February the 28th, 2023 - Not everything is as bleak as it might seem at first glance. Did you know that Croatian ICT companies are attracting more and more attention from large international funds?

As Marija Brnic/Poslovni Dnevnik writes, according to the analysis published in Delo, neighbouring Slovenia is quite considerably lagging behind others in development, especially in the ICT sector, while Croatia has achieved great results and Ljubljana could learn a lot from it.

Last year, venture capital investments in Slovenia amounted to ''just'' 160 million, the lowest of all EU member states. From 2012 to 2021, all of them except Slovenia experienced growth in venture capital investment, and in that period Estonia, Finland and Denmark experienced the greatest boom of all at the EU level. In terms of the value of the share of venture capital investment in GDP, Slovenia is in a very unimpressive last place, according to an analysis of the ICT sector conducted for the Ljubljana Technology Forum by Grant Thornton.

The importance of this form of investment is extremely important for encouraging the rapid development of companies that have an innovative and promising product or technology, and that have difficulty getting capital to pass that most uncertain phase. Among all the newer EU member states, Estonia has become the most interesting country for venture capital investments in technology projects, and it ranks first in the entire EU in terms of the share of these investments in its GDP.

Last year, there were 1.3 billion euros of venture capital investments in start-up companies based in Estonia, and a total of 3.1 billion euros in the last five years. In the Czech Republic, the value of these investments in the five-year period stood at an impressive 1.5 billion, and when it comes to Croatian ICT companies and those from Lithuania, investments came to more than one billion euros, the same amount as in nearby Greece.

The Slovenians single out the Estonian example as the most successful of all, because immediately after the fall of communism, that country reached for the simplification and digitisation of its often complex administrative procedures, as well as a much more simple tax system with one rate, and they were the first to open the door to digital nomads, who can request a digital identity card and access e-services, and they've already attracted more than 50 thousand of them.

Croatian ICT companies and this country's business ecosystem has been on the radar of international venture capital funds and other financial giants for some time now, even if the headlines might make one easily believe otherwisw. The latest case of Damir Sabol's incredible Photomath being taken over by Google is just one fantastic example of how much the Croatian venture capital market has grown in the past decade.

At the same time, the neighbouring Slovenians state that a considerable number of Croatian ICT companies moved their headquarters abroad after receiving money from venture capital funds, but many, such as Rimac Automobil and Infobip, have remained firmly in Croatia. Among the advantages in the development of the startup system here in Croatia, there is, for example, the exemption from paying capital gains tax when selling shares in a startup and tax relief for angel investors, and a positive effect is also expected from a fund of 50 million euros to support innovations and startups announced by the Croatian Government.

Another significant thorn in the side of Slovenia is the fact that the share of expenditure on research and development has fallen sharply from 2012 to 2021, from 2.6 to 2.1 percent, while across the rest of the EU it has increased from 2.1 to 2. 3 percent. Slovenia also lags behind in patenting and the share of high-tech industries in its GDP. Part of the blame for this lies with privatisation, because in most former socialist countries, private foreign companies entered into industrial companies and brought new energy with them.

On the other hand, the justification that high salary taxes are the reason for avoiding venture capital investments is refuted by statistics, because for example France and Belgium, which have very high wage taxation rates, are more attractive for venture capital investments than the new EU member states from across Central and Eastern Europe, with the exception of Estonia.

Slovenia, on the other hand, looks at the Estonian example as a confirmation that the country's potential for innovation and its commercialisation can definitely be developed, but with the condition that all governments adhere to that same approach and consistently implement digitalisation, and they see Croatia and Greece as countries that are successfully following the Estonian model.

For more, make sure to check out our business section.

February the 16th, 2023 - The Slovenian VC fund Silicon Gardens has its eye on Croatian startups, and Split Tech City has entered into an agreement with them.

As Josipa Ban/Poslovni Dnevnik writes, Split Tech City, the first association of the Split technology community, has entered into an agreement with the Slovenian VC fund Silicon Gardens. The fund will invest between 50 thousand and 1 million euros in Croatian startups, providing a spring in the step of many.

It goes without saying how important this agreement is for the Croatian and more specifically the Dalmatian technology scene. Toni Trivkovic, the founder and president of Split Tech City, explained that Luka Abrus, one of the founders of the Five agency, initially connected them with the Slovenian Silicon Gardens.

A fund with a different mission

"After the first contact was initially made, we soon realised that we share many values. We also like the fact that Silicon Gardens is about smart capital, i.e. capital with which the startup also receives mentoring," Trivkovic points out. The agreement, as he explained, is that Split Tech City proposes interesting Croatian startups to the Slovenian VC fund, that is, it connects them.

