April the 26th, 2022 - Croatian public debt is continuing to fall, so much so that this decrease has placed the country at the very top of the list of European Union (EU) member states.

As Poslovni Dnevnik writes, the public debt across the European Union and within the Eurozone itself, expressed as a share of GDP, decreased in the fourth quarter of 2021 thanks to the recovery of the economy following the coronavirus crisis, and the Republic of Croatia is among the countries with the biggest decline, a Eurostat report showed last week. At the EU level, public debt as a share of GDP stood at 88.1 percent at the end of 2021.

When it comes to Croatian public debt, consolidated general government debt amounted to 343.6 billion kuna back at the end of December, which corresponded to 79.8 percent of the nation's overall GDP.

Back at the end of September 2021, Croatian public debt amounted to 345.3 billion kuna, which corresponded to 82.7 percent of domestic GDP. At the end of pandemic-dominated 2020, it amounted to 330.4 billion kuna, which corresponded to 87.3 percent of GDP. When it comes to other EU member states, Estonia had the lowest level of public debt at the end of last year, standing at a mere 18.1 percent.

In most European Union countries, public debt as a share of GDP was lower at the end of last year than it was back at the end of 2020, the first year of the global coronavirus pandemic, thanks to a recovery in the economy that was spurred by the easing of epidemiological measures in many countries.

Compared to the end of 2020, public debt decreased the most in Greece and Cyprus, by 13.1 and 11.4 percentage points, respectively. Those countries are followed by Portugal and Croatia, whose public debt as a share of GDP in the fourth quarter was lower by 7.8 and 7.5 percentage points, respectively.

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

ZAGREB, 20 April 2022 - The European Union's industrial production recovered in February, fuelled by production of durable consumer goods, and Croatia was among the member states with the largest increases in output, according to Eurostat data released on Wednesday.

In the European Union, the seasonally adjusted industrial production rose by 0.6% in February compared with January, when it declined by 0.3%. In the euro area, industrial production increased by 0.7% compared with the previous month when it fell by 0.7%.

Monthly comparison

Production of durable consumer goods increased the most, by 2.4% in the EU and by 2.7% in the euro area. In January, it fell by 0.4% in the EU and by 0.8% in the euro area.

Only the energy sector recorded a decrease, of 0.6% in the EU and 1.1% in the euro area.

Among member states, the highest monthly increases were registered in Italy (+4.0%), Croatia (+2.7%) and Ireland (+2.4%). 

It was the highest rate for Croatia since March 2021. In January 2022, industrial production in Croatia fell by 0.5%.

The largest decreases were observed in Slovenia (-8.3%), Lithuania (-3.8%) and Malta (-2.7%).

Annual comparison

In February 2022 compared with February 2021, industrial production increased by 3.0% in the EU and by 2.0% in the euro area. In January 2022, industrial production stagnated in the EU and declined by 1.5% in the euro area.

The recovery was driven by production of durable consumer goods, which increased by 6.3% in the EU and by 5.8% in the euro area. In January, production in this sector rose by 1.5% in the EU and stagnated in the euro area.

Only capital goods production decreased, by 2.1% in the EU and by 3.1% in the euro area.

Among member states, the highest annual increases were registered in Lithuania (+20.4%), Poland (+17.8%) and Bulgaria (+14.4%), while the largest decreases were observed in Ireland (-14.1%), Portugal (-5.7%) and Malta (-3.5%).

In Croatia, industrial production increased by 4.1% in February 2022 compared with February 2021, following an increase of 3.5% in January 2022.

For more, check out our business section.

ZAGREB, 6 April 2022 - Croatia on Wednesday received two reasoned opinions as part of the April package of EU law infringements, which the European Commission publishes once a month.

Together with Spain and Luxembourg, Croatia has been given a reasoned opinion for failing to ensure complete transposition into national legislation of the Directive on the Energy Performance of Buildings.

The directive introduces new elements to strengthen the existing framework, such as minimum requirements regarding the energy properties of new buildings, electromobility and charging stations, as well as new rules on heating and air conditioning system inspections.

The directive is aimed at modernising the construction sector in terms of technological improvements, and increasing the low rates of reconstruction of buildings to improve the energy efficiency of the EU housing stock.

The revised provisions should have been transposed into national legislation by 10 March 2020. In May 2020 all three member states received a formal warning over failure to transpose the directive.

