Nenad Bakić talked to Branko Podgornik from Novi list about the year he spent as the President of the board of Varteks.

Nenad Bakić, a prominent Croatian entrepreneur, probably had one of the hardest years of his life in 2019. He was the President of the board of Varteks, and has dedicated almost all of his energy to saving the company from failing, and it seems that he's succeeded. In the last couple of days of 2019, he was showered with truthful and touching messages of gratitude on social media. In them, the workers of the company with the hundred years of tradition thanked him for his hard work and efforts, as he invested his money and business know-how to save more than a thousand jobs, made sure people were paid on time and brought some new zest into a company that was sliding into the abyss.

He's been known as an innovative entrepreneur for two decades now, he started the "Moj Posao" website, started and financed the Institute for Youth Innovation in Croatia, and is a donator and investor in many companies in Croatia. For his extraordinary undertaking from last year in Varteks, he has received many thanks and acknowledgements, not just from the workers and citizens of Varaždin, but also from the members of the business community and the wider public. The company, in which Bakić managed to buy a 47 percent share, is gradually recovering from the years marked by acquired losses. The metamorphosis of the company is still not complete, but the worst is behind it.

After the successful operation of salvaging Varteks, Bakić has withdrawn from the position of the President of the board, which he held for a year. He was replaced by Tomislav Babić, who was the member of the board of the company. Bakić returns to the Supervisory Board, where he will continue to work to revitalise one of the highest quality textile companies in Croatia and the region and allow it to grow back to its old glory.

Bakić says that his entry into the company was an accident.

''Some ten years ago, as Varteks was going through one of many crises, then President of the board approached me and suggested I invested in their stocks. He was afraid of aggressive buyers, and he wanted some investment into the company.

As an investor, I followed the underrated stocks, which might have a very bad or a very good perspective. If your portfolio is wide enough, your good investments can cover some losses. That's how I became a small shareholder in Varteks. First I had 6 percent, then I kept buying on the market and got to 17 percent two years ago. It wasn't a significant investment for me, as the price of the stock was very low.''

Asked if he knew the situation within the company, Bakić replies that he wasn't interested in that then. The company was doing poorly, and in time he realised that over the last 13 years, the company's losses amounted to over 800 million kuna. In former Yugoslavia, Varteks was one of the biggest real estate owners, they had over 200 stores. In order to cover those losses, the real estate was constantly being sold.

In 2017, an English investment fund wanted to invest in Varteks and turn things around and make their business healthy again. In the last moment, that fund withdrew, and the Board repeated their call for investment, saying that they'd need between 20 and 40 million kuna in order to stabilise the company. Bakić decided to invest 20 million kuna at that point, as he was already an important minority shareholder, but he had a responsibility toward the company, to help turn it around.

After the investment, he saw that the situation was much worse than what the management was saying. It was almost destroyed, it had no capital, and no merchandise on the shelves. The fashion component, important for this industry, was neglected, as was the selling network. Work done for foreign partners led to losses. Right after he invested, it turned out that there wasn't even enough money to pay the workers and suppliers.  The banks wouldn't give Varteks any more loans, so Bakić had to provide his own money – during 2018 he loaned the company more than 30 million kuna on the short term, without interest. He still hopes he'll be able to have that money repaid someday.

Bakić says that they tried to work with the former management, but that wasn't working out very well, and the company was sinking even further. In early 2019, he personally took the position of the President of the board for a year, to try to turn things around. The difficult situation continued, as Varteks needed more capital, and the banks still refused to give loans. He wanted Varteks to start producing more, and not just work as subcontractors for foreign companies. But, the company needed more money to start that cycle, so he loaned more of his money in 2019, around 15 million kuna. The good news is that the latest loan was provided six months ago.

The situation with textile companies in Europe was very difficult, and some of the European companies managed to profit from the European Union funds. However, in the 2014-2020 period, those funds were unavailable to Varteks, as only small and medium companies in Croatia could be financed from the European Union funds. Bakić says that it was a wrong decision by the government because the big companies carry the progress, which then, in turn, helps the SMEs. That's how the Bulgarian, Polish or Portuguese textile industries managed to restore their capacities, but Croatia was not able to.

