details for applying for the first tender, intended to finance tourist infrastructure, after much anticipation, were finally announced at a public consultation this week. These are the details of the call worth 930 million kuna, intended for local and regional self-government units, but also with the possibility of applying to private investors, mainly through public-private partnerships.

Half of the money is actually intended for publicly owned spas, ie for the purpose of wellness and health tourism, while the rest relates to visitor infrastructure and active tourism infrastructure.

However, most of the sector, ie its private part, is most looking forward to the publication of all of the details and criteria for applying for the second call within the NPOO, worth 1.2 billion kuna in total.

The Tourism Ministry revealed that most of the money will be used for hotels, worth 720 million kuna, mainly for investment in accommodation facilities, including ancillary facilities such as bars, restaurants, congress halls or amusement parks.

For more on post-pandemic Croatian tourism recovery, make sure to keep up with our dedicated politics section.

May the 23rd, 2022 - Huge sums of money from Croatia's Recovery and Resilience Plan (Croatian: NPOO) are set to flow into the country's medical and wellness tourism offer, which is a sector that has enormous potential for growth. The Bjelovar wellness tourism sector in particular is rubbing its hands impatiently.

As Poslovni Dnevnik/Marija Crnjak writes, financing projects in the Croatian tourism sector through the National Program for Recovery and Resilience in the Public Sector, for which Croatia will have a massive 930 million kuna at its disposal, will definitely support larger projects in a high stage of readiness, and most of the money will go to continental tourism, ie spa, wellness and other such health-oriented tourism projects.

The above could be learned from the proposal of the public invitation sent by the Ministry of Tourism and Sport on Thursday for public discussion via the e-consultation portal.

The public consultation will be open until June the 2nd, 2022, and according to the first comments made by interested parties, there shouldn't be many objections to what's on offer. A call for the private sector to receive most of the 1.2 billion kuna ''cake'' is yet to come.

Amounts and limits

After passing the phase of public debate, the tender will be re-agreed with the European Commission (EC), followed by a real match for a total of 2.2 billion kuna in grants. "We're being given an excellent opportunity for the long-term sustainable and efficient development of tourism and we expect that these projects will have an impact on strengthening destinations and the quality and competitiveness of their entire offer," said Minister of Tourism, Nikolina Brnjac.

In the public call, the projects were divided into three groups. The first and most generous infrastructure lies in the function of the development of health and wellness tourism, and this includes the construction, reconstruction, renovation and/or equipping of infrastructure, whether it be in regard to accommodation facilities or other facilities. An allocation of 465 million kuna is planned for this group.

For all projects, the amount of co-financing is 100 percent of the eligible costs for projects that don't contain state aid, while for investments in projects that do already contain state aid, the amount is regulated in accordance with the rules for granting state aid.

A minimum of 9 million kuna and a maximum of 120 million kuna can be allocated for an individual project in this group. Bjelovar wellness tourism, which is brimming with potential, is expecting the highest amount from this for its thermal riviera complex with Olympic, outdoor and indoor pools and a water park, relying on sustainable energy and geothermal sources.

The large sport and tourism project of the City of Bjelovar is worth a massive 250 million kuna, and Bjelovar Mayor Dario Hrebak announced back in March that the Bjelovar had obtained a building permit for the construction of the spa.

The Bjelovar wellness tourism project will be given a huge spring in its step. Hrebrak says: ''We've been looking forward to this''

The issuance of a building permit is also the final step before announcing a public tender for the execution of the works, which the city administration expects to come June this year.

"We've been looking forward to this call and I must commend the competent ministry on its work. The criteria for the grant are really complex in order to be able to fully support all goals, to support ready-made, large projects with building permits, projects that have serious partners, and projects that will bring added value, and that's exactly what we're planning in Bjelovar. There's no reason that we won't manage to receive the maximum amount of support,'' believes Hrebak when discussing Bjelovar wellness tourism hopes.

The second group for funding includes projects for visitor infrastructure that promotes cultural and natural heritage, gastronomic, oenological and other such destinations. These include visitor centres and interpretation centres, and an allocation of 185 million kuna has been planned for this group, with the view that an individual project can receive a minimum of 8 million kuna and a maximum of 40 million kuna.

For the third group, active tourism infrastructure, 280 million kuna has been earmarked for assistance from the NPOO, with a minimum of 7 million kuna and a maximum of 40 million kuna per project. These include sport and recreational infrastructure in the function of tourism, mountaineering facilities, swimming pools, as well as hotels, camps, hostels, camping resorts, hiking trails and lookouts that are part of a comprehensive project.