After reviewing national measures, the EC considers that the transposition of the directive into national law in Croatia, Spain and Luxembourg has not been completed and is now sending them a reasoned opinion.

The countries have two months to respond and if the EC does not receive a satisfactory response, it can decide to refer their cases to the Court of the EU.

The second reasoned opinion, which Croatia received along with eight other member states, refers to the Open Data Directive.

The EC wants the nine member states to provide information on how EU rules on open data and the re-use of public sector information from the Open Data Directive have been transposed into national law.

The deadline for this expired on 17 July 2021 and the member states concerned have not stated all national measures despite formal warnings sent on 30 September 2021.

The directive, adopted on 20 June 2019, aims to use the advantages of using open data and help enable the re-use of the public sector's huge and valuable base of data resources.

This will reduce obstacles to the entry of small and medium companies into the market because costs of data re-use will be reduced, more data will be made available and new business opportunities will be created owing to the exchange of data through the Application Programming Interface.

The directive encourages the development of innovative solutions such as mobility applications, it increases transparency by enabling access to publicly funded research data and supports new technologies, including artificial intelligence. If it does not receive a satisfactory response in two months' time, the EC may decide to refer the case to the EU Court.

The EC, as the guardian of the Treaties, launches EU law infringement procedures based on its own investigations or acting on citizens', companies' or other stakeholders' complaints.

Most of the cases are resolved before they are referred to the Court of the EU.

For more, check out our dedicated politics section.

ZAGREB, 3 April 2022 - About 150 people in Croatia are annually diagnosed with acute myeloid leukemia (AML), and the survival rate is about 5% below the EU average, a round table on the treatment and quality of life of AML patients heard earlier this week.

"In Croatia, every week three persons are told they have AML, which is 156 annually, according to data from the Cancer Register for 2019. The five-year survival rate is 12.6%, compared to the EU average of 17.2%, which shows that there is considerable room for improving treatment", the participating doctors and patients said at the round table.

AML is the most common type of acute leukemia in adulthood and the most frequent age at diagnosis is 65 years, with increasing incidence after 65 years of age. It has the lowest survival rate compared to other types of leukemia and is treatable in about 40 per cent of patients aged under 60 years, most frequently by bone marrow transplantation from an unrelated donor.

"In Croatia, we have 70,000 bone marrow samples and we can find an unrelated donor relatively quickly, which is why nearly every patient in Croatia has a chance to get a transplant and be cured. The number of transplantations has reached one hundred annually, which is within the European average," haematologist Radovan Vrhovac said.

For more, check out our dedicated lifestyle section.

April the 1st, 2022 - Croatian wages paid per hour rather unsurprisingly fall short of the European Union (EU) average, even with state benefits included in the final sum.

As Poslovni Dnevnik writes, the price of an hour of work, which includes state benefits, stood at a mere 11.2 euros back in 2021, according to a report which looked into the matter by Lider.

The survey, conducted at the level of the European Union, showed just how below Croatian wages paid by hour are when compared to the general European Union average, given that the average cost of labour in the EU stood at 29.1 euros, and 32.8 euros in the Eurozone.

It isn't remotely encouraging that the Republic of Croatia has found itself in an extremely unimpressive fifth place on the list. As in fifth from the end, not from the beginning. In the EU, Latvia has lower labour costs than Croatia does, with costs of 11.1 euros, in neighbouring Hungary, the same costs stand at 10.4 euros, in Romania, the somewhat infamous 8.5 euros remains so, and last on the list comes Bulgaria, where the cost of an hour of work it costs a mere seven euros.

At the same time, Western countries, with which Croatia often likes to (rather unrealistically) compare itself to, are somewhat different.

The highest labour costs can be found in Denmark, where an hour of work costs a far, far higher 46.9 euros. Right behind it are Luxembourg, with 43 euros, Belgium, with 41.6 euros, and then France, the Netherlands and Sweden, with just under 40 euros per hour.

Austria, Germany and Ireland, countries where Croats often head to with hopes of a more stable economic situation and better prospects, are among the best in the European Union when we look at how much employers have to spend in order to have workers.

In Austria, the price of an hour of work stands at 37.5 euros, in Germany it is negligibly lower - 37.2 euros - and Ireland follows them closely with 33.5 euros per hour of labour.