He recognised the tradition of a hundred years in Varteks and the quality of their products. However, over the past decade, even that tradition of quality had been slipping away – their fashion was not as attractive, and the quality of the materials was reduced.

International brands took the lead on the Croatian market, beating Varteks in sales up to ten times. Bakić's strategy was to radically increase the quality of the material for the clothes, bring back the top materials by Italian producers to create recognisable products, such as suits. The second prong of the strategy was to re-establish their fashion, and they hired Martina Vrdoljak to be their creative director. Fashion is changing with increasing speed, as the producers now need to create nine or ten collections per year. To be able to provide that rapid-fire exchange of collections, much of the production is returning to Europe, mostly to Turkey. They want to become a part of that trend.

They also keep providing clothes for the Croatian army and police, and many other clients. It's a marginally profitable operation, and isn't creating problems, so they haven't focused much on that.

The results of all those efforts are amazing. Their retail income will be increased by between 50 and 70 per cent, and the company will have positive results overall. All of that happened in the year when the company was basically clinically dead, of which Bakić was not aware when he became the CEO. Bakić is, however, still not ready to celebrate victory, as there are numerous risks ahead. He adds, though, that if this transformation of Varteks succeeds, if it's possible to save a company from such an uncompetitive industry that was on the brink of failure, then it proves that almost anything is possible in Croatia.

Bakić says that they're extremely active online, especially on social networks. They also opened an online store, and during November, 7 percent of Varteks' sales came through that webshop. That's a remarkable result. Many Croatian celebrities promoted their suits in their campaign "Imperfect men in perfect suits" etc.

They also bought an old bus and turned it into a fashion store, and it has been travelling around smaller towns in Croatia for nine months now. It's possible to try something on in the bus and buy it using your phone, and the size and colour you want will arrive to your address in just a couple of days. That's how they reach buyers in rural Croatia, and also promote the use of the internet for shopping. All of that shows that they've managed to restore faith in the Varteks brand. If this trend continues, they'll be back in the safe zone in 2020.

They've also changed many things within the company, as they hired some new managers and changed the managerial culture which then brought new, positive energy. Workers in the textile industry are never paid well enough; however, but in Varteks the employees don't work for minimum wage, as they get some bonuses. Those bonuses were increased in the last year, and the employees didn't even demand that raise. Bakić wants the employees of Varteks to work for more than minimum wage, as soon as that is possible and the company is profitable. He promised the workers that not one kuna of dividend will be given to the shareholders, as long as their salaries are that low.

Read more about doing business in Croatia in TCN's dedicated "Business" section.

With the rise of populism and hybrid forms of authoritarianism, blows to various forms of human rights and freedoms are sadly on the rise worldwide. What does the Human Freedom Index 2019 have to say about Croatia's improvements and failings?

As Poslovni Dnevnik writes on the 10th of January, 2020, rather unsurprisingly, countries such as Angola, Venezuela and Tajikistan are among the countries with the largest decline in freedom levels last year, writes Tanja Porcnik, a senior fellow at the Canadian Fraser Institute and co-author of the Human Freedom Index.

The good news is that freedom is progressing and expanding in many societies. Among them is Croatia, which ranks among 25 percent of the world's freest countries. Recently, the fifth annual The Human Freedom Index was published. It is the most comprehensive measurement of freedom ever made for a large number of countries around the world.

Within the index, author contributor Ian Vásquez and Tanja Porcnik cover 162 countries and take into account 76 indicators of personal and economic freedom, using data from 2008 to 2017, the last year for which comparable data is available. Because of their fundamental value and their contribution to human well-being, liberties deserve the strongest defense. The report was published in collaboration with the Canadian Fraser Institute, the Cato Institute of the United States, and the German Friedrich Naumann Foundation for Freedom.

In the recently released Human Freedom Index, New Zealand and Switzerland are still the freest countries in the world, while Venezuela and Syria come last place. The ranking of the other selected countries is as follows: Germany (8th), Sweden (11th), United Kingdom (14th), United States (15th), Japan (25th), Chile (28th), France (33rd), Poland (40th), Argentina (77th), Kenya (79th), Mexico (92nd), India (94th), Brazil (109th), Russia (114th), Turkey (122nd), Saudi Arabia (149) and Iran (154).