"After that, the Slovenian VC fund will evaluate a startup, and if someone doesn't pass, they'll receive guidelines on what needs to be done in order to make it more attractive to investors. Regardless of the outcome, the startup makes the best of the situation," said Trivkovic, adding that this cooperation will significantly improve the Split technology scene, where there weren't very many opportunities to get bigger investments in the recent past.

Cooperation with Silicon Gardens will change that. And we're talking about a different fund that was designed by the founders of startups with successful exits, that is, that were sold out of the ownership of the companies they founded. Their slogan is ''founders for founders'', and in addition to capital, they offer mentoring and contacts to startups, which gives the investment added value, i.e. smart money.

The first Silicon Gardens fund, SGF I, was founded back in 2014 by 20 private investors, who invested 300,000 euros in it. The value of the second fund, SGF II, which has existed since the pre-crisis year of 2019, stands at a whopping six million euros, and they're also about to establish a new, third fund, which will have about 30 million euros of capital in total.

That third fund, according to Kristian Asani, the head of community and programmes at Silicon Gardens, should be ready for investment this June. With its launch, as he pointed out, they're turning to larger investments across the entire region, which includes Split. "The ecosystem for Croatian startups is still in its development phase, and I'm sure that there will be good opportunities for investment," Asani points out.

Split as a tech Mecca

Trivkovic says that he hopes for the first investments in 2023, but he doesn't want to speculate when it comes to how many there will be in the end. Everything will depend on the quality of ideas and projects of Split's local startups, he says. In addition to that, he doesn't want to reveal yet whether they already have potential candidates to propose to the fund.

Split Tech City, a community that has existed since 2015, has successfully gathered together 85 companies. The founder of this technological community added that, in addition to investments, they have also agreed on other collaborations with Silicon Gardens, such as workshops for Croatian startups. "It will be a dynamic collaboration and we'll have at least two activities on an annual basis," announced Trivkovic.

With this cooperation, he also hopes to attract young technology companies from all over the Republic of Croatia, as well as the wider region, to Split. And while fifteen years ago the situation in the second largest Croatian city was such that young people moved away and even abroad due to a lack of opportunities, with the change in work trends, i.e. the possibility of working remotely, this is also changing. Split is thus becoming an increasingly common choice for a place to live. Split Tech City has heavily contributed to this turnaround.

For more, make sure to check out our business section.

January 1, 2023 - At midnight, Schengen Croatia marked its entry into the Schengen area with the symbolic removal of the plaque at the Bregana border crossing, the lifting of the ramp, and the green light for free passage at the site of the former border control, which is now going down in history. "We opened the door to a Europe without borders," said Minister of the Interior Davor Božinović in Bregana. "Tonight, he added, we celebrate a new day, a new year, a new Europe with Croatia in Schengen."

As Index writes, at the beginning of 2023, Croatia became a new member of the Schengen zone, the largest area of free movement of goods and people in the world, which includes all the members of the European Union, except for Bulgaria and Romania, Cyprus, the Republic of Ireland and four other non-EU countries: Switzerland, Iceland, Liechtenstein, and Norway.

On this occasion, on New Year's Eve, special ceremonies were held at numerous border crossings with Slovenia and Hungary, including one of the largest crossings on the Croatian-Slovenian border, Bregana-Obrežje.

Borders have stood there for too long

Minister Božinović hosted Slovenian Minister Sanja Ajanović Hovnik, while Acting Chief Director of Slovenian Police Boštjan Lindav joined Chief Police Director Nikola Milina.

"There are no more borders that stood between our neighbors and us for too long, the natural environment to which we belong both as a people and as a country," Božinović said.

He assessed that last night's act is more than the abolition of border controls: It is the final affirmation of our European identity, for which generations of Croats fought and ultimately won. He thanked the Slovenian minister and delegation for sharing moments of joy and pride. "Happy new year in Schengen to all of you!"

The Slovenian minister considered it a historical event. "Just as we symbolically set borders about 30 years ago, we are removing them now. However, this does not mean that security will decrease since we have thoroughly prepared for this moment in both countries," said Ajanović Hovnik.

After a short meeting of the ministers, at midnight, a ramp was simultaneously lifted on both sides of the border, which enabled free passage between the neighbouring countries. The lifting of the ramp on the Slovenian side was followed via a video wall.