For more on Croatian wages, the domestic economy and working in Croatia, make sure to check out our lifestyle section.

March the 23rd, 2022 - Croatian MEP Biljana Borzan has asked quite the valid question: Why isn't the Croatian Government doing more to lobby for the Croatian label in Brussels as a new rule on food packaging is set to come into force?

As Poslovni Dnevnik writes, the European Union (EU) will soon introduce mandatory nutrition labels for food on packaging, and EU member states are currently vigorously lobbying for their national labels to be chosen. Croatia, quite unsurprisingly, isn't doing the same. MEP Biljana Borzan warned that Croatia is simply ignoring the existence of the "Live Healthy" label in Brussels, which, with co-financing from EU funds, was developed by the Croatian Institute of Public Health.

''Across the EU, eight labels are used on a voluntary basis, Croatia should be proud and take advantage of the fact that one of these is the Croatian "Live Healthy" label, and of course, Croatia should lobby to be elected. However, a meeting of representatives of EU member states was held on March the 11th to discuss this very topic, and according to the minutes taken, our representatives didn't even bother to mention that there is a Croatian label at all, let alone lobby for its use. The meeting was organised by Italy, which harnessed significant diplomatic resources for their so-called "Battery" label, and Croatia is indirectly supporting it with its silence, warned Biljana Borzan, who has long advocated the introduction of a single EU label.

At the end of 2022, the European Commission (EC) will propose a single label system for the entire European Union (single) market, in order to better inform the public and combat the growing problem of obesity and other such related diseases. This is part of the "From the field to the table" strategy, for which vice president Biljana Borzan is in charge on behalf of the Eurosocialists.

''More than 950,000 people died across the EU in 2017 as a result of eating an unhealthy diet, mainly from heart disease and cancer, and Croatia is worse than the average. The new labels will help customers find more nutritious products on store shelves. These new labels must be noticeable, easy to understand and based on scientific knowledge. These are the characteristics of "Live Healthy", which is well known to the Croatian food industry. Significant amounts of money from EU funds have been invested in its promotion, and the inactivity and lack of information of the representatives of the Croatian Government in Brussels is all the more inadmissible,'' Biljana Borzan believes.

The MEP added that the Eurobarometer survey showed that 82 percent of respondents in Croatia fully or mostly agree with the statement that there should be one logo that would signal that food is healthy and sustainable.

"Unfortunately, this situation reminds me of the debacle with the candidacy for the seat of the European Medicines Agency, when Croatia withdrew Zagreb's candidacy in favour of Italy. The explanation was that we didn't have a great chance and that Italy would somehow repay us, but of course, there was nothing of that to speak of. Slovakia also insisted on Bratislava's candidacy and a year later gained the seat of a new EU labour agency. The EU is a community that provides opportunities, but they don't benefit the modest, self-denying and inert, but those who fight for their slice of the cake", concluded Biljana Borzan.

For more, check out our politics section.

March the 9th, 2022 - The Croatian EC request for the payment of the first tranche of cash amounting to a massive 700 million euros still hasn't been sent, it has emerged.

As Ana Blaskovic/Poslovni Dnevnik writes, despite announcements from the government that it intended to get it sent out by the end of February, this Croatian EC request still hasn't been submitted. This cash would be paid out by the European Commission (EC) from the National Recovery and Resilience Plan.

This Croatian EC request should finally be submitted over the next few weeks, when some more technical details are polished up, but there are no major objections to be heard in regard to the first set of measures, as has since been learned from several informed sources.

The main precondition for the first Croatian EC request, a document that a member state can request the first payment of that sum with, was that the National Operational Arrangement had to be signed in early February. In essence, it is an accompanying technical document which elaborates in detail the key stages, timeline and values ​​of these individual planned measures.

In the first transitional period, Croatia undertook to complete a set of 31 reform measures and 3 investments, the successful implementation of which depends on each subsequent injection into the budget, following last year's advance.

The advance of 818 million euros, or 13 percent of the approved plan, is the only unconditional payment, and Croatia received it back at the end of September 2021. When it submits this new EC request, the European Commission should pay the money out in the next four months.

