Saturday, 25 June 2022

For Many Croatian Exchange Offices, This Summer Will be the Last

June the 25th, 2022 - For many Croatian exchange offices, this summer season will be their last. Croatia's Eurozone entry is set to take place at the very beginning of next year, and for a number of offices, the doors are being well and truly locked.

As Jadranka Dozan/Poslovni Dnevnik writes, the beginning of summer and the height of the tourist season is also the usual time of the "main harvest" for Croatian exchange offices, with the biggest turnovers in that niche market occuring during the months of July and August.

Last year, almost a third of the total annual turnover of authorised Croatian exchange offices was realised solely during those two summer months, and from the beginning of June to the end of September, 50 percent of the year-round turnover took place.

For many Croatian exchange offices, especially those for which these jobs aren't just a "side" activity, this summer, given the introduction of the euro at the beginning of next year, could be the last in which they remain in business.

According to the annual report of the Croatian National Bank (CNB) published this week, about 850 authorised Croatian exchange offices were active across the country at the end of last year, with a slightly higher number of them holding CNB licenses, a total of 1,146 of them.

Those who provided foreign currency trade services throughout the year or seasonally did so through approximately 3,500 Croatian exchange offices, where they traded a total of 31 currencies. However, out of 25.1 billion kuna in annual turnover (of which 18 billion kuna refers to purchases), more than 87 percent or 21.7 billion kuna was realised in euros (15 billion kuna through purchases, and the rest through the sale of euros). The majority of the remaining turnover refers to the US dollar (5.6%) and the Swiss franc (4.7% of the turnover).

Compared to pandemic-dominated 2020, last year's turnover within Croatian exchange offices increased primarily due to the recovery of the travel and tourism industry, by about 30 percent or almost six billion kuna. The first four months of this year also brought year-round traffic growth to offices.

According to the CNB, by the end of April, exchange offices across the country had generated a massive 6.73 billion kuna, compared to less than 5 billion kuna in the same period last year.

Authorised Croatian exchange offices achieved a record turnover back in 2017 (30.2 billion kuna), although in the meantime the inflows of tourist foreign currency grew. For example, in the record year of 2019, exchange offices made less than 30 billion kuna worth of foreign cash exchanges.

To a large extent, the explanation lies in the growing trend of non-cash payment transactions. By accepting foreign payment cards (cards issued outside of the borders of this country), transactions worth 20.8 billion kuna were realised last year.

Compared to the first year of the pandemic, 2020, it's equal to twice as much, compared to pre-pandemic 2019, not even four percent less, and compared to the exchange record in 2017, the value of transactions with foreign payment cards performed in Croatia last year was about 4.5 billion kuna higher.

There is no doubt that with the introduction of the euro in 2023, the number of CNB licenses for these jobs will fall even further. Most of the approximately (seasonally or year-round) 850 active Croatian exchange offices also perform other activities and currency exchange operations aren't their main activity.

The CNB estimates that they are the core business for approximately 200 legal entities, which in turn provide these services at approximately 400 exchange offices. It is also estimated that they employ between 600 and 800 employees.

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

Saturday, 25 June 2022

Croatian Company Koncar Signs 65 Million Euro Contract in Iraq

June the 25th, 2022 - The Croatian company Koncar has signed a contract in Baghdad with the Iraqi authorities worth a massive 65 million euros in total!

As Poslovni Dnevnik writes, the Croatian company Koncar, which is a well-known regional leader in the power industry, signed a 65 million euro contract with the Iraqi Ministry of Electricity (MOE) in Baghdad recently, the aim of which is to revitalise the Haditha hydropower plant.

This Iraqi plant, with an installed capacity of 6 × 128 MVA, represents one of the largest references in history for the Croatian company Koncar, given that the hydroelectric power plant was actually built by Koncar back during the first half of the 1980s.

Several companies within the wider umbrella of the Koncar Group, led by Koncar - Inzenjering/Engineering (KET), will participate in this large project. As part of the contract, the partial revitalisation of production units, the replacement of part of medium and high voltage equipment, complete power plant management systems, the excitation and electrical protection systems, as well as the renovation of all mechanical subsystems and hydromechanical equipment of the power plant will be carried out.

After a decade, negotiations with the customer continued, and after a little more than eighteen months of new talks in a completely new political environment, the Koncar Group achieved another historic step on the demanding global market, by signing a contract to revitalise this extremely significant Iraqi hydropower plant.