Five minutes before midnight, the police officers at Bregana carried out the last border control, along with an appropriate gift - a teddy bear dressed in the uniform of a Croatian policeman.

In addition to the ramp, the sign with the inscription "Bergana Border Police Station" was removed, but just before that, the last report of the station chief was recorded, in which he informed the police officers to stop implementing border controls and move on to the tasks of compensatory measures.

The two countries' delegations then headed to the Slovenian side, to the area of the former Obrežje border crossing, where the chiefs of police stations and police officers thanked each other for their cooperation so far, with the symbolic removal of plaques from the police building in Obrežje. In the first 15 minutes after midnight, a dozen cars entered Slovenia without control from Croatia, greeting the assembled police officers with the sound of their horns.

For more, make sure to check out our dedicated Travel section.

ZAGREB, 15 July 2022 - A small unit of the Slovenian army on Friday started removing the anti-migrant wire fence on the Slovenian side of the border with Croatia near the small border crossing Vivodina-Krmačina and the town of Metlika.

Slovenia's Interior Minister Tatjana Bobnar attended the removal of the fence, saying that it had a great symbolic meaning.

Bobnar said that the removal of anti-migrant barriers, which Prime Minister Robert Golob described as inhumane and as not serving the purpose for which they were set up, is a sign of a change in the new government's policy towards migrants and refugees, as it has committed to the highest respect for human rights and speeding up the processing of asylum requests.

She added that around 51 kilometres of razor wire currently exists on the border with Croatia, that the army can remove 150 to 200 meters per day, and estimates that it will take at least 150 working days to remove.

"Our intention is to first remove the wire fence" and then to "gradually remove" the metal panel fence, in cooperation with local communities, she said.

About €2.5 million has been allocated to have the panel fence removed, she added.

According to data recently published by Slovenia's Interior Ministry, a total of 135,372 meters of panel fence and 60,595 meters of razor wire were erected on the border with Croatia. The wire fences were installed at the end of 2015 by the then Slovenian government, led by Miro Cerar, due to fears of the migrant crisis at the time.

The expansion of the initial anti-immigrant barriers after Cerar's government continued by succeeding governments. The razor wire fence was later gradually replaced with less hazardous panel fencing.

In September last year, the government of former Prime Minister Janez Janša donated about 40 kilometres of anti-migrant barriers to Lithuania from its stockpiles so that it could more effectively protect the 508-kilometre-long land border with Belarus. At that time, Lithuania was experiencing an uncontrolled influx of refugees who were deliberately sent across the border towards the West by the regime of Belarusian President Lukashenko.

For more, check out our politics section.

ZAGREB, 8 July 2022 - Slovenian Prime Minister Robert Golob is on a brief vacation in Croatia, recharging his batteries, which he confirmed by posting several photos from Istria and writing that the sea does miracles.

Slovenian media said on Friday Golob was collecting his energy on the coast and sharing his feelings with his followers on Instagram, where he posted a photo of a sea sunset somewhere in Croatia.

When called by journalists, Golob said he was on the Brijuni archipelago off Istria and that he was on a brief vacation.

"What a miracle a few days by the sea do," Golob wrote on Instagram.

His cabinet confirmed the prime minister was in Croatia with his family on a brief vacation and that he was soon returning to Slovenia.

ZAGREB, 6 July 2022 - Croatian President Zoran Milanović on Wednesday received Slovenian Foreign Affairs Minister Tanja Fajon, with whom he talked about Ljubljana's support on Croatia's path towards membership of the Schengen Area and the euro area, as well as the situation in Bosnia and Herzegovina.

Milanović and Fajon talked about the possibilities of further improvement of cooperation between the two countries, as well as about Croatia's entry into the euro area and the Schengen Area, for which President Milanović expects Slovenia's support, his office said in a press release.

A topic of the meeting was also the situation in Southeast Europe, notably in Bosnia and Herzegovina. With regard to the upcoming elections in that country, President Milanović reiterated his position that it was important and necessary to ensure the legitimate representation of all three constituent peoples in that country.

Milanović expressed satisfaction with Slovenia's support in the effort to secure Bosnia and Herzegovina the status of a European Union candidate, which he himself advocates, and the two politicians also discussed the security crisis caused by the Russian aggression against Ukraine.

For more, check out our politics section.

ZAGREB, 30 May 2022 - Slovenia supports Croatia's entry to the Schengen Area, Slovenia's future foreign minister Tanja Fajon said on Monday but warned that a consensus o the matter would be hard to achieve in the European Union before the Schengen policy was reformed.