Transparency is imperative

Those familiar with the process close to the European Commission say that the details will be ironed out in the next few weeks, but that there are no major objections as yet. When asked, however, whether it means that they're satisfied with what has been presented, they're refraining from going so far as to say a resounding ''yes''. Among the details the European Commission insisted on was adapting the country's IT system.

Its base is the existing platform of EU funds, but a much higher level of transparency was required from Brussels. For example, that the name of the end user of the money can be found in the system in order to prevent potential conflicts of interest over time. Solutions in this direction are of crucial interest to the Croatian public, as the National Recovery and Resilience Plan is worth 47.5 billion kuna in total and is, at least relatively speaking, the largest in the European Union (EU).

The chance of a ''less than transparent'' way of spending this sum of money will be challenging for all member states, the Commission assures, and not only for Croatia, which is at the very bottom of the European Union in terms of corruption indicators and poorly functioning state institutions. Interlocutors also pointed out that this isn't an issue that only the European Commission insists on, but that it is also in the focus of the European Parliament.

Regular consultations on the Zagreb-Brussels route on the Recovery and Resilience Plan, which should bring with it several substantial reforms, already have some difficult topics on the agenda, such as the reorganisation of the healthcare system and greater efficiency of the judiciary.

Some details of the proposed healthcare reform, specifically the functional merging of hospitals and the transfer of authority over them to the national level, have already resulted in strong resistance at the local level.

Signals from Brussels make it clear that this is an issue that will be insisted on, arguing that there is no alternative to improving access to and efficiency of the Croatian healthcare system, cutting waiting lists, and also cutting costs such as unifying the (now dispersed) public procurement process.

The same goes for the integration of local water companies; the reform of the water utility system envisages cutting their number from 200 all the way down to a much less 43. This idea has also angered local leaders, but more than 5 billion kuna in investment totally depends on it.

Finally, Russia's invasion of Ukraine raised questions about whether the European Commission would give in and give member states a little bit of room for maneuver in order to redirect some of that money to mitigate the indirect damage from the war. The answer to that question, at least at this point, is no. The national plans set out the necessary reforms to strengthen the resilience of economies to the specific recommendations for each member state.

For more information on this Croatian EC request and much more, check out our politics section.

March the 9th, 2022 - Croatian GDP growth in the fourth quarter of last year is more than impressive, placing the country among the European Union (EU) member states with the strongest such growth of all.

As Poslovni Dnevnik writes, the Republic of Croatia is among the EU countries with the highest annual GDP growth rate in the fourth quarter of 2021, ranking behind Ireland and Malta and soaring well above the European average, new Eurostat estimates revealed this week.

The EU's seasonally adjusted gross domestic product (GDP) rose 0.4 percent in the fourth quarter of 2021 compared to the previous three months, when it increased 2.2 percent, Eurostat confirmed in its February estimate.

The Eurozone's GDP grew 0.3 percent when compared to the third quarter, when it rose 2.3 percent.

Compared to the same period a year earlier, the seasonally adjusted GDP of the EU as a bloc and the Eurozone increased by 4.8 and 4.6 percent respectively. It rose 4.1 percent in the EU and 3.9 percent in the Eurozone in the previous quarter.

Activity in both the EU and the Eurozone exceeded pre-pandemic levels from back at the end of 2019, by 0.6 and 0.2 percent, respectively, Eurostat determined on the basis of seasonally adjusted data. Throughout 2021, activity in both areas rose 5.3 percent, 0.1 percentage point stronger than Eurostat estimated back in mid-February.

Neighbouring Slovenia is at the helm...

At the annual level, all EU countries form which Eurostat obtained data recorded GDP growth in the fourth quarter of 2021, and the strongest was in neighbouring Slovenia, where it amounted to 10.5 percent.

The Slovenes are followed by Malta and Ireland with a 10 percent increase in activity, and Croatian GDP growth also places it in this group, where it grew by 9.9 percent, after a 15.3 percent jump in the period from July to September. The weakest growth among the countries with Eurostat data was recorded by Slovakia, with 1.2 percent, and Germany is close with a growth rate of a mere 1.8 percent.

Among the countries whose data were available to Eurostat, GDP in Slovenia grew the most on a quarterly basis in the fourth quarter of last year, by 5.3 percent, followed by Malta with 2.3 percent growth and Spain and Hungary, where GDP grew by two percent in both countries.

