Saturday, 31 December 2022

Vucedol Culture Museum and the City: Free Entry for Vukovar Residents

December 32, 2022 - Though it has been visited by more than half a million visitors from Croatia and abroad since its opening in 2015, the Vucedol Culture Museum remains one of Europe's most underrated museums. The stunning architecture, unique location, the modern exhibition and exciting events deserve all the attention. A place with a soul like that, though, will no doubt go a long way.

As Glas Slavonije writes, the archaeological site of Vučedol is one of the most significant archaeological sites in Europe. For visitors of all generations who want to experience something new, beautiful, and interesting, the Vucedol Culture Museum offers a new universe of discovery and inspiration, with an incomparable and unrepeatable combination of location, architecture, pleasant atmosphere, and, above all, archaeological and historical values presented in a contemporary way.

It is not surprising that from the day it opened, the museum became an important place in the tourist offer of Vukovar, so many domestic and foreign tourists who visit the city on the Danube do not miss the opportunity to learn something about the locality itself and the history of the area. The museum employees help with their knowledge and presentation of the exhibition. Furthermore, they pointed out that a few changes await the citizens in the first days of 2023 and shared some good news for the residents of Vukovar.

"From 1st January, entry to the museum will be free for all Vukovar residents. It is enough to present an identity card as proof of residence. During the seven years since the museum's foundation, many fellow citizens have visited us, so we would like to thank them for supporting us. Also, the people of Vukovar visit the museum together with their guests and remain the best promoters of their city", pointed out the head of marketing Darko Bilandžić.

Since its opening on June 30, 2015, the museum has been visited by more than half a million visitors, making Vucedol one of the most visited museum institutions in Croatia.

During that period, it received several awards for its work and many activities in Croatia and abroad. Not so long ago, the first international scientific and professional conference on the meaning of Vučedol culture was also held in Vukovar.

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

Saturday, 31 December 2022

May 1994 to January 2023 - An Ode to the Croatian Kuna

December the 31st, 2022 - The Croatian kuna is set to enter the history books tomorrow, after being in use since May 1994 in its modern (current) form. As we prepare to bid farewell to the Croatian national currency, let's look back on its history.

Subdivided into those irritating little lipa coins, 100 of them to be exact, the Croatian kuna (coded as HRK) is minted at the Croatian mint and sent out into the country by the Croatian National Bank (CNB). The design of the Croatian kuna banknotes were by Vilko Ziljak and Miroslav Sutej, and the first series of these banknotes were dated on October the 31st, 1993. There was once even a five kuna note, which has been withdrawn since 2007.

Meaning marten (a mink type creature), the kuna's roots go back to the exchanging of marten pelts (furs, skins) back in medieval times as a form of payment for goods and services. Lipa, those small silver and golden coins which end up in everyone's back pockets and left on cafe tables because nobody really knows what to do with them, draw their name from the linden tree. These trees were planted in and around Croatian market places during the early modern period.

A brief look into the deeper history of the kuna reveals the importance of martens and their pelts back during, you guessed it, Roman times, where these pelts were collected as a form of tax. These pelts were sought after and carried a very high value, and the Croatian word, marturina, comes from precisely this. Foreign currencies and means of trade and payment were in use across Croatia for many years, but by the time 1939 rolled around, the Banovina of Croatia planned to introduce its own currency alongside Yugoslavia's dinar. A couple of years later in 1941, under Ustasa rule as the Independent State of Croatia, the Croatian kuna was born, then called the Independent State of Croatia kuna. This was the means of payment in Croatia until 1945, when it was replaced with the dinar.

Fast forward to the turbulent 1990s, Croatia was engulfed in the strife of the breakup of the well and truly failed experiment of Yugoslavia and the Croatian War of Independence broke out (Homeland War/Domovinski rat). Back then, the Croatian dinar, a somewhat short-lived currency was in circulation here, introduced in 1991 and lasting only until the final month of 1994. Then came the Croatian kuna as we know it, tied to the German mark from the very beginning.

Of course, there were those who weren't fans of calling it the Croatian kuna because the name was coined (no pun intended) by the Independent State of Croatia and was in circulation during 1941-1945, a time many people preferred to try and forget. Other names were suggested as a result, including the banica (the wife of the viceroy) and the kruna (crown). The idea that the kuna would echo back to Ustasa rule and as such be a controversial name was dismissed, and the Croatian kuna remained with its rightful title. 

The CNB's policy was keeping the Croatian kuna's fluctuations with the bloc's single currency stable, as the initial expectations for Croatia adopting the euro officially, which was four years after joining the EU in July 2013, didn't come to fruition.