Where are the countries of the former Yugoslavia and how are they adding up? The freest country of them all is Croatia's neighbour to the north, Slovenia (35), followed by Croatia (37), Montenegro (53), Bosnia and Herzegovina (55), Serbia (58) and the least free is considered to be North Macedonia (65).

The level of human freedom in the world average also decreased in 2017, continuing the downward trend from 2008 to 2016. At the country level, human freedom has been decreasing in most countries since last year, in as many as 88 of them, while it is increasing in 70 countries. Croatia marks the 20th largest increase in its freedom in the world, from 7.72 (43rd place) in 2016 to 7.86 (37th place) in 2017. Prior to this significant jump in the Index, Croatia was constantly in the second quarter of the countries covered. In the latest published report, as stated, Croatia is ranked first among 25 percent of the world's freest countries.

While Croatia has increased both personal and economic freedoms in the last ten years, its economic freedoms have gone from 73 to 56. Thus, Croatia has reached the levels of Poland and Hungary in the Human Freedom Index and is now far closer to the likes of Slovenia and Slovakia.

What progress has Croatia therefore seen in terms of increasing economic freedom during the first year of Prime Minister Andrei Plenkovic's reign according to the latest Human Freedom Index? It is certain that steps were naturally carried over from 2016 when Prime Minister Tihomir Oreskovic led the Croatian Government.

Firstly, with regard to the regulations, Croatia, for example, lowered the restrictions on the sale of real estate relating to the number of days and costs required to register and transfer ownership; reduced the financial cost of obtaining a building permit; maintained its commitment to one-stop shop registration of businesses, not only to save time and money but also to increase transparency and accessibility of the procedure itself; it lowered the risks associated with the administrative costs of business for the regulatory environment, including reducing inefficiencies related to regulatory compliance and red tape.

Second, in relation to the size of the country, Croatia reduced the volume of government borrowing in relation to private sector debt, lowered the share of public investment in total investments in the country and lowered the level of ownership and control of capital in the industrial, agricultural and service sectors.

Third, in the context of monetary parameters, in light of the stable monetary policy of the Croatian National Bank (CNB/HNB) and the pressure on the devaluation of the kuna to boost exports, Croatia also lowered its average annual money supply growth and standard deviation in inflation.

However, not everything went in the right direction for Croatia in 2017, as evidence by the Human Freedom Index.

The state of the rule of law in the country has deteriorated even more than before, giving Croatia worryingly low results in the area of ​​judicial independence, the impartiality of courts, the protection of property rights and trust in the police in general. The inability to strengthen the rule of law is in fact the problem of all former socialist economies in the Balkans.

Finally, the evidence shows the importance of freedom for development. Indeed, the Human Liberty Index report shows a strong correlation between the level of freedom and income. The world's freest countries, which are in the first quarter of the countries covered, enjoy higher per capita income (40,171 US dollars) compared to countries in the last quarter (15,721 US dollars).

Moreover, when we consider economic freedom, it is known that there needs to be a positive relationship not only with national income but also with economic growth, living standards, economic equality, poverty reduction and a number of desirable social and economic outcomes. With this in mind, apart from increasing freedom, people living in Croatia can expect to experience other long-term positive trends that will allow them to seek their own opportunities and make their own choices.

Make sure to follow our dedicated business, politics and lifestyle pages for more.

ZAGREB, January 10, 2020 - In 2020 the Croatian National Bank (HNB) will have additional macro-prudential measures at its disposal and it will impose them on commercial banks to maintain the financial system's stability, and the exchange of data on customers' creditworthiness will be reintroduced, according to some of the draft acts that are to be adopted.

In late 2019, the Finance Ministry put to public consultation a set of draft acts adjusted to the European acquis within the context of steps which should be taken on Croatia's journey towards the euro area. The public consultation lasted until this week.

One of the steps is a letter which Croatia sent in 2019 considering its admission to the Exchange Rate Mechanism (ERM II).

The letter of intent expresses Croatia's intention to enter the exchange rate mechanism and to implement 19 measures in six areas in the next 12 months on the path towards the introduction of the euro as the official currency.

In this regard, Croatia is set to amend the legislation on credit institutions to enable the exchange of data on customers regarding the assessment of their creditworthiness.

Some 15 years ago a score of commercial lenders operating in Croatia set up a register of credit obligations of customers (HROK) enabling those lenders to exchange information on credits taken by customers.

