ZAGREB, 8 Dec, 2021 - The Croatian parliament on Wednesday passed the state budget for 2022 with projections for 2023 and 2024, with 77 MPs voting in favour, one more than the required 76, and 49 against.

Parliament upheld the government's decision to accept only nine out of 450 amendments submitted - four put forward by the ruling majority and five by the opposition.

The opposition amendments were tabled by the Green-Left Bloc, the Istrian Democratic Party (IDS) and MPs Željko Lenart (Croatian Peasant Party), Vesna Vučemilović (Croatian Sovereignists) and Boška Ban Vlahek (Social Democratic Party). The total value of the amendments is HRK 11 million, which the opposition considers insufficient.

Based on the opposition amendments, funding has been increased for the provision of housing for victims of domestic violence, the renovation of the Euphrasian Basilica in Poreč, the Croatian Library for the Blind programme, the international promotion of agriculture and the wood-processing industry, and for the school for children with special needs in Čakovec.

The amendments put forward by the ruling majority, notably the Croatian Democratic Union (HDZ), the Croatian People's Party / Croatian Pensioners' Party group, Miro Totgergeli (HDZ) and Veljko Kajtazi (Roma minority) provide for the construction of a modular building as part of the Fran Mihaljević Hospital for Infectious Diseases in Zagreb, the restoration of the Fortress complex in Osijek, the equipping of the Bjelovar General Hospital and for the national plan for the inclusion of the Roma until 2027.

This is the sixth state budget proposed by the government of Prime Minister Andrej Plenković. It projects HRK 164.5 billion in revenues, nearly HRK 174 billion in expenditures and a budget deficit of over HRK 9 billion.

The largest increases in expenditure concern post-earthquake reconstruction, social welfare and the pension system.

"We want this budget to speed up growth, economic transformation and structural reforms as well as to strengthen our resilience and foster our deeper integration with the European Union," Plenković said while presenting the budget in Parliament.

He said that the focus would be shifted from crisis management to competitiveness and job creation.

The budget is based on the encouraging trends of economic recovery, the expected GDP growth of at least 9% in 2021, the successful tourist season and exports growth.

The government wants to continue to manage public finance responsibly. Next year it plans to bring down the public debt to GDP ratio to 80.7% and the general government deficit to 2.6%.

Macroeconomic projections for the next two years anticipate Croatia's entry into the euro area, which, along with membership of the Schengen passport-free travel area, is one of the two strategic goals of deeper integration with the European Union.

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ZAGREB, 1 Sept, 2021 - The HEP national electricity provider paid HRK 840.6 million of last year's annual profit, into the state budget, HEP said on Wednesday following a decision by its general assembly on the distribution of its 2020 profit.

The decision on this contribution to the budget was made based on a government decision on the amount, method and deadline for state-owned companies, who are obliged to pay 60% of their 2020 profit after tax into the state budget.

HEP said in a press release that despite the unfavourable business circumstances in 2020, it had generated a profit amounting to HRK 1.4 billion. Based on the assembly's decision, which was held at the end of August, HRK 70 million will be set aside as legal reserves, while HEP will retain HRK 490.3 million of its profit and as mentioned earlier, HRK 840.6 million will go to the state budget.

HEP noted some of its investments during 2021, highlighting the Kosinj hydroelectric project which the government declared a strategic investment project n July. Together with the Senj 2 project, these are the two largest investment projects for HEP since Croatia's independence. The Senj 2 project is valued at HRK 3.4 billion and will produce 412 megawatts (MW) of electricity into the grid.

(€1 = HRK 7.5) 

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ZAGREB, 27 Aug 2021 - Finance Minister Zdravko Marić said on Friday that he could be pleased with the state of the budget and that it was in line with expectations, with some tax revenues exceeding them, such as VAT, which outperforms its 2019 level since the beginning of the year.

As the level of employment has been preserved, and even increased, Marić is also pleased with the amount of paid contributions for pension insurance.

He underscored again that the key to the sustainability of public finance lay on state budget expenditures, on which great emphasis was placed.

Asked by the press whether the government had a clear reform plan on the table, for instance, for health care, which is a great burden on the budget, the finance minister recalled the National Recovery and Resilience Plan (NPOO) had been adopted and it listed reforms in various segments.

The health care reform, Marić said, should go beyond what is written in the NPOO, because that is a more comprehensive process which everyone knows is needed, Health Minister Vili Beroš is working on it, and the entire package of measures should be presented to the public by the end of the year.

Asked about job-retention grants for entrepreneurs, Marić recalled there were conditions for those grants, such as a drop in revenue, so those grants were not crucial for a significant part of businesses. However, he added that one always had to be braced for any negative surprises.

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ZAGREB, 8 April, 2021 - The State Commission for Supervision of Public Procurement Procedures (DKOM) received 1,194 appeals in 2019 and paid HRK 17 million into the state budget in respect of fees for launching appellate proceedings, which is 6.8 million more than the funds allocated for the Commission's work, the Croatian Parliament was told on Thursday.