Croatia adopted the Croatian kuna as we know it today in May 1994, and it has remained in circulation ever since. It will continue being permitted as legal tender until mid January, 2023, but it is officially being scrapped tomorrow, on the 1st of January, 2023, making way for the euro as the country's new currency. Croatia fulfilled all of the many requirements for Eurozone entry this year, being given the green light not only for Eurozone accession but also for Schengen entry. No country has ever managed to enter both at the same time, on the very same day.

For some, the loss of the Croatian kuna marks a loss of identity and hard-won monetary independence, and for others, the introduction of the euro means more financial and economic stability, less people who have taken out loans being victims of exchange rate fluctuations, and more protection during crises. Whichever camp you fall into, Croatia abandoning the kuna for the euro is certainly an enormous moment in history for the little country that not only could, but consistently has, in the face of whatever has been thrown at it.

For more, check out our politics section.

Saturday, 31 December 2022

Croatian Hospitality Establishments Air Euro Concerns on Kuna's Final Day

December the 31st, 2022 - Croatian hospitality establishments, particularly bars, restaurants and cafes have been airing the last minute concerns as we are set to introduce the euro as Croatia's official new currency tomorrow. Will they all end up being more or less exchange offices for the next two weeks or so?

As Poslovni Dnevnik writes, will Croatian hospitality establishments double up as unwilling exchange offices during the first half of January? Who will have enough euro coins and cents and who won't? How will cash registers be closed on New Year's Eve? These are all questions currently troubling Croatian hospitality establishments, as with store closures, they'll be the first port of all for all euro transition confusion.

Cash problems

Dalibor Kratohvil, the president of the Croatian Chamber of Trades and Crafts (HOK), said that the state was asked, considering that on New Year's Eve there will be a lot of pressure on Croatian hospitality establishments, to continue making it possible to return the difference when giving people change in kuna.

"The Ministry answered saying that it is clearly written in the Euro Act, in Article 40, Paragraph 2, which says that in the first two weeks of January, in exceptional cases, they can return kuna, if there are no euros available to them at that moment in time,'' said Kratohvil, noting that this is only in exceptional cases such as a shortage of cash in euros.

When speaking about the concrete adaptation of the hospitality sector to the introduction of the euro, Hrvoje Margan, vice-president of the Catering Guild at the Croatian Chamber of Trades and Crafts, said that as far as the technical part is concerned, anyone who is a little more serious about things is ready for it and can do it.

"I think we're all somewhat ready and have a vision of how we'll work, and the biggest problem was that, in order to take some kind of advance supply of money, you had to have enough money in the bank account, and it's not like we're sitting on millions," he stated.

Closing the cash register

He added that IT experts did a good job and prepared the software for the transition to the euro. Thus, if and when a guest pays in kuna, the difference that they must return will be automatically converted into euros. Explaining what will happen at midnight from December the 31st (today) to January the 1st, he stated that, in order to be able to start anew on January the 1st, Croatian hospitality establishments would have to close their cash registers on December the 31st, make a calculation in kuna and then start working again. They'd then have to close all open items until then. The state, he added, came to the rescue and raised the cash limit from 10,000 kuna to 40,000 kuna for this purpose.

Clarifying what could be problematic when the euro comes into force, the vice president of the Catering Guild said that it isn't really a problem if a guest has a bill of 15 euros and pays it with a 200 kuna note, but when someone pays for a coffee of 1.60 euros with a 500 kuna note or more, then issues will arise.

"We're all afraid, not only cafe, restaurant and bar owners, but others as well, of becoming exchange offices," he stated, and when asked what about rounding up of prices and expected price increases, he added that he doesn't expect that to happen because in this situation, when people are looking at every single kuna, there isn't really much room for that.

"I don't know if any of my colleagues touched their prices at all, or if there's been price rounding, I don't expect that there will be any big price increases. Specifically, if we take for example coffee, which is now 12 kuna, it will cost 1.60 euros, or 12.07 kuna, from the New Year onwards, so there won't be a significant difference," he concluded.

For more, check out our dedicated news section.

Saturday, 31 December 2022

City of Split Updates Prices in Euros, Parking is Now More Expensive

December the 31st, 2023 - The City of Split has updated its prices in anticipation of the introduction of the euro in Croatia tomorrow, and while public transport may be cheaper, parking isn't...

As Poslovni Dnevnik writes, with the introduction of the euro as this country's official currency, Split's local authorities, or more precisely two of its utility companies, decided to "round up" the prices of some utility services and, as they claim, in such a way as to benefit the end users themselves. Let's make that more simple: city car parks are now more expensive, but public transport is cheaper.

As confirmed to tportal, the prices of Split's car parks will be adjusted to higher amounts with the introduction of the euro, and the winter regime going forward will be similar to what it is currently, one euro in the first zone, while in the summer period, one hour of parking will cost 1.5 euros. A special item on this particular list is the car park on the Riva (promenade) itself, which will be significantly more expensive: from the current 15 kuna (equal to about two euros) for the first hour and 20 kuna for each subsequent hour to slightly more in the winter period (two euros for the first hour, and three euros for the next hour).