Moreover, in the last ten years, the Croatian company Koncar has already realised several smaller contracts, mainly involving the supply of equipment and spare parts for this power plant on the Euphrates River, as well as to other plants, such as HPP Hemren. This agreement achieved an important return to the Iraqi market, which once again confirmed the role of the Koncar Group as one of the most important domestic exporters to the global market.

"This is the final result of many years of negotiations, but also of already proven global references in this segment, which confirm the rich experience and unquestionable quality and reliability of our high-tech solutions. By signing this agreement, the preconditions for contracting new business in Iraq have been met, both at the Haditha HPP itself and at the rest of the Iraqi market,'' said Gordan Kolak, President of the Management Board of Koncar.

Koncar - Inzenjering/Engineering (KET) will implement this large and extremely important project in a consortium with a local partner, the company Al Rashak, and other companies within the Koncar Group will also be involved in the implementation. The fact that the Croatian company Koncar is very much at home when it comes to such projects is best confirmed by almost 400 hydropower plants across more than 50 countries around the world, which Koncar has fully or partially built and revitalised over more than seven decades.

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

Friday, 24 June 2022

EU Leaders Endorse Croatia's Entry into Euro Area

ZAGREB, 24 June 2022 - The European Council on Friday endorsed Croatia's entry into the euro area on 1 January next year.

"Today, at the European Council, Croatia received support from the highest political level for membership in the euro area. On 1 January we will achieve the Croatian government's strategic goal of joining the euro area. The benefits of membership will be felt by Croatian citizens and the economy, which will be even more resilient to crises," Prime Minister Andrej Plenović said on his Twitter account.

"The euro is the monetary expression of our shared destiny and has been part of our European dream. Now the dream comes true for Croatia," European Council President Charles Michel tweeted.

EU leaders supported the recommendation on Croatia's entry into the euro area on Friday. This is the second-last step in the decision-making process. The last step will be the adoption of three legislative proposals on Croatia's entry, which will take place at a meeting of the Economic and Financial Affairs Council on 12 July, and from 1 January next year the euro will be the official currency in Croatia.

Croatia will be the 20th member of the euro area. It will be the first enlargement of the euro area since 2015 when Lithuania joined.

Together with Slovenia, Croatia is the country that spent the least time in the euro waiting room, the European Exchange Rate Mechanism, the minimum two years, while Lithuania, for example, spent 11 years and Latvia nine years in the ERM II.

When first introduced in 1999, the euro was the so-called book currency, and the euro area consisted of 11 of the then 15 EU member states. Greece joined in 2001, just a year before the euro was physically introduced, followed by Slovenia in 2007, Cyprus and Malta in 2008, Slovakia in 2009, Estonia in 2011, Latvia in 2014 and Lithuania in 2015.

By adopting the euro as its legal tender, Croatia joins the Eurosystem, which consists of the European Central Bank and the central banks of the euro area member states, and the Governor of the Croatian National Bank joins the Governing Council of the European Central Bank. The Minister of Finance participates in Eurogroup meetings and the Prime Minister in eurozone summits.

Croatia also automatically becomes a member of the banking union, the banking supervision and resolution system.

Friday, 24 June 2022

ECHR: Croatia has Violated Rights of Flat Owners with Protected Lessees

ZAGREB, 24 June 2022 - The European Court of Human Rights (ECHR) published two verdicts in which it found that Croatia had violated the right of owners to use their flats that were occupied by protected lessees, and in one of the verdicts, compensation of over more than €100,000 was awarded.

The applicants brought a civil action before the Croatian courts seeking the eviction of the protected lessees from their flats in Split and Zagreb. The Croatian courts dismissed their claims, a Croatian government agent before the Strasbourg court reported.

The ECHR reiterated that the violation of the Convention for the Protection of Human Rights and Fundamental Freedoms stems from Croatian legislation itself, as has already been established in several judgments in relation to Croatia.

The applicants therefore could not effectively collect the amount of the protected rent or regain possession of their flat.

The Strasbourg court noted that Croatian courts have developed the practice that flat owners can claim payment of the difference between the amount of market and protected rent in civil proceedings before Croatian courts. However, the new case law became established only after the applicants had lodged a claim with the European Court and did not benefit them.