For more, check out our politics section.

ZAGREB, 6 April 2022 - A two-day conference called Smart Cities 2022, organised by the Lider business weekly, started in Zagreb on Wednesday, with the mayors attending it being told that they should do their best to make the most of EU funds for the strategic development of their communities.

"EU funds for the 2021-2027 period provide an unprecedented opportunity for Croatia, with minimally twice as much funds being available than in the previous period," said Ana Fresl, president of the Croatian Employers Association (HUP) association of EU fund professionals.

She said that Croatia had €13.5 billion available from the seven-year cohesion policy, and an additional €6.3 billion under the Recovery and Resilience Facility due to the pandemic.

Fresl told the mayors attending the conference that this meant twice as many opportunities as well as twice as much financing and risk on their part.

Towns cover around 3% of land area but generate more than 70% of the total emission of greenhouse gases. The Horizon Europe mission for climate neutral and smart cities has defined a goal to have at least 100 climate neutral cities by 2030.

The president of the Association of Cities, Zaprešić Mayor Željko Turk, told mayors to be bolder because they would never again have so much money at their disposal or responsibility and challenges.

He noted that many cities had made significant progress in digitalising their administration and making their accounts transparent, as well as in kindergarten enrollment and smart solutions for environmental protection.

For more, check out our dedicated politics and lifestyle sections.

ZAGREB, 16 Dec 2021 - Ten contracts worth HRK 116.4 million were signed on Thursday to finance water management projects as part of the 2021-26 National Recovery and Resilience Plan.

The contracts were signed at the Hrvatske Vode water management company by Economy Minister Tomislav Ćorić and Hrvatske Vode general manager Zoran Đuroković.

They said these ten contracts were the first step in utilizing National Recovery and Resilience Plan funds.

The contracts concern the allocation of grants from the EU Recovery and Resilience Facility to finance investment in public water supply and drainage projects. A total of 70 projects were submitted and the maximum amount available for allocation is HRK 800 million.

Contracts were also signed on the national component of co-financing the projects.

One of the signatories is the Pula city waterworks. Their project is the most valuable at HRK 44.5 million, with the grant amounting to HRK 28.5 million. The company's director, Dean Starčić, said the money would be used to reconstruct and construct pipelines.

(€1 = HRK 7.5)

For more, check out our dedicated politics section.

ZAGREB, 17 Sept 2021 - Croatia will soon receive over €800 million to start implementing projects from the National Recovery and Resilience Plan, Prime Minister Andrej Plenković said in Athens on Friday after meeting with European Commission President Ursula von der Leyen.

"We expect in the days ahead a concrete decision on the payment of an advance of more than €800 million to start implementing the projects we submitted," he said.

In July, the Commission approved Croatia's €6.3 billion National Recovery and Resilience Plan, which could increase GDP by 2.9% and create 21,000 jobs by 2026.

"That programme should facilitate a faster economic recovery and a clear development course, the so-called double transition, both digital and green," said the prime minister.

He and von der Leyen also talked about COVID-19, post-earthquake reconstruction, the introduction of the euro in Croatia and Croatia's Schengen membership bid.

Plenković said she "confirmed that the European Commission stands strongly by Croatia's ambition to introduce the euro as its currency at the beginning of 2023."

He reiterated that Croatia had met all the Schengen entry requirements and expected to join the area in 2022. "The Commission supports us. We want to get the consensus of the other member states as well, so that we achieve this second goal of deeper integration within the EU next year."

Plenković, Mitsotakis talk economic cooperation

Ahead of an EU MED9 summit, the Croatian prime minister met with the host, his Greek counterpart Kyriakos Mitsotakis.

Greek-Croatian trade is increasing and now stands at €300 million. Plenković said there was room for increasing it. "We are pleased that the Greek company Avax is among those building the access roads to Pelješac Bridge. Trust between economic operators increases that way."

He said talks on the Greek airline Aegean's interest in a strategic partnership with Croatia Airlines were expected to be "renewed" in the months ahead.

Croatia is grateful for Greece's help after the December earthquake and Greece appreciates that Croatia sent planes and backup to fight the wildfires this summer, Plenković said. "Our team was there seven days. They appreciate that very much, it was the biggest wildfire they had in recent years."

For more on politics, CLICK HERE.

ZAGREB, 24 Aug, 2021 - In its latest publication, focusing on a functional and sustainable local government in the 2021-2026 National Recovery and Resilience Plan (NPOO), the Institute of Public Finance (IJF) says the plan envisages further decentralisation but fails to define any strict deadlines.