However, from the months of May to September, parking on Split's famous Riva will cost 4 euros for the first hour and as much as 5 euros for each subsequent hour.

"However, most of the other prices have actually remained the same: parking in public garages isn't going to increase in price, the price of tenant subscriptions won't change either," they explained to tportal from "Split parking". They then once again announced the intensification of the construction of new public garages in different Split city districts: one has just kicked off as far as construction is concerned, another is due in about three months, and several more are planned throughout the year.

In parallel with the increase in the price of parking, public transport in Split is becoming cheaper: a monthly ticket for the first zone, which until recently cost 290 kuna, will cost the people of Split 30 euros in the future, equal to around 226 kuna. The difference from the actual price, which is set at 35 euros, so about five euros, will be subsidised by the company "Promet" from Split's own city budget.

It is this company that recently implemented a new ticketing system, meaning it's now possible to buy a ticket for the use of Split#s city buses in several different ways - at card machines, through a mobile application, on prepaid cards and the like. They will be slightly cheaper from the current eight kuna, costing around one euro in 2023.

For more, check out our news section.

Friday, 30 December 2022

Banovina Earthquake Reconstruction Recap 2 Years Later - Houses Built: 6

December 30, 2022 - Two years ago, the devastating Banovina earthquake struck the Sisak-Moslavina area of Central Croatia. How well has the state done in tackling the consequences? Horrifically poorly, according to many...

The SECOND anniversary of the devastating earthquake in Banija came with the dissatisfaction of the victims, but also of the participants in the reconstruction, which Prime Minister Andrej Plenković called "unbelievably slow," writes Index. Though we briefly covered the complex topic in A Week in Croatian Politics, read along for a more detailed overview.

Two years ago, on Tuesday, December 29, at 12:19 p.m., the area around Petrinja was hit by a devastating earthquake of magnitude 6.2, followed by a series of other earthquakes. The earthquake took the lives of seven people, leaving behind sad scenes of destroyed houses, commercial facilities, and public buildings in Petrinja, Sisak, Glina, and surrounding towns.

Many citizens from all over Croatia came to the aid of the residents who lost their homes in an instant on the same day, collecting and donating food, preparing meals, and clearing the ruins...

Citizens themselves brought food and other necessities in their cars, numerous volunteers and groups of younger people with shovels were seen in the earthquake-affected area helping the local population clear the terrain.

Two years later, the consequences of the earthquake are still apparent in many unrenovated houses in numerous villages and in Glina and Petrinja, where the reconstruction of the city centre has not started, but scaffolding and work on the first of 26 buildings are expected early next year.

In the area of Glina, 700 containers have been placed in which people from houses with red and yellow stickers (poor state of the buildings) are still waiting for structural renovation or replacement houses. Among them are people who do not have their own properties, so they are waiting for some other suitable accommodation.

In the Petrinja area, which has lost 5,000 residents since the last census, many people live in container settlements and containers next to their houses. Currently, about 1,600 of them are in the entire city and 212 in three container settlements.

The residents of the destroyed homes are dissatisfied because most of them are still waiting in containers to return to the renovated houses. The completion of the renovation of the houses is not yet in sight, though, as there are still many bureaucratic windmills left to fight. The government members are dissatisfied because the planned structural renovation of houses and the construction of replacement houses and residential buildings has not gained the expected momentum, despite the amendments to the Law on Reconstruction from October 2021, in which great hopes were placed.

Plenković's recent statement that the reconstruction of Banija "is going unbelievably slowly" fueled speculations about the resignation of Minister Paladina, who took up his post in March after the resignation of former Minister Darko Horvat. However, Paladina claimed that the "unbeleivably slow reconstruction" statement did not apply to him and was misinterpreted. The statement refers, he clarified, to the fact that the structural renovation of houses and buildings and the construction of replacement houses are not progressing at a sufficiently high-quality pace, which he has been saying for months.

"Only when we start renovating 100 houses a month we can be satisfied. I've been saying this for more than three, four months. The Prime Minister's statement refers to that part of the renovation that must be accelerated," he said.

Number of houses built in two years - 6

Only a few were lucky enough to return to their homes because, so far, the state has secured that all of six replacement houses are built in the entire county. Another 109 are currently under construction, while 16 multi-apartment buildings are under construction as part of the competitiveness and cohesion operational program.

Not a single building was renovated in the organised structural renovation, and the Central State Office, responsible for that county, completed the public tender procedure for 50 structural renovations.

According to statements from the area, most buildings were renovated thanks to donations. For example, in the area of Glina, 45 buildings were bought or built from donations, while the state has so far built six houses in the entire county, of which only one is in the area of Glina.