Therefore, ECHR jointly awarded the owners of the apartment in Split, who sought compensation for pecuniary damage with an amount of €106,200 in respect of the difference between the protected and the corresponding rent, as well as €13,340 in respect of non-pecuniary damages and costs.

The owner of the Zagreb flat was awarded compensation for non-pecuniary damage in the amount of €5,000. Both verdicts are final.

Friday, 24 June 2022

New Omicron Subvariants Increasingly Present in Croatia

ZAGREB, 24 June 2022 - New, more contagious subvariants of the Omicron variant of the SARS-CoV-2 coronavirus have been detected in Croatia, causing a considerable increase in the number of new COVID-19 cases this week, the Croatian Public Health Institute (HZJZ) said on Friday.

In a situation where all epidemiological measures have been lifted, the virus is spreading faster, and the new subvariants BA.4 and BA.5 are more successful in avoiding the immunity acquired by vaccination or recovery, the HZJZ said.

On Friday, Croatia registered 612 new COVID-19 cases and four related deaths, compared to 206 new cases recorded on 1 June.

The subvariants BA.4 and BA.5 have been found in 15 per cent of the samples that Croatia has sent to a European laboratory for sequencing.

The HZJZ noted that despite the greater virulence of the new subvariants, vaccinated people are still pretty well protected against more serious forms of the disease and hospitalisation.

People who have recovered from COVID-19 are recommended to get vaccinated at least three months after the recovery because the protection acquired by recovery subsides over time.

The director of Zagreb's Fran Mihaljević Hospital for Infectious Diseases, Alemka Markotić, said that the situation was being closely monitored and that she could not rule out the possibility that the current increase in case numbers would be called a new wave of the epidemic.

"The spread of the subvariants BA.4 and BA.5 makes it possible for people who have been vaccinated or who have recovered to be infected, but these are mostly mild clinical forms that pass in a day or two. It is important that chronic patients continue to practise epidemiological measures and protection, so we invite them again to get vaccinated," Markotić told Hina.

She noted that the two new subvariants were likely to soon become dominant in Europe, and added that new Omicron-specific vaccines were still not registered either in Europe or in the United States.

Friday, 24 June 2022

CA: Cause of Damage to Plane Still Unknown, but Certainly Not Shot At

ZAGREB, 24 June 2022 - The cause of the damage to a Croatia Airlines (CA) aircraft that landed in Sarajevo late on Wednesday is still unknown, but it certainly wasn't from a firearm, the national flag carrier told a news briefing on Friday.

The Dash 8-Q400 aircraft was on a regular flight from Zagreb to Sarajevo when it suffered mechanical damage. A ballistic examination found no traces of gunpowder on the plane, disproving the speculation that the damage was caused by a gunshot.

The investigation and inspection conducted in Sarajevo has confirmed for now that it is mechanical damage to the aircraft's skin, said Tomislav Štimac, Deputy Director of Technology at Croatia Airlines.

Robert Kruljac, Earth Services Manager and Crisis and Emergency Management Manager at CA, said that it was not yet known how the damage occurred, but it could have been caused by a sharp object, possibly a stone on the runway. Both Sarajevo and Zagreb airports have been asked to clean their runways.

Kruljac is of the opinion that the damage was caused either during take-off or landing rather than when the plane was airborne.

He explained that planes are inspected after each take-off and landing, and since the mechanic in Sarajevo saw the damage after landing, ballistic expertise was requested in order to remove any doubts about the cause, in particular the possibility that the plane had been shot at.

The plane will return to Zagreb on Friday where a detailed inspection will be conducted. Once the damage has been entirely repaired, the aircraft will be put back into commercial use, possibly next week, the national flag carrier said.

Friday, 24 June 2022

Zelenskyy Thanks Croatia for Helping with Its Experience in Defense of Country

ZAGREB, 24 June 2022 - Ukrainian President Volodymyr Zelenskyy individually thanked each leader of the EU member states for granting his country candidate status, including Croatia's Prime Minister for "helping with the experience of defending freedom," Ukrainian media reported on Friday.

"Croatia is with us. Thank you, Mr. Prime Minister, for your help with the experience we are using to protect our freedom,” Zelenskyy said on Thursday after Ukraine was granted EU candidate status, according to the Ukrainian Kyiv Post.

Addressing EU leaders on Thursday, Zelenskyy said they had made one of the most important decisions for Ukraine in its 30 years of independence.