However, the General Data Protection Regulation (GDRP), introduced by the European Union in mid-2018, eliminated this register.

The latest amendments provide for legal security in the exchange of information between banks for the purpose of assessing their customers' creditworthiness.

Also, one of the novelties is that it will be the HNB and not the Croatian Banking Association that will calculate the national reference rate of the average cost for financing the banking system. The abbreviation in Croatian for this rate is NRS.

The outcome of a comprehensive stress test for five leading Croatian banks, conducted by the European Central Bank (ECB), will be announced in May.

The set of amended laws will enable the Croatian central bank to impose measures if they turn out to be necessary in accordance with the stress tests' outcome.

More economy news can be found in the Business section.

ZAGREB, January 10, 2020 - European Commission President Ursula von der Leyen on Friday warned Great Britain that it could not have it all in negotiations on future relations with the EU after Brexit and that it had to decide how close it wanted to stay to the EU, which it will leave on January 31.

We were clear regarding access to the common European market - it is not the same if you are a member or not, the EC president said at a news conference in Zagreb.

We want to stay good friends, neighbours and partners but we must find a good balance between divergence and close relations with the single market, she added.

British Prime Minister Boris Johnson is confident that the agreement on all aspects of future cooperation with the EU can be concluded by the end of 2020, which EU officials consider unrealistic.

Croatian Prime Minister Andrej Plenković said that nothing would change for Croatian citizens on January 31. "You will be able to enter Great Britain as you have so far," said the PM of Croatia, the EU chair since January 1.

Along with Brexit, an important topic during Croatia's EU presidency will also be talks on the new European budget. "We will do our best to find a balance between rural development and cohesion on one side and modernisation on the other," said Plenković.

The older EU members, which are net contributors to the EU budget, want it to be more modest while the younger members insist on maintaining funding for the cohesion and agriculture policies.

Balance must also be found between EU bodies as the European Parliament calls for a more ambitious budget while the prime ministers of European Council members want a more conservative budget.

With Great Britain's departure, Europe will lose around €60 billion from its cash register, and the new financial perspective for the 2021-2027 period will have to take account of new European priorities such as climate change, the digital agenda and illegal migrations.

Von der Leyen and Plenković addressed reporters after a joint session of the EC and the EU chair's government, which is a tradition at the start of every rotating EU presidency.

More news about Croatia and the Brexit can be found in the Politics section.

"I'm a little confused here now, my Bero. Zoran Milanovic, president-elect, says Advent is ''pure corruption'' and yet your good friend Bastalec also held a sausage-cottage in the western part of Ban Jelacic square...'' writes Dario Jurican.

As Poslovni Dnevnik writes on the 10th of January, 2020, Dario Jurican, a filmmaker and candidate in the recent presidential election who wanted corruption for all, and not just a select few, released an open "love letter" to SDP president Davor Bernardic this morning.

Jurican wrote in the letter that Bernardic's good friend Dalibor Bastalec, secretary general of the Bandic Milan 365 Party of Labour and Solidarity, had an Advent cottage in Zagreb's main square during Advent in his sister's name, and accuses Bernardic of "being surrounded by people from such a milieu for years", ever since Zagreb Mayor Milan Bandic "was a mentor for SDP".

Dario Jurican goes on to tell Bernardic that he can redeem himself by asking Bandic to reopen the beloved Kino Europa, or it will be "over" for him. Milan Bandic is going, and you're going too, warns Jurican, indicating that he's coming for them both.

Here is Dario Jurican's ''love letter'' to Davor Bernardic, transmitted and translated into English in full:

''I'm going to call you Bero straight away. Not because we're friends, but because I've been following your thoughtful work, your craft, for many years now. Bero, I'd like to talk about Advent now, because I've had no peace from it.

We both know that your good friend Dalibor Bastalec, the one you go to the Blaskovec fire department's anniversaries with, and the one who, together with Milan Bandic, you celebrate birthdays with, had a nice little [Advent] cottage in Zagreb's main square at the time of Advent. Of course, this cottage wasn't listed in Dalibor's name, but in his sister's name, but you know full well how it goes, Bero, because you've been surrounded by people from that milieu for years, ever since Milan was your mentor in SDP. The Bastalecs had their sausage-cottage in the same place last year, as well, only the company in the background was different.