In the Zagreb area, which was hit by an earthquake measuring 5.5 on the Richter scale on Sunday, March 22, 2020, at 6:24, 25 structural renovations are underway, while 14 structural and 2227 non-structural renovations have been completed.

The renovation of public buildings is going better. From the Solidarity Fund, which is open until June 30 next year for the reconstruction of public buildings, 10 percent of the amount was realised in March, and now that share has risen to 40 percent.

Claims were submitted for compensation in the amount of HRK 2.6 billion.

New measures tackling numerous obstacles

Obstacles in the renovation of houses are numerous, from complicated "paperwork" and the application process to the lack of labour, rising prices of construction materials, and property-legal relations.

At the end of July, the Ministry adopted a new Program of Measures for the Reconstruction of Earthquake-Damaged Buildings, which improved the model of financial assistance, i.e., self-renovation, according to which the property owner who opts for the self-renovation model assumes the choice of the contractor and supervision. It also allows the owner to ensure the creation of the architectural design.

The most significant measure is the payment of advances to users who cannot provide their own funds. For example, for the first phase of self-renovation, an advance payment for the costs of creating a project for structural self-renovation of houses, as well as an advance for the execution of works worth 25 percent of the financial aid, is possible, while for buildings, the payment of the entire amount of financial assistance is possible.

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

Friday, 30 December 2022

Looking for a Job in Croatia? This Week's Top 10 from Posao.hr (December 30, 2022)

December 30, 2022 - Looking for a job in Croatia? A new weekly feature on TCN, in partnership with leading job site agency, Posao.hr, who present a selection of weekly job listings.

How hard is it to find a job in Croatia, and what is on offer?

We spoke to Ines Bokan, director of leading jobs site Posao.hr, who kindly took the time for this excellent interview overview.  

Ines has kindly agreed to work with us on a new weekly feature on TCN - a weekly selection of 10 job listings, as chosen by Posao.hr.  Details and links to the job opportunities below in the latest edition of this feature.

Eumetsat is hiring a Remote Sensing Scientist – Hyperspectral Infrared Level-2 Products (m/f) for work in Darmstadt, Germany. The company is offering an excellent salary of up to 7.500 € net per month, flexible working time, private medical coverage, and much more. Apply via this link by Feb 2nd.

Falkensteiner Hotelmanagement d.o.o. is looking or a Event Marketing Manager (m/f) in Zadar, Croatia. The company is offering a competitive salary, all-inclusive onboarding, an employee discount, and much more. Apply by Jan 20th by clicking here.

Future HR is hiring a Camping Resort Manager / Technical Supervisor (m/f) in Zagreb, Croatia. If you are familiar with the Tourism industry, have at least 4 years of experience in the relevant areas and proven experience managing social media accounts and websites, this is a great opportunity for you! Apply here until Jan 4th.

Next Step career network is hiring a Children Animator (m/f) in Austria. The net monthly salary is 1.700 €, with 14 full salaries a year and 48-hour weeks. All the details are available here, and applications are open until Jan 20th.

Adecco Hrvatska d.o.o. is hiring a German Speaking Customer Service Representative (m/f) for their client for work in Zagreb, Croatia. If you are proficient in English and German, and you know how to use a computer well, this is a great chance for you! Click here for more details about the listing and submit your application by Jan 1st!

CCPOTER Sp. z.o.o. is looking for a Sales Advisor with Croatian (m/f) for remote work. Other than 100% work-from-home benefits, they are also offering a competitive basic salary with attractive sales bonuses, flexible working hours, and more! Apply here by Jan 24th.

Workforce Ljudski Potencijali d.o.o. is hiring a Business Analyst (m/f) in Hum na Sutli, Croatia or Vojnić, Croatia. If you have a Master’s in economics or mathematics, strong organizational and writing skills and advances English communication skills, this is a great opportunity for you. Apply here until Jan 5th!

Gi Group Staffing Solutions is hiring a Junior Architect (m/f) in Zagreb, Croatia, for their client, Paradox Museum. If you would love to create innovative designs in line with the company mission and deliver comprehensive and detailed projects, this is a great opportunity for you! Apply here until Jan 9th.

Strabag BRVZ d.o.o. is looking for a Linux System-Administrator / DevOps (m/f) for work in Zagreb, Croatia or Belgrade, Serbia. The company is offering a chance to work in a global, multinational working environment with a strong team spirit, a competitive salary, and much more. Apply until Jan 15th by clicking here!

Pfizer Inc. is hiring a Healthcare representative (m/f) in Zagreb, Croatia. You can expect to grow with Pfizer, and to work in an environment which appreciates diversity, equity, and inclusion. Apply by Jan 24th via this link.