A decline in activity was recorded in Ireland, by 5.4 percent, in Austria, by 1.5 percent. The same also fell slightly in Germany, by 0.3 percent, and here in Croatia, Latvia and Romania, that fall stood at 0.1 percent. In the third quarter of last year, Croatian GDP growth stood at 1.4 percent on a quarterly basis.

Decreased employment

The number of employees in the EU and the Eurozone increased by 0.5 percent in the last three months of last year compared to the summer quarter, when it increased by 0.9 and one percent, respectively. Compared to the end of 2020, it increased by 2.1 percent in the EU and by 2.2 percent in the Eurozone. Between July and September, it rose 2.1 percent in both areas.

Recovery in Croatia...

Employment in Hungary, Denmark, Malta and Spain accelerated the most on a quarterly basis, ranging from 1.2 to 1.0 percent. Here in Croatia, the number of employees increased by 0.6 percent in the fourth quarter of last year compared to the previous quarter, when it fell by 0.1 percent. On an annual basis, the number of employees in Ireland increased by the most, by 8.4 percent.

When it comes to the growth in the number of employees at the end of last year by 3.6 percent compared to the same period back in 2020, Croatia is equal to Greece, Luxembourg and Malta. In the third quarter, the number of employees in Croatia increased by 1.7 percent on an annual basis. Only Romania saw a 9.1 percent drop in registered employee numbers.

For more, check out our lifestyle section.

March the 1st, 2022 - European Union (EU) funds are up for grabs by Croatian technology companies in the current programming period of the bloc for the period between 2021 and 2027.

As Poslovni Dnevnik/Tajana Striga writes, the current programming period of the European Union, planned for the period from 2021 to 2027, is the most generous so far and makes over 25 billion euros available to the Republic of Croatia. By comparison, Croatia's annual gross domestic product was just over 55 billion euros last year. The size of the funds available is encouraging, but it still isn't enough to declare success.

Only the efficient and market development-oriented distribution of those funds can lay a sound foundation for the growth and development of the Croatian economy in the long run. The first step in this is to provide clear, accurate and above all adequate information to potential applicants so that they can identify tenders of interest as soon as possible and start preparing for them.

Among the first tenders announced for this year is the "Commercialisation of Innovation", which is planned for the first quarter of the year. The competition is aimed at small and medium-sized enterprises with mature innovation projects that are close to entering the market (TRL level 7 or higher). TRL (or Level of technological readiness) is a measurement system in which each level is characterised by a stage in the development of technology. There are 9 levels of technological readiness, and in order for a given project to be considered level 7 and eligible for funding under this tender, it's necessary to have a prototype whose performance has been tested out in an operational environment at the pre-commercial level.

In addition to the above, a clear plan for the production and commercialisation of products (TRL 8 and 9) is needed. In order for a product or service to be considered an innovation in the context of this tender, its functionalities when it comes to terms of application and characteristics must differ significantly from existing market solutions. In addition to the innovativeness of the project, the probability of commercial success will also be taken into account.

Although the details of the tender are still unknown, we've since learned from the National Recovery and Resilience Plan that the total budget for this tender stands at a massive 380 million kuna. The investment will be supported by at least 95 small and medium-sized enterprises during one public call/invitation and the amount of financing per project ranges from 760,000 kuna to a maximum of 5.32 million kuna.

Additional points will be achieved by those proposals that contribute to the green transition by reducing greenhouse gas emissions, increasing energy efficiency and stimulating the circular economy, offering blossoming Croatian technology companies a fighting chance. While the contribution to the green transition isn't explicitly prescribed by the tender, the project must meet the principle of "no significant harm", meaning that it must not have a negative impact on the six environmental objectives set within the EU Taxonomy Regulation.

Environmental objectives include climate change mitigation and adaptation, the sustainable use and protection of waters and marinas, pollution prevention and control, the transition to a circular economy, and the protection and restoration of biodiversity and ecosystems. This form of funding can be used to adapt a developed product or service and prepare for the launch of a product or service, which is perfect for many quickly developing Croatian technology companies. For example, eligible activities to adapt a developed product include the additional testing and incorporation of those test results into a final product, consulting services, capacity building, feasibility study audits, product design, and the protection of intellectual property rights.

Eligible activities for product launch preparation include the preparation or revision of a business plan and/or marketing plan, market research and testing, product testing with potential customers, production preparation and zero-batch investment, as well as operational marketing activities.