"The government has drawn up a plan of national recovery that also envisages the reform of local government. The European Union has supported the plan and is willing to finance it. The plan should definitely be welcomed because in Croatia, which has a large number of local government units with a very small number of residents and very low revenue, their functional and real merger has been long awaited. But since we have already witnessed such plans and projects that have not been implemented, it is necessary to soon define what this plan lacks - firm deadlines for all planned subphases," says the author of the publication, Katarina Ott.

She notes that a functional and real merger of local government units is more than necessary, considering the country's large number of local government units, with about 50 having fewer than 1,000 inhabitants, and the drastic differences between them, both in terms of the population size and revenue.

Ott says that it is not true that local government units are not willing to change and improve, recalling that since 2015 the average budget transparency of all local government units had improved from grade 1.8 to grade 4.5.

"In 2015, only one percent of local government units made their budgets public and in 2021 as many as 80% did so," she said.

The €6.3 billion National Recovery and Resilience Plan envisages promotion of public administration efficiency, including a functional and sustainable local government and investments in its further optimisation and decentralisation through functional mergers, which is estimated to cost HRK 21.6 million, Ott says, noting that the plan lacks firm deadlines for the planned subphases and services.

She also believes that an additional cause for concern is the fact that there is still no official information on a survey by the Public Administration Ministry on the optimisation of local and regional government, which should have been completed and serve as the basis for the reform.

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

ZAGREB, 26 July 2021 - EU finance ministers on Monday confirmed the positive assessments of national recovery and resilience plans for another four member states, including Croatia, and initiated written procedure for their approval.

Excellent news for four more member states – Croatia, Cyprus, Lithuania and Slovenia. We have confirmed the positive assessments of the national plans of these four countries, Slovenian Finance Minister Andrej Šircelj said after an informal meeting of the Finance and Economic Council.

Since no decisions can be made at informal video meetings, written procedure was launched after the meeting to formally approve the national recovery and resilience plans of Croatia, Cyprus, Lithuania and Slovenia. The procedure is expected to be completed within the next few days.

On 8 July, the Commission gave the green light to Croatia's national recovery and resilience plan, worth €6.3 billion, and forwarded it to the Council for adoption.

Croatia has been allocated €6.3 billion in grants and 3.6 billion in favourable loans under the Recovery and Resilience Facility, the central element of the Next Generation EU recovery plan. It has been decided that Croatia will for now use only grants and that it may ask for loans at a later date. The €6.3 billion amounts to 11.6 percent of Croatia's 2019 GDP.

After the decision on approval of the recovery plan becomes official, Croatia will sign a financing agreement with the Commission and within two months of its signing it will receive an advance of 13 percent of the allocation, or €819 million. It is not yet known whether this amount will be disbursed in one or more tranches.

About ten days ago, EU finance ministers approved the initial batch of 12 national recovery and resilience plans (for Portugal, Spain, Greece, Denmark, Luxembourg, Austria, Slovakia, Latvia, Germany, Italy, Belgium, and France), which means that a total of 16 national plans will have been approved before the summer recess in August.

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

ZAGREB, 8 July 2021 - The European Commission on Thursday gave a positive assessment of Croatia's recovery and resilience plan, worth €6.3 billion, which could significantly boost the country's Gross Domestic Product and create 21,000 new jobs by 2026.

The positive assessment was personally delivered by the visiting EC President Ursula von der Layen to Prime Minister Andrej Plenković in Zagreb on Thursday afternoon.

The green light from Brussels is an important step towards the EU disbursing funds in grants and loans under the Recovery and Resilience Facility (RRF).

"This is an important step towards the EU disbursing €6.3 billion in grants under the Recovery and Resilience Facility (RRF). This financing will support the implementation of the crucial investment and reform measures outlined in Croatia's recovery and resilience plan. It will play a key
role in helping Croatia emerge stronger from the COVID-19 pandemic," says the Commission.

Under the European Commission's estimates, Croatia's recovery and resilience plan could help raise the national economy by 1.5% in 2021, an additional 2.5% in each of the next four years, and by 2.9% in 2026.

In the long-term, over the next 20-year period, the plan can have a positive impact of 1.1% on the growth of GDP, without the effects of structural reforms which are supposed to increase Croatia's GDP by 15% over a 20-year period, according to a statement made by an official of the European Commission at a news conference in Brussels.