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For more career options and job listings, visit posao.hr.

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These weekly job listings will appear in the weekly TCN newsletter - you can subscribe here.

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Friday, 30 December 2022

Croatian Kuna Coins and Notes to be Literally Concreted in History

December 30, 2022 - After all Croatian citizens deposit their Croatian kuna and lipa in the banks, there will be enough money in physical form to pave 50 kilometres of road or mark the way from the bottom to the top of Mount Everest. But, of course, the banks will not do that, and this huge physical mass of money will be used for isolation purposes. For reference, the estimate is that there will be 5,200 tonnes of coins, which is the weight of 124 Zagreb trams. There will also be more than 500 million banknotes.

As 24Sata writes, in order not to further pollute the environment by burning banknotes that contain colouring, they will not be burned but shredded into pieces smaller than a millimeter. They will then be used as insulation in public construction works. After 28 years, which is how long the Croatian kuna has served in Croatia, it will be concreted into the country's history, literally. 

"When it's replaced with the euro, there will be the same amount of money in circulation as when the kuna was around. So, for example, the number of 100  Croatian kuna banknotes will be replaced by a proportional number of 10 and 20 euro banknotes", explains Tihomir Mavricek, the executive director of the cash sector of the CNB for Hina.

Fun fact, the Croatian kuna proved to be a fairly safe banknote that was not often counterfeited, as confirmed by the CNB. They explain that 200 kuna denominations were the most counterfeited, about a hundred per year. For example, in 2019, 506 banknotes were counterfeited, 157 in 2020, and 198 in 2021. For comparison, 4,280 euro banknotes were counterfeited in 2019, 237 in 2020, and 228 in 2021. Counterfeit money directly damages the person who receives such a note.

The withdrawal of kuna surpluses began in September. Around that period after each tourist season, surplus kuna is usually withdrawn into the vaults. The amount has increased this year. The kuna will be withdrawn gradually, banknotes can be changed indefinitely, and coins for three years. The CNB clarified that they know how much money they will print and mint each year. The cash cycle of money in the CNB starts from planning the needs for banknotes and coins for the following year. It depends on many factors, such as inflation, expected growth rates, etc.

Then the CNB orders money from printing shops and places where kuna and lipa are minted. From the CNB vault, it is shipped by trucks accompanied by special agents to eight cash centres in Croatia. Banks are supplied with cash from these centres, planning their needs daily depending on client announcements and the needs of the ATM network. Over the past 11 years, the amount of money in circulation has doubled and reached a level between HRK 41 and 42 billion. Mavricek says this was influenced by the increase in the standard and accumulated inflation. In recent months, businesses and citizens have had around HRK 30 billion in circulation. It will all become insulation.

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

Friday, 30 December 2022

Ryanair Croatia: The Company Announces Six New Routes for 2023

December 30, 2022 - Good news for all travellers and travel enthusiasts. The Ryanair Croatia offer is expanding, with the company announcing six new routes for the summer of 2023. The Irish company, it seems, has assessed that flights to Croatia are a safe card to play since Ryanair already has four aircraft based in Zagreb, three in Zadar, and regularly operates flights from other airports as well.

As Vecernji writes, the low-cost European transport giant Ryanair has been operating in Europe for many years, including Croatia. The confirmation that business has been going well came in the form of announcements for the next summer season when the Irish airline that offers low prices plans to launch seven more routes in the region, six of them in Croatia.

Airplanes of the Boeing 737 type, with a capacity of about 180 passengers, will be flying in Croatian skies more often from March, that is, June and July. The start of flights from Pula to Germany is expected in March, and Pula to Poland in June. Routes from Zadar to the same countries will start in June, with the addition of a route to Italy. Another connection to Italy will be established in July from Rijeka.

With all Ryanair's announcements added up, the schedule looks like this:

  • from March 26: Pula – Düsseldorf (Weeze)
  • from June 2: Pula – Katowice, Zadar – Rzeszów
  • from June 3: Zadar – Münster
  • from June 4: Zadar – Milan
  • from July 3: Rijeka – Bergamo

Another route was announced from Montenegro, more precisely from Podgorica to Gdansk, but it is not excluded that a few more routes will be announced in the following days. However, some passengers are justifiably skeptical because of how low-cost companies such as Ryanair, WizzAir, Jet2 and similar operate, that is, they cancel flights at the last minute if they are not satisfied with the occupancy of the aircraft (eng. load factor). The high load factor is one of the reasons why the mentioned companies offer prices much lower than their competition in aviation.