In addition to the aforementioned "Commercialisation of Innovation", the first quarter is expected to have yet another tender announced "Grants for start-ups" intended for innovative small and medium enterprises in high-tech sectors and knowledge-based sectors for TRL projects level 5-8, or those projects maturity beyond the concept-proof phase, but not yet ready for the market.

Companies that have been present on the market for a maximum of five years, with a somewhat defined team, and projects with a credible path to commercialisation can apply. The grant serves to support product development and increase existing production capacities, including upgrading, designing, verifying performance, market validation, testing, pilot line development, intellectual property protection and external services aimed at developing innovative ideas (product, process, service, etc) as well as training on the

Funded activities may also include part of the cost of accessing global business networks/clusters, which also involves the adopting of new marketing tools and accessing new markets. Eligible costs include the purchase of equipment, materials, staff recruitment and outsourcing. The total budget for this tender is planned in the amount of 141.7 million kuna, and the investment will support up to 141 small and medium-sized Croatian companies with individual grants of up to 1 million kuna.

In general, the focus of policies and measures of this EU programming period is the pursuit of systematic integration of sustainable development and green and digital transformation of the economy, which is something most Croatian technology companies also place a focus on, be it directly or otherwise. Thus, in the second quarter of the year we can expect the tender called "Digitisation Vouchers" with a maximum grant of 150,000 kuna, as well as the tender called "Digitisation Grants" with a maximum grant of 750,000 kuna on offer.

During the year, the announcement of the tender "Support to companies for the transition to energy and resource efficient economy" with a maximum amount of support of 7.5 million kuna is expected, and eligible applicants will be micro, small and medium-sized enterprises, and investments will be directed to energy-intensive industries.

In addition to all of the above, in the second half of the year, we can expect the announcement of the tender "Strengthening sustainability and encouraging the green and digital transition of enterprises in the tourism sector." Eligible applicants for this tender will be micro, small, medium and large companies engaged in the field of tourism and hospitality, and the primary focus will be on investing in less developed tourist areas of Croatia.

In the potential lack of pre-tender public consultation, the timeframe for preparing extensive draft documentation is relatively short. The very serious preparation of projects that maximises the probability of success in the tender takes months and requires a significant amount of human resources. At the same time, despite the significant increase in the amount of available funds, the level of competition among interested applicants has increased, as more and more companies are turning to this form of financing.

On top of that, significant interest in grants can be expected from young and innovative companies, such as Croatian technology companies, given the fact that traditional banking financing is often not a realistic option for them, while alternative sources of financing in Croatia are still at negligible levels.

For more, check out our dedicated business section.

February the 24th, 2022 - Croatian cyber-soldiers are being used to help Ukraine out in its hour of need as Russia launches its invasion of that Eastern European country.

As Poslovni Dnevnik writes, Croatian cyber-soldiers who are being sent to the aid of Ukraine during these tremendously difficult times are part of the CRRT, a team for rapid action in cyberspace, which was established by Lithuania, Estonia, Croatia, the Netherlands, Poland and Romania as one of the European Union's ultra modern and enhanced defense cooperation projects.

The Republic of Croatia is among a group of six European Union (EU) member states that are helping Ukraine by mobilising its military cyber forces for rapid action. It is one in a series of reactions from European Union allies to the Russian military's incursion into another part of territory that Russia is formally but illegally trying to seize from Ukraine - the self-proclaimed separatist republics of Donetsk and Luhansk, which Russia recognised as independent states very recently.

According to Lithuanian defense sources, the CRRT, including the aforementioned Croatian cyber-soldiers has been activated to help Ukrainian institutions cope with growing cyber threats as Russia begins its invasion of Ukraine which has been strongly condemned across the board. This is the first time that this new European defense project has been activated in real circumstances. In a request for help, the Ukrainian Government said it expects CRRT members to be physically deployed in the City of Kiev in order to help defend key Ukrainian Government computer networks and systems.

So far, there has been no confirmation that the CRRT member states have agreed to physically send their military cyber experts, or that Croatia has agreed to send its people, be they Croatian cyber-soldiers or others, to Kiev, as reported by Vecernji list.

For more on Croatian politics, foreign policy and diplomacy, make sure to check out our dedicated politics section.