€818 million to Croatia in prefinancing

After the Commission today adopted a proposal for a decision to provide €6.3 billion in grants to Croatia under the RRF, the document was forwarded to the European Council which will now have, as a rule, four weeks to adopt the Commission's proposal. The Council's approval of the plan would allow for the disbursement of €818 million to Croatia in prefinancing. This represents 13% of the allocated grant amount for Croatia.

The EC says that it "will authorize further disbursements based on the satisfactory fulfillment of the milestones and targets outlined in the Council Implementing Decision, reflecting progress in the implementation of the investments and reforms."

The bulk of the funding, which is about 700 million annually, will be disbursed in the first three years each.

Croatia's RRP has met all the criteria, such as that at least 37% of the allocations are spent on climate targets and at least 20% on digital transformation. Furthermore, none of the measures should adversely impact the environment.

"The Commission's assessment finds that Croatia's plan devotes 40% of its total allocation to measures that support climate objectives. These include reforms and investments to promote the uptake of renewable energy, energy efficiency and post-earthquake reconstruction of buildings, and sustainable mobility. Climate change adaptation measures include improved management of water resources and flood protection measures. The plan will also enhance the rich biodiversity in Croatia through the restoration of rivers, floodplains, and lakes. Investment support schemes will support businesses, including SMEs, in their green transition," according to the Commission's press release.

The Commission's assessment of Croatia's plan finds that it devotes 20% of total expenditure to measures that support the digital transition.

"This includes investments and reforms to support gigabit connectivity, the digitalization of public administration, transport, the judicial system, and higher education. It also provides for increasing the national broadband coverage to reduce the urban-rural digital divide and help businesses, including SMEs, adapt their operations to the digital environment thereby increasing their competitiveness."

Croatia's plan consists of 21 components

Croatia RRP is made up of 21 components plus a horizontal initiative referring to the post-quake reconstruction of buildings.

There are 22 measures envisaging 76 reforms and 146 investments, and all those measures envisage 371 key stages and targets.

Economy - the biggest component

The biggest component of the plan is the Economy and €3.4 billion is planned for this purpose.

Education, Science, and Research follow with about a billion euros. Health is highlighted as the third biggest component with €340 million, followed by Labour Market and Social Protection (€280 million).

Key measures to secure Croatia's green transition

When it comes to energy efficiency and post-earthquake reconstruction of buildings, renovating at least 225,000 square meters of residential buildings and 593,000 square meters of public buildings is planned with €789 million forecasts for that purpose.

Low-carbon energy transition includes modernizing energy infrastructure to connect 1,500 MW of renewable energy, supporting investments for the production of advanced biofuels and renewable hydrogen, financing innovative carbon capture and storage projects, and €658 million will be tapped for that purpose 

Croatia plans to improve sustainable mobility by upgrading railway lines, autonomous electric taxis with supporting infrastructure adapted for people with disabilities, installing 1,300 charging stations for electric vehicles, introducing zero-emission vehicles and vessels, and this allocation is set at €728 million.

20% investments support digital objectives

It envisages the digital transition of the public administration, digital connectivity of rural areas, and digitalization of higher education.

Concerning increasing the efficiency of the public sector and the justice system, the document envisages introducing new wage and work models in the civil service, incentivizing the merger of local government administrations, strengthening mechanisms for coordination and integration of public policies, improving the governance of state assets, reducing the backlog of pending cases and the length of court proceedings, and €200 million can be tapped for that purpose.

EC dismisses criticism about insufficient funds distributed to the private sector

Following objections of private entrepreneurs in Croatia that not enough funds would be directed to the private sector, an official of the EC has told Hina that instead of focusing on how much would be distributed to the private sector, it would be more useful to see how the money will be spent.

A considerable share will end up in private enterprises as they will take part in the implementation of investments and projects envisaged by Croatia's NRRP, say representatives of the EC.

As for the Rimac Automobili company, they explain that it will use funds under the Free Mobility Project.

This is a new project and does not amount to direct support to the company owned by Rimac, the EC official explained.

Commission President von der Leyen was quoted as saying that "with €6.3 billion, Croatia will be the largest recipient of the Recovery and Resilience Facility compared to the size of its economy."

Valdis Dombrovskis, Executive Vice-President for an Economy that Works for People, said that "this plan will put Croatia on the path to recovery after being hit hard both by the crisis and deadly earthquakes." The plan places a welcome focus on improving the justice system and fighting corruption. This plan will also help Croatia prepare its economy for a successful membership in the euro area, he added.

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