Now, I'm a little confused, my Bero. Zoran Milanovic, president-elect, says that Advent is "pure corruption" and yet your good friend Bastalec also had a sausage-cottage in the western part of Ban Jelacic square, intended exclusively for artisans with handicrafts. You, Bero are telling the story of anti-corruption in the media: "The Anti-Corruption Alliance is the need to ensure awareness that in Croatia we must actively fight corruption by all means."

Who are you lying to, Bero?

Or maybe you mean to say that Zoran Milanovic is rhetorically deceiving us? Or your SDP, who asked Bandic for an Advent report at the Zagreb City Assembly?

Now, Bero, there's something I don't understand. You're the president of SDP, and your good friend Dalibor Bastalec is the general secretary of the Bandic Milan 365 Party of Labour and Solidarity. The very same Bandic who doesn't want to give you an Advent report, and president-elect Milanovic calls it a focal point for corruption...

At the same time, Bastalec is the president of the parish pastoral council in the parish of St. Benedict in Blaskovec, for which, so that it's less difficult, Milan Bandic had a car park made and even attended the grand opening of it. He came to the opening of a car park!

As such a distinguished person, your buddy Bastalec also has a considerable tax debt to the Republic of Croatia, of 2,130,210.84 kuna.

I don't care who you plant pumpkins [hang out] with, the emperor of omissions and the king of the status quo, but I have a suggestion for you to redeem yourself:

I want you to go to your friend, Bandic's operative Bastalec, I want you hold his b*lls tightly, so tightly they flood if needs be, and to explain to him that on April the 8th, 1925, as a gift of love from the benefactor Müller, Kino (Cinema) Europa opened on Warsaw street in Zagreb, and that he has to open it again on the 8th of April, 2020. We both know that this cinema was closed without reason by your friend Bandic, without a plan. The cinema is under no renovation process, nor is it scheduled for renovation in 2020.

You will look him straight in the eye, and he'll know what to do.

If Kino Europa doesn't reopen on April the 8th, 2020, for the premiere of one movie, then Bero - it's over.

Milan Bandic is going, and so are you.

Dario Jurican, mayor of the universe.''

Make sure to follow our dedicated lifestyle and politics pages for more on Dario Jurican.

As Glas Istre/Borka Petrovic writes on the 10th of January, 2020, one incredibly brave sixteen year old girl from Pula has taken on and successfully beaten cancer.

''Instead of getting nervous about receiving my exam results in the semester of first grade in high school, I was waiting for my blood test results, and instead of reading for school, I was reading about the side effects of medicines I was going to be taking, and learning about them. As my friends swam in the sea in the summer, I was throwing up. I'm sorry I went through such a difficult period, but my illness was not only a huge burden for me, but kind of a gift, too,'' Erin says.

In the Republic of Croatia, about 150 children become ill each year with malignancies. Erin Rupčić is one of them. She found out that she had malignant Hodgkin's lymphoma at the age of just fourteen, in the final grade of elementary school. Today, the worst of the cancer is now thankfully behind her. Brave Erin from Pula went through everything she went through while being treated for cancer, the day after her sixteenth birthday was celebrated.

It was 2018, just before the spring holidays. I remember it was Wednesday, because on Friday I was supposed to perform for the senior volleyball team for the first time and I was really excited about that. After school I decided to take a little stroll around the city and I noticed a little lump on my neck. It didn't seem like a scary thing to me, but I showed it to my mum anyway, and that's when the visits to the wards of the Pula hospital began,'' Erin recalls.

After several diagnoses, from it being a simple cyst to her just having had a mere swollen lymph node, at the insistence of her parents, Erin went for more intense tests in Rijeka. After the results from the PET / CT scans caused alarm, they were followed by a biopsy and an irrefutable diagnosis - lymphatic cell cancer. Her childhood was instantly interrupted in the most unimaginable way possible, and this schoolgirl from Pula was forced to grow up much more quickly than she should have.

''I didn't even know what cancer was, I was fourteen and had never been seriously ill before. Almost all of my hair fell out after I underwent my first chemotherapy, so I decided to shave the rest of it off. First, I was a little ashamed of it, you don't see girls without any hair very often. But in the end, it wasn't that much of a problem for me. I knew my hair would grow back and that I needed to survive,'' concludes Erin, who has now beaten the disease and can return to her normal life after a difficult but victorious battle.