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

Friday, 30 December 2022

Zagreb New Year Celebrations: The Capital Joins the No Fireworks Initiative

December 30, 2022 - This year, many Croatian cities gave up fireworks for the New Year celebration, including Rijeka, Osijek, Varaždin, Pula, Rovinj, Labin, Čazma, Cres, Mali Lošinj, Opatija, Poreč, Samobor, Zabok. The Zagreb New Year celebrations will join the praise-worthy initiative to support the health and wellness of pets and animals by using alternative means of spreading cheer and joy.

As Poslovni writes, Zagreb is joining the list of cities without fireworks on New Year's Eve, after all. Instead, the people of Zagreb will welcome the New Year with colourful confetti, visual effects, and a rich musical program, as announced by the Mayor's Office on Thursday.

The City of Zagreb decided to join the initiative of several cities in Croatia, including Rijeka, Osijek, Pula, Zabok, Rovinj, Opatija, Poreč, Čazma, Samobor, and Labin, and gave up the New Year's Eve fireworks organised by the City. Instead, the citizens will welcome the New Year with colourful confetti, visual effects, and a rich musical program at the Ban Josip Jelačić Square.

"Even though we had already communicated that we would proceed with the New Year's fireworks because they were already contracted, we still managed to find another solution this week, thanks to the understanding shown by the contracted company," the statement said.

The New Year's Eve program starts at Ban Josip Jelačić Square on December 31 at 7 p.m., with a warm-up with DJ Kiki B., and at 9:15 p.m. young talents of Croatian music, some of the performers from the popular music shows The Voice and A Strana. The famous band Pips, Chips & Videoclips will perform from 11 p.m. until after midnight, and after midnight, Nipplepeople will take the stage.

On New Year's Eve, Mayor Tomislav Tomašević will visit the on-call services, which include the shelter for the homeless, emergency services, firefighters, and the police, and celebrate the New Year with fellow citizens at Ban Jelačić Square.

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

Friday, 30 December 2022

A Week in Croatian Politics - A Schengen and Eurozone Special

December the 30th, 2022 - This week in Croatian politics, we've been dominated by memories of the earthquake which struck the Banovina (Central Croatia) area back at the very end of pandemic-dominated 2020, as well as Croatia's accession to the Eurozone and to Schengen, both of which are set to take place on the 1st of January, 2023.

Two years ago, the devastating Banovina earthquake struck the Sisak-Moslavina area of Central Croatia. How well has the state done in tackling the consequences? Horrifically poorly, according to many...

We're now just past the second anniversary of the awful earthquake, known as the Petrinja earthquake, struck the aforementioned part of the country. Not only is this region criminally overlooked by the powers that be at the best of times, its position on the list of priorities has well and truly shown itself after this natural disaster struck at the very end of an already terrible year (2020).

Not much has altered for those who had life as they knew it crumble in the space of just several minutes back on the 29th of December, 2020. Dissatisfaction reigns strong among the earthquake victims, but also among the participants in the reconstruction process, which Prime Minister Andrej Plenkovic himself referred to as being "unbelievably slow". This comment among other things which have been building up over the past two years started speculations about the potential dismissal of the Minister Ivan Paladina, who has claimed that the comment made by the Prime Minister doesn't apply and wasn't in reference to him.

The residents of the houses which are still sitting in ruin, in some cases as if the earthquake happened yesterday, are dissatisfied because most of them are still waiting in containers to return to their should-have-been newly renovated homes, but the completion of the renovation process of these Banovina houses isn't yet in sight. Rather unsurprisingly for anyone who knows even the faintest thing about Croatia's masochistic love of red tape, there are still many bureaucratic windmills turning.

Local authorities in the affected areas are also dissatisfied because the desired structural renovation of the houses and the construction of replacement houses and residential buildings didn't achieve the expected momentum, despite the amendments to the Law on Reconstruction which were put into force back in October 2021, in which great hopes were placed on precisely that.

As touched on above, PM Plenkovic's recent statement that the reconstruction of the entire Banovina area "is going unbelievably slowly" fuelled speculations about the resignation of Minister Paladina, who took up his post in March, after the resignation of former Minister Darko Horvat, who ended up in jail for some time (enter your shocked Pikachu meme here).

However, Paladina claimed that Plenkovic's statement about the "unbelievably slow recovery" wasn't in reference to him at all and was misinterpreted. The statement refers, he clarified, to the fact that the structural renovation of houses and buildings and the construction of replacement houses are not progressing at a sufficiently quick pace, which he has been saying for months on end now.

"Only when we start doing 100 houses a month can we actually be satisfied. I've been saying this for more than three or four months now. The Prime Minister's statement refers to that part of the renovation that must be accelerated," he said.

Croatia's accession to the Eurozone is now just days away. Here's how that journey began five years ago

Croatia is set to become the 20th member state of the Eurozone, send the kuna to the history books and adopt the bloc's single currency as its official currency in just days. This moment has been being prepared for intensively for around a year now, but the real wheels were set in motion half a decade ago.