Slovenia supports the expansion of the Schengen Area to Croatia, Romania, and Bulgaria but it will be difficult to achieve political agreement on that, Fajon said answering questions from the parliament's foreign affairs committee.

She added that the reason for this was "mistrust" between members of the Schengen Area that emerged after the migration crisis of 2015 and 2016, which was why five Schengen Area member states, including Austria, were still conducting tighter controls on the border with neighboring countries that were not in the Schengen Area.

"Until such time that we reform the Schengen treaty, I think enlargement to the three new countries is jeopardized. I think that we first need to create powerful trust between the member states," Fajon said.

In her introductory address, in which she presented the principles based on which she will conduct Slovenia's foreign policy, Fajon said that she will advocate consistent respect for the border arbitration agreement with Croatia, as stated in the coalition agreement between the three parties that will form the new Slovenian government, headed by Robert Golob.

However, she added that she sincerely advocates the strategy of the best possible relations with Croatia, noting that Croatia's entry into the Schengen Area and the OECD is in the mutual interest of Slovenia and Croatia.

"We have a lot more common interests than differences with Croatia, and all issues can be resolved if there is political will," said Fajon.

Fajon said that Slovenia will advocate for EU enlargement to Western Balkan countries and for dialogue between Belgrade and Priština and that it will participate more actively in that process both at the European level and at the forums of regional initiatives.

She criticized the outgoing government led by Janez Janša in reference to foreign policy over the past two years, notably its "deficient" respect for independent institutions and the media, as well as its closeness to "the authoritarian regimes" in Hungary and Poland.

Fajon added that Slovenia would once again turn to the "core" EU countries with strong institutions and respect for the rule of law. In that context, she singled out Germany, but she also mentioned France and Italy.

 For more, check out our politics section.

May the 12th, 2022 - The very successful Croatian company AKD is succeeding more internationally, having offered its solution to the neighbouring Slovenian Finance Ministry and been readily accepted for the job.

As Poslovni Dnevnik writes, for five years now, the Public Payments Administration of the Ministry of Finance has selected the Croatian company AKD and ED Solutions as the issuer of unique identification marks for unit and aggregate packaging of tobacco products as an integral part of the European Union's overall traceability system.

This is a continuation of successful cooperation because the system was first established back in May 2019, and neighbouring Slovenia then implemented the appropriate regulation (EU) 2018/574 on technical standards for the establishment and operation of traceability systems for tobacco products.

The greatest value of this system is in the information it makes available to bodies working to combat the operations of the black market, but the benefits are also reflected in the healthcare system - ensuring the easy verification of product origin, which allows for the swift removal of non-compliant products from the market.

It's worth noting that the Croatian company AKD was a leader in development processes in the European Union as a Croatian issuer, thanks to which the Republic of Croatia was the first member state to publish the official version of the system back in April 2019 and start registering business entities.

In addition, this Croatian company has established a traceability system for customs seals, alcoholic beverages, and will incorporate its knowledge and expertise and positive practices gained through successful projects to establish a traceability system for the production and distribution chain into new services in various sectors.

In the near future, the European Commission envisages the introduction of digital product passports, which will enable product labeling, identification and linking to various sources of information relevant to the circular economy and sustainability. According to CEO Jure Sertic, AKD is ready for new European Commission requirements regarding EU digital product passports which will enable end-users and customers to make better-informed decisions, increase transparency and assist national authorities in quality control and supervision.

For more, check out our business section.

ZAGREB, 27 April 2022 - In his first media interview after winning Slovenia's parliamentary election on Sunday, prime minister-elect Robert Golob said on Wednesday that the new government will strive to develop good neighbourly relations with everyone including Croatia.

In the interview with RTV Slovenia televised late on Tuesday night, Golob said that there is no need for any uneasiness following the election with regard to outstanding issues with Croatia. He reiterated that the arbitration agreement is certainly "an anchor" from which not one Slovenian government "can back out of and we too do not have that intention."

"I do not think there is any reason for uneasiness. Naturally, we will try to foster good neighbourly relations with everyone, including Croatia. However, our policy will be a little more involved in seeking a consensus and less on solo opinions of any individual," said Golob who accused outgoing prime minister Janez Janša of going it alone with regard to the EU's common foreign policy and on the international front.

Golob said that he expects the new government to start working in June and as he said, the new government will include a wide circle of experts regardless of their party affiliation.

With regard to removing the wire fence on the border with Croatia, Golob said that the first thing to do is to form a government "because the wire fence was erected by a government decision and it will be up to the government to remove it."