The figures were presented by the State Secretary at the Ministry of Economy, Nataša Mikuš Žigman, while introducing amendments to the DKOM Act governing the rights and obligations of the Commission members.

The DKOM deals with appeals in public procurement procedures, grants concessions and selects private partners in public-private partnership projects. It has nine members, including a president and two vice-presidents, and they are appointed by parliament at the government's proposal for a term of five years.

The statutory deadline for processing cases is 30 days, and the Commission's average is 27 days, Mikuš Žigman said, adding that cases concerning the absorption of EU funding are dealt with in a shorter time because they are given priority.

The total value of public procurement is about HRK 43 billion annually, and between 47 and 53 percent of appeals are granted, MPs were told.

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ZAGREB, 25 January, 2021 - Media outlets received at least HRK 10 million from the state budget in 2020, with the Styria newspaper publisher and Narodni Radio, Catholic Radio and Extra FM radio receiving the most funding, according to data from a study by the portal Media Daily.

The head of research at Media Daily, Zoran Kovačić, has told Hina that the aim of the analysis was to transparently give information on how much money each media outlet received for the services it performed for a particular ministry, state agency, state office or court.

According to data on national and regional daily newspaper publishers, total revenues were HRK 6.65 million, down 3.53% in real terms compared to 2019. Daily papers received money from 34 state budget-related sources. Six publishers received the largest amount from the State Electoral Commission, and only one from the Agriculture Ministry.

The Hanza Media company received the most money, HRK 2.31 million, followed by Večernji List daily, which received HRK 2.29 million, nearly 15.3% less than in 2019. 24sata, which is part of the Styria media company like Večernji List, received slightly over HRK 750,000 last year. Thus the Styria media company's outlets received more than HRK 3 million from the state, which is the largest amount for a newspaper publisher. In addition to them, Glas Slavonije received nearly HRK 600,000, Novi List about HRK 490,000, while Glas Istre and Zadarski List received much less money from the state -- about HRK 220,000 together.

As for radio broadcasters, Narodni Radio received the most, HRK 598,000, followed by Antena Radio (HRK 495,000), and Catholic Radio (HRK 381,000). The first two radio broadcasters received 86% and 74% less state funding respectively in 2020 than in 2019, while Catholic Radio received 41% more. However, Extra FM was the biggest winner in 2020, as it received HRK 219,000, or 448% more than in 2019, while the AMM (All Market Media) agency received over HRK 125,000, or 557% more than in 2019.

On the other hand, only four national web portals received state funding in 2020, and that was only HRK 61,312. The Dnevno.hr website received slightly more than HRK 25,000, or as much as 548% less than in 2019. Direktno.hr received only HRK 8,000, or 932% less, while Narod.hr did not receive anything. The Index and Telegram web portals, which did not received state funding in 2019, were given HRK 15,500 and 12,817 respectively in 2020.

According to Kovačić, the more money the state gives to media outlets, the more they focus on reporting and the less on research.

He thinks that the reduced funding is a result of Agriculture Ministry's smaller budget, as it spent more money from EU funds in 2019, and of fewer events being organised by media outlets.

Kovačić says that the Media Daily team processed "raw" data obtained from the state treasury.

This study is related to money from the state budget, and it is important to note that media outlets receive money from state-owned and public companies, cities and municipalities, as well as local companies, agencies and tourist boards. In addition, a large number of electronic media outlets receive money from the fund promoting electronic media pluralism and diversity in the amount of 3% of the Croatian Radio and Television licence fee, while print media outlets have benefitted from the VAT rate being reduced to 5%, the study said.

Croatian taxpayers are financing new expensive Audis for three parliament vice presidents. The monthly payment for each car equals the average Croatian citizen’s take-home pay. The brand-new cars were delivered in December 2019, came with 60-month contracts and a monthly installment of 5541 HRK (744 EUR) per car.

Three of Five Vice Presidents Accepted Audi A6

Three of the five deputies in Croatian Parliament accepted and are driving brand new Audi A6 cars, the Croatian Parliament press office confirmed to Hina. The new cars were offered to four vice presidents, as Božo Petrov (Most) had refused an offer to use an official car earlier.

Željko Reiner (HDZ), Furio Radin (NZ) and Siniša Hajdaš-Dončić (SDP) accepted state-funded Audi 6 luxury cars.

Three Vice Presidents accepted the luxury cars: Željko Reiner (HDZ), Furio Radin (NZ) and Siniša Hajdaš-Dončić (SDP). However not Milijan Brkić (HDZ) kept a previously financed Škoda Superb. Unofficially, Brkić will continue to use the official Škoda Superb, rejecting the new official Audi A6, a model purchased for the vice-presidents less than a year before the end of their terms, according to Novi List on January 15, 2020.

Petrov Does Not Want to Spend State Funds on Most

"I do not want to spend the financial resources of the state, or of all taxpayers, for Most’s party needs," explained Petrov, the only vice-president of Parliament who is also his party's president, in his official car waiver. The official car, he says, was returned a year ago, in January 2019, at the beginning of the European Parliament election campaigns, and he maintained this position during the presidential election campaign.