Back at the end of October 2017, a large conference was held where the Strategy proposal for the introduction of the euro as the official currency in Croatia was presented. This marked the beginning of a broad public debate on the introduction of the euro, when the government's goal was proclaimed that Croatia would take the first step towards the introduction of the euro, entry into the European Exchange Rate Mechanism II (ERM II), in 2020, when it was due to hold the rotating EU presidency.

The strategy was drawn up by experts from the Croatian National Bank (CNB) and the government, emphasising that the benefits which come from the introduction of the euro are permanent and significant, while the costs are mostly low and one-off. The strategy was finally adopted at the government session on May the 10th, 2018, when the then Economy Minister Martina Dalic, stated that a period of five to seven years would be a realistic period in which the euro could be introduced as the country's currency.

Then, back in early July 2019, Croatia sent a letter of intent to join ERM II, which was signed on behalf of the nation by Finance Minister Zdravko Maric and CNB Governor Boris Vujcic. That letter was accompanied by an Action Plan, with which Croatia committed itself to the implementation of nineteen measures and reforms spanning six areas, including further strengthening the supervision of the banking system by establishing close cooperation between the CNB and the European Central Bank (ECB), strengthening the framework for the implementation of macroprudential policy by introducing explicit mandate for measures aimed at borrowers, strengthening the framework for preventing money laundering, improving the system of collecting, processing and publishing statistical data, improving management in the public sector and reducing the administrative and financial burdens on the economy.

Croatia was deemed to have successfully fulfilled the Action Plan for joining ERM II and the banking union on time and in full, Prime Minister Andrej Plenkovic announced at the government session in May 2020.

A couple of months later, in July 2020, entry into the European Exchange Rate Mechanism II (ERM II) took place. On July the 10th, 2020, the ECB and the European Commission announced that Croatia had indeed entered ERM II, and that the CNB had established close cooperation with the ECB. Entry into ERM II followed less than a week after the victory of HDZ and its coalition partners in the then parliamentary elections. ERM II is also called the "waiting room for the euro", and candidate countries must spend at least two years in it, which meant the possibility that Croatia could introduce the euro as early as January the 1st, 2023. At the same time, the emphasis was placed on fulfilling the so-called criteria from Maastricht, that is, criteria of nominal convergence, which includes exchange rate stability, price stability, interest rate stability, along with two important indicators concerning public finances - budget deficit and public debt.

Croatia's entry into ERM II wasn't hindered by the coronavirus pandemic either, although its consequences represented a major challenge for public finances. On November the 11th, 2020, at the session of the National Council for the introduction of the euro, CNB Governor Boris Vujcic presented the National Plan for replacing the Croatian kuna with the euro, a document that described everything that needed to be done, including the activities of stakeholders from both the private and public sectors, in order to create the conditions for Croatia to introduce the euro on the first day of 2023, with consumer protection highlighted as its fundamental principle.

It meant, among other things, that the exchange of the kuna into the euro would be carried out at no cost to individuals, companies or the state, and that it would be done exclusively at a fixed conversion rate. The government adopted the plan on December the 23rd of that year, while on the last day of 2020, it appointed the management committee and the heads and heads of six coordination committees for the implementation of the plan. After a public consultation on the desired national motifs for the Croatian side of the new euro coins, which lasted from July the 1st to the 15th, 2021, the CNB's Money Commission determined the final proposal on July the 21st, and the proposed motifs were a checkerboard, a geographical map of Croatia, the kuna (a pine marten/mink type of animal), the Glagolitic script and of course - Nikola Tesla.

At the beginning of August 2021, the CNB announced a tender for the design of the national side of euro coins, and on February the 4th this year, the most successful designs were presented to the public, for which the authors received generous cash prizes.

Back in mid-January 2022, a proposal for a law on the euro was presented and submitted for public consultation, and the guidelines for adjusting the domestic economy in the process of replacing the Croatian kuna with the euro were also presented. At that time, among other things, it was announced that from September the 5th of this year, it would be mandatory for all business entities to display their sale prices in both kuna and euros, as one of the mechanisms to protect consumers from unjustified price increases. On May the 13th, the Croatian Parliament adopted the Law on the introduction of the euro as the official currency in Croatia. 117 MPs voted for the law, 13 were against it, and one abstained.

Finally, on June the 1st, 2022, the ECB and the Commission announced that Croatia had succeeded in meeting the convergence criteria, that its legislation was fully aligned with the requirements of the EU Treaty and the Statute of the European System of Central Banks/European Central Bank, and that it was ready to become the 20th member of the Eurozone from January the 1st, 2023.

Looking primarily at the Maastricht criteria, the biggest focus was placed on price stability, i.e. inflation, which began to rise across Europe and the rest of the world due to the consequences of the coronavirus pandemic, and later owing to Russia's aggression against Ukraine.