Make sure to follow our dedicated lifestyle page for more.

As Novac writes on the 10th of January, 2020, although there is no access to the sea, the municipality of Kastelir-Labinci in Istria has been seeing a real tourist boom in recent years. Last year, with a capacity of 2,050 beds in 431 types of tourist accommodation, it achieved as many as 90,000 overnight stays, marking an increase of 17 percent when compared to 2018. In addition, it recorded 9,500 tourist arrivals, equal to a jump of 20 percent in arrivals in 2019 compared to one year earlier.

Local portal Glas Istre writes that the reason for this boom in Kastelir-Labinci is in the new tourism development strategy for the period 2019 - 2025, adopted at the end of last year, which aims to double the tourist traffic in five years. Interesting summer events, which involve everything from culture to gastronomy to sport, are just some of the moves that prompted both the municipal administration and the local tourist board to approach the future development of tourism more thoughtfully and with more concrete plans.

One of the more important goals outlined in this strategy is the planned capacity increase of about one hundred beds per year, with the aim of increasing their occupancy to 70 days a year. This would increase the number of overnight stays at the end of the planning period from the current 90,000 to about 170,000, which is almost double, but it also wants to increase spending per night from the current 30 to 50 euros. The municipality of Kastelir-Labinci wishes to brand its tourist offer according to the principles of balanced development, which is sustainable and in harmony with nature, respecting ecological standards and with an emphasis on the authenticity of both the environment and what's in it, as well as ample food and beverage offers.

The strategy proposes a number of new types of touristic content that should increase the attractiveness of the tourist offer of the entire Kastelir-Labinci region, and some of the ideas are original in themselves on the wider Istrian regional scale. For example, the establishment of a botanical garden has been proposed, and there is even the possibility of a zoo with indigenous animals living there. These are just two of the things that could potentially be in the works for Kastelir-Labinci.

In addition, a number of trails are proposed to improve the area's cyclotourism, which has gained a lot of momentum with the establishment of a bike centre, and the desire is to improve the trekking offer or running trails through nature, as well as to arrange paths for go-karts for guests who might be adrenaline junkies.

The tourism development strategy also recommends the development of adventure and hunting tourism, followed by horse riding schools as part of health and rehabilitation tourism, and also with the possibility of equestrian sports. Excursion tourism is proposed to be further enriched by the construction of a system of observation points for the environment, and the authors of the strategy consider the area of ​​this municipality to be a convenient location for summer children's camps in a vegetatively rich and naturally diverse environment.

One of the highlights in the new proposals of Kastelir-Labinci's tourism strategy is the promotion of gastro-tourism.

A particular eno-gastronomic niche set out in the strategy is organic farming, that is, the supply of food and drink from organically produced foods. The offer of indigenous souvenirs is also something that is lacking in this area and should be developed with the incentive to open souvenir shops and themed boutiques.

Make sure to follow our dedicated travel page for more on Kastelir-Labinci and visiting Istria as a whole.

ZAGREB, January 10, 2020 - The Democrats, a parliamentary party led by former Social Democrat Mirando Mrsić, warned on Friday about the possibility of the opposition Social Democratic Party (SDP) and the ruling Croatian Democratic Union (HDZ) forming a grand coalition, calling on left-wing parties to oppose that and support a platform for a modern and open Croatia.

"Zoran Milanović's victory shows best what left parties should do to win parliamentary elections. We should come together and work together to remove from power the HDZ and the (bargaining) chips," Mrsić said, alluding to deputies making up the parliamentary group of Zagreb Mayor Milan Bandić's party.

The Democrats believe that the SDP has not recognised the importance of left-wing opposition parties rallying but has offered cooperation to the HDZ and Andrej Plenković, thus creating conditions for a post-election coalition with the HDZ.

The party called on left and centre-left parties to rally around a programme for a modern and open Croatia where competence and hard work rather than party membership would be the price of success.

"Coming together and participating in the elections together is the only way to prevent a grand coalition between the HDZ and SDP and the continuation of the plunder of Croatia," said the party.

More SDP news can be found in the Politics section.