Božo Petrov (Most) refused Audi A6 and Milijan Brkić (HDZ) will keep state-financed Škoda Superb.

"It makes no sense for me to go around the country in a car which belongs to the state, and use it to promote the objectives of Most," Petrov said explicitly.

Parliament has not revealed the cost of the cars. However, they confirmed that the new cars were delivered in December 2019 after 60-month contracts were signed with a monthly installment of 5541 HRK (744 EUR) for each car. Multiplying the monthly payment by 60 months totals 332,460 HRK (44,654 EUR) for each car. Multiplying that total by three comes to a 997,380 HRK (133,961 EUR) bill for Croatian taxpayers to provide Reiner, Radin and Hajdaš-Dončić with luxury cars.

Vice Presidents Not Asked Before UZOP Audi A6 Procurement

The parliament deputies were not consulted before the new cars were purchased according to the press office statement. And parliament itself does procure them, nor does it manage the fleet for its own needs or those of parliamentary officials.

"These affairs are the responsibility of the Ureda za opće poslove Hrvatskog sabora i Vlade (Office for General Affairs of the Croatian Parliament) and the Government, which also manages the transportation for parliament officials, the government and all its offices, as well as the transportation of foreign delegations and protocol programs," the parliamentary press office explained regarding UZOP duties.

From 2014 to March 2019, UZOP had a “certain number of vehicles” at their disposal which were leased to serve the needs of users and the beneficiaries. These vehicle procurements are based on a public procedure and conducted by the Središnji državni ured za javnu nabavu (Central State Office for Public Procurement) and the framework agreement effective 2013.

In 2018, one year prior to the expiration of this contract, UZOP reported the need to procure new cars through financial and operational leasing to the Central State Office. They specified the car classes prescribed by the government and parliamentary decision on the conditions of use for official cars, mobile phones, etc. and guidelines for fleet management.

According to the decision, the vice presidents of the parliament have a right to use an official upper middle-class passenger category auto, according to the parliament statement regarding the length and details of the car procurement process.

Škoda Superb with a 202,343 HRK (27,178 EUR) price tag.

UZOP Purchased 18 Škoda Superb Autos for Croatian Parliament

Since the public procurement procedures for new vehicles were not completed by end of March 2019, and the older purchased autos under previous contracts had to be paid off, several cars were rented for the interim. Those rentals ended on July 15, 2019 when 18 middle-class Škoda Superb cars were purchased with financial leases.

The parliament press office stated that the complete procedure for the procurement of cars, 27 different classes in this case, was according to regulations, to serve the needs all institutions under the jurisdiction of the UZOP and the Central State Office, which provided the technical specifications for the required car classes (engine power, accessories, etc.)

The Central State Office reviews and evaluates the tenders, makes the selection, and then concludes the framework agreement. Neither parliament, UZOP, nor future users of official vehicles influence this process, the press office emphasizes.

New Audi 6 Cars Shipped in December 2019

The procedure for procuring the Audi A6 cars was published in the Narodne novine (Official Gazette) on September 18, 2018, the car selection decision was made on May 2, 2019. The vehicles were delivered in December 2019.

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The Croatian state budget has been half filled by tourist revenue generated by foreigners during the first 9 months of 2019, marking an increase when compared to the first 9 months of 2018. While this marks a considerable increase, the source of the money is worrying indeed.

As Morski writes on the 31st of December, 2019, according to the Croatian National Bank (CNB/HNB), in the first nine months of 2019, foreign tourist revenues amounted to a massive nine billion and 447 million euros in total, representing a nine percent increase, or 769 million euros, over the same period last year.

''This year, we achieved 5 percent more tourist arrivals with an increase of 9 percent. Over the next year, with the introduction of the "Croatian Tourist Card" (Cro card), which we estimate will increase revenues by an additional 1.35 billion kuna, I'm sure that we will lay the groundwork for further enhancing the value of our tourist offer and thereby further emphasise ourselves on the world tourism market,'' said the Minister of Tourism, Gary Cappelli, when announcing the results on 2019's tourism revenue.

In the third quarter, that is, during July, August and September 2019, revenues from foreign tourists amounted to an impressive six billion and 638 million euros, which represents a nine percent increase, or 553 million euros, when compared to the same period last year's revenues of six billion and 85 million euros during that same time period.

It is not bad news that Croatia has enjoyed a steady 9 percent increase, but it is worrying that this is half of the Croatian state budget as a whole, and it has been generated by foreign tourism.

When converted to Croatian kuna, foreign tourists left 71.3 billion kuna in Croatia during the first 9 months of this year, while the total Croatian state budget stands at around 140 billion kuna.

Unfortunately, tourism, despite being Croatia's strongest economic branch, still cannot possibly compete with the production and exports industry. Any stronger influence on tourism development would throw Croatia to its knees, so this self-praise done by Minister Capelli should be taken with a dose of rational reflection and concern.

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