"However, I believe that this decision is not only for Ukraine. "This is the biggest step towards strengthening Europe that could be taken right now, in our time and in such difficult conditions, when the Russian war is testing our ability to preserve freedom and unity," Zelensky said.

The leaders of the EU member states made a historic decision in Brussels on Thursday and granted candidate status to Ukraine and Moldova and promised a European perspective to Georgia.

Ukraine and Moldova received candidate status in the shortest possible time until now.

Ukraine submitted a request on 28 February this year, four days after the Russian invasion, and a few days later the same was done by Georgia and Moldova.

As early as 7 March, the European Council asked the European Commission to draw up an opinion on these requests. The EC did so on 17 June.

Croatia, for example, applied for membership on 21 February 2003, and two months later the Council asked the Commission to issue an opinion.

One year later, in April 2004, the Commission issued its opinion for Croatia, and its candidate status was granted in June 2004. Croatia joined the EU in mid-2013.

For more, check out our politics section.

Friday, 24 June 2022

Belonging to Euro Area Boosts Croatia's Resilience to Crises, says PM

ZAGREB, 24 June 2022 - Support for Croatia's eurozone membership bid is an excellent sign for its highly euroized economy and will also boost its resilience to crises, Prime Minister Andrej Plenković said on Friday ahead of the start of the second day of the EU summit meeting.

One of the topics on the agenda of the two-day summit meeting is Croatia's entry into the euro area, and the leaders of the EU members states will support Croatia's accession, which is the penultimate step in the decision-making on receiving an aspirant in the euro area.

The last step is the adoption of three legislative proposals concerning Croatia's introduction of the euro, which will be made by the Council for Economy and Finance (EU Ecofin Council) on 12 July.

Thus, Croatia's changeover to the euro can start on 1 January 2023.

Today's summit meeting is very important for Croatia, which will become the 20th member of the euro area. This is a strategic goal of my cabinet, said Plenković while arriving at the summit meeting.

7 in 10 tourists in Croatia come from the euro area

Commenting on the highly euroized economy in Croatia, Plenković noted that 50-60% of loans and savings are tied to the euro, and 70% of travellers visiting Croatia are from the euro area, while two-thirds of the exchange is with the euro area.

The membership of the euro area will make Croatia better prepared to respond to crises such as energy and food crises or inflationary pressure, he said adding that the membership of the EU facilitated Croatia's efforts to address the COVID-19 pandemic.

For more, check out our politics section.

Friday, 24 June 2022

Port of Rijeka: Requests for Ukraine Grain Transshipment Trice Higher than Capacity

ZAGREB, 24 June 2022 - The Port of Rijeka is receiving inquiries about its possibilities for the transshipment of Ukrainian grain, blocked currently in silos in Black Sea ports due to the war, however, the port's limited capacities make it impossible to grant all the requests, says the Rijeka port's management chair.

The management boar's chairman Duško Grabovac has recently told Hina that "the pressure is mounting".

A new harvest is to start, and their silos (in Ukraine) are full, Grabovac told the Croatian reporters during a recent business forum within the Three Seas Initiative summit meeting in the Latvian capital city of Riga.

In 2019, Ukraine exported 16% of the global reserves of maize and 42% of sunflower oil, according to the data provided by the United Nations.

Over the recent weeks, traders are seeking alternative routes for the transport of grain from Ukraine and the Port of Rijeka is therefore is receiving more and more requests.

Grabovac said that the capacity of the silo in this northern Croatian seaport is 55,000 tonnes.

Therefore it is difficult to meet all the requests, he explains.

For more, check out our business section.

Friday, 24 June 2022

INmusic Ends, Kasabian Headliner on Last Day of Festival

ZAGREB, 24 June 2022 - Kasabian, a British rock band, was the headliner of the last day of INmusic that ended at Jarun Lake, Zagreb, on late Thursday night.

They made their Croatian debut at the INmusic festival in 2017.

The festival's director, Zoran Marić, told Hina that an estimated 100,000 people passed through the four-day festival.

According to Marić, 45% of the audience were foreigners, most of them arrived from Great Britain, Slovenia, Italy, and Hungary.

Some of the stars at the 15th edition of the festival were Nick Cave and the Bad Seeds, the Killers, and Deftones. 

For more, check out our lifestyle section.

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