Over the last 12 months, Croatia has had an inflation rate of 4.7 percent, which was below the reference value of 4.9 percent. In order to meet this criterion, inflation couldn't have been allowed to spiral higher than 1.5 percent of the reference value, which is based on the average inflation in the three EU member states with the lowest inflation of all. In the past year, these were Finland, France and Greece, while Malta and Portugal were excluded from the calculation, where inflation deviated considerably from the European average due to much more specific reasons.

With the green light having been obtained from the Commission and the ECB, Croatia's path to full Eurozone membership was opened up.

In mid-June, the Eurogroup and the Council of the EU recommended that Croatia introduce the euro from January the 1st, 2023, followed by support for Croatian membership from the European Council and the European Parliament, and finally, on July the 12th, the Council for Economic and Financial Affairs of the EU (Ecofin) adopted three legal acts that were necessary for Croatia to become the latest member of the Eurozone, among other things, the decision on the conversion rate of kuna to euro according to the central parity of 1 euro = 7.53450 kuna.

On July the 5th, it was announced that the Deputy Prime Minister and Minister of Finance Zdravko Maric was resigning from his duties, but he still had the opportunity to attend that Ecofin session, which he apostrophised as a kind of "dot on the i" of his entire (and rather long) mandate. The three leading credit rating agencies - Standard&Poor's, Fitch and Moody's - responded to Ecofin's decision by raising their ratings, which also gave Croatia its highest investment rating in its history, provided by all three agencies.

In the entire process of introducing the euro, 19 sessions of the National Council for the introduction of the euro as the official currency in the Republic of Croatia were held, in which, in addition to representatives of the government and the CNB, the representatives of banks, employers and trade unions also sat. On Wednesday, December the 28th, the last session of the Council before Croatia joins the Eurozone was held, and all key actors, from representatives of the CNB and the government, to the heads of Fina and Croatian Post and the largest banks operating in Croatia, reported that all the necessary preliminary work had successfully been done and that all systems are ready for the transition to the new currency.

Governor Boris Vujcic reported, among other things, that so far 400 million euro coins with Croatian national motifs had been minted, a process that began back in July at the Croatian Mint in Sveta Nedelja near Zagreb. The large logistical effort of currency exchange was accompanied by the withdrawal of the current kuna from circulation, which regards about 1.1 billion coins and 500 million banknotes.

The CNB started with the first pre-supply of euro coins and banknotes three months before January the 1st, which included banks, Fina and Croatian Post, while the distribution of packages of euro coins to individuals began on December the 1st. People have so far bought 682 thousand of these packages, individually worth 100 kuna.

Boris Vujcic also reported that all the planned amount of euro banknotes had been acquired, and the supply of business entities, which is carried out by banks, is now nearing its end.

In addition to the legal obligation of double reporting of prices (in kuna and euros), which came into effect on September the 5th, business entities were invited from August the 16th onwards to join the Code of Ethics, the goal of which is to enable a reliable and transparent exchange of the Croatian kuna with the euro. By December the 28th, 1,006 business entities had joined it. In addition, in order to acquaint the general population with all aspects of the introduction of the new currency, the government and the CNB conducted informative and educational campaigns in autumn which spanned all major Croatian cities.

When it comes to the legislative activities related to the introduction of the euro, Finance Minister Marko Primorac reported at a recent session of the Euro Council that 70 national laws were amended to reflect the introduction of the euro, and the harmonisation of Croatian legislation will continue throughout 2023.

Croatia is set to join Schengen on the same day as it introduces the euro as its tender. No country has joined both the Eurozone and the passport-free Schengen zone on the same day before

Along with accession to the Eurozone, which I truly believe I've covered enough now, Croatia is also set to enter Schengen, the border-free, passport-free zone which truly encompasses one of the EU's four primary pillars of function - freedom of movement. The zone is the globe's largest visa-free zone of all, currently encompassing 27 European nations (28 when Croatia joins), which have officially abolished all forms of border controls at their national borders. Named after a town in Luxembourg where the original agreement was signed by Germany, France, Belgium, Luxembourg and the Netherlands back in 1985, Schengen has attracted controversy during various political crises, especially those which involve migrant crises. 

Controversy aside, the Schengen zone allows for the completely free movement of as many as 400 million people, and Croatia joining the zone will aid the tourist sector greatly, as the long lines at the land borders we've come to know each summer will be a thing of the past, and Croatia will also be in charge of protecting the EU's longest external border. It's worth noting that while land borders with other EU countries will be abolished with immediate effect on the 1st of January next year, the new Schengen rules for Croatian airports won't come into force until March.

For more on Croatian politics, make sure to check out our dedicated section and keep an eye out for our Week in Politics articles which are published each Friday.

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