"I am counting on the possibility of removing it during the summer, however, some procedures take longer than we would like. In any case, I'm an optimist and believe that that will be one of the first concrete steps we will face during the summer," said Golob.

With regard to the national plan, his government intends to embark on preparing measures and reforms needed to deal with the energy crisis that could emerge in the autumn and also to prepare measures related to healthcare in case of a new wave of the COVID pandemic.

For more, make sure to check out our dedicated politics section.

March the 15th, 2022 - Krk's LNG terminal contributed enormously to Croatia's export ''cake'' last year, with neighbouring Slovenia becoming the main market for the very first time.

As Poslovni Dnevnik/Marija Brnic writes, double-digit export growth rates, published by the Central Bureau of Statistics (CBS) for the first month of this year (44 percent) and last year (28 percent), used to be just a pope dream, and although there are reasons for joy and many good developments, there isn't much space for any euphoria quite yet.

Such a percentage jump was largely due to the low comparative base, due to the coronavirus-induced lockdown in the first part of 2020 and tumbling oil and gas prices, ie the recovery of the global economy and the price jump in terms of energy costs last year.

However, the manufacturing industry has "accumulated" a record 15.4 billion euros in revenue from foreign markets and there is almost no activity that isn't now growing, and there is some good news for export statistics, too. Two events definitely marked last year, when it comes to exports - the role of LNG Croatia (the LNG terminal on Krk) and the first time in which Slovenia rose to the position of the top Croatian export market.

State statistics have recorded a real explosion when it comes to both electricity and gas exports - in just one single year the jump was as much as 421 percent, and in absolute numbers, more than a billion euros worth of the above commodities were exported.

It seems that the Krk LNG terminal contributed the most, whose imported gas quantities remained here in Croatia, and this released significant quantities of gas from other sources, primarily from Russia, which were then exported to other countries. It isn't clear from the CBS data to which countries these quantities were placed, but a visible trace of their origin is left on the import data, due to the strong growth of imports from the USA, Nigeria and Egypt.

Neighbouring Slovenia, on the other hand, ascended the export throne in the last month of last year, and judging by earlier estimates from the Croatian Chamber of Commerce (HGK), the previous item from the statistical records is also crucial for such a result. In total, goods worth 2.43 billion euros were exported to Slovenia from Croatia, which is an increase of 58 percent when compared to the previous year. Just one year earlier, exports to the Slovenes weakened compared to pre-pandemic 2019 by 5.6 percent.

The neighbouring countries of Slovenia and Croatia are very focused on each other and are, as a rule, each other's third export market, but Slovenian figures are still enviable for Croatia, despite the fact that last year they had weaker export growth and significantly higher import growth than Croatia did. Last year, Slovenian exports increased by almost 20 percent and exceeded 39 billion euros, while imports, with almost 31 percent growth, amounted to 42 billion euros. Croatia was Slovenia's fourth export market, but even with high export growth, it wasn't among the top five markets from which it imports goods.

According to the SBS, Slovenia mostly imports from Germany, Italy, Switzerland, China and Austria, and their main export markets are Germany, Switzerland, Italy, and along with Croatia, Austria. Croatia's five main customers, along with Slovenia, are Italy, which just last year began to return to the first position, which it briefly handed over to Germany in 2020, and in both exports exceed 2 billion euros, while Hungary is in fourth position, with Bosnia and Herzegovina coming in fifth.

Croatia also exports more than a billion euros to nearby Austria, and a record result has been achieved on the markets of neighbouring Serbia and across the Atlantic over in the United States. Trade is also growing with Turkey, and it is interesting to note that, contrary to earlier data, the year ended with an increase in exports to China, but also a decline in imports on an annual basis. It's worth noting that the Republic of Croatia imports the most from Germany, out of a total of 28.3 billion euros, 4.2 billion came from that country, followed by Italy, Slovenia, Austria and then by China.

In the currently two most sensitive markets, Russia and Ukraine, Croatia ended the year before the crisis with 204 million euros of exports to Russia and 58 million to Ukraine, with exports to Russia growing and being the largest in six years, while in Ukraine the placement of goods was by 0.9 percent below the level recorded back during the previous year, and those two years were record years for Croatian exports to Ukraine.

Given the events of the current war and harsh sanctions against Russia, it is certain that the figures on the import side with these warring countries will remain high for Croatia; Last year, 463 million euros worth of goods entered Croatia from Russia, and 44 million came from Ukraine.

For more, check out our business section.