Saturday, 30 July 2022

Ex-Minister Released from Investigative Custody

ZAGREB, 30 July 2022 - Former HDZ minister Tomislav Tolušić, whom the European Public Prosecutor's Office (EPPO) suspects of misappropriating European funds to build a winery, was released from investigative custody on Friday.

Tolušić was released at the EPPO's request after all 16 witnesses who he could have tampered with were questioned.

The former minister was remanded in custody on 8 July, after he and Željko Ferenc, an employee at the Paying Agency for Agriculture, Fisheries and Rural Development, were arrested in Virovitica.

Ferenc was released from investigative custody on Thursday after having been previously suspended.

Following their arrest, the EPPO said, without revealing their identities, that Tolušić, as an owner of a family-run farm, submitted an application for a project for the construction and equipment of a winery, worth HRK 4.65 million, with the Paying Agency for Agriculture, Fisheries and Rural Development in early May 2020, and that the level of co-financing with European funds was 70%.

In the application, Tolušić falsely stated that the financing of the project would be secured with a loan from a financial institution. However, he did not apply for a loan, and he financed the project with money whose legal origin cannot be proved, the prosecutor's office said.

Moreover, he did not inform the agency about the change in the financing, and was granted HRK 2.92 million in aid.

Tolušić applied to another tender, advertised by the agency on 2 June 2021 for the construction of new vineyards and the reconstruction of existing ones.

For the second application, Tolušić reportedly incited Ferenc to give a positive opinion on his application for the grant, although the application falsely stated that the piece of land in question had no crops planted in it, when in fact he had previously planted a vineyard there.

However, the Ministry of Agriculture and the Croatian Agency for Agriculture and Food refused to issue a positive opinion on the submitted technological project due to knowledge of the existence of a vineyard already planted there and due to other observed irregularities, the EPPO said.

After the rejection, Tolušić removed the grapevine that had been planted, obtained a new technological project and submitted it with the application.

He expected to receive a grant of HRK 1.5 million, with 85% being co-financed by EU funds, that is, more than HRK 1.3 million. However, the agency established that he did not meet the conditions, so the funding was not granted, the EPPO said.

For more, check out our politics section.

Friday, 20 May 2022

EC Grants Croatia Extension of Deadline for Using EUSF Funds for Earthquake Relief

ZAGREB, 20 May 2022 - The European Commission has granted Croatia an extension of the deadline for using money from the European Union Solidarity Fund (EUSF) for the repair of the earthquake damage.

"Today, the Commission has decided to exceptionally grant Croatia the possibility to extend until 30 June 2023 the deadline for the use of the financial contribution from the EU Solidarity Fund to compensate for the damage of the earthquakes that severely hit the country in 2020 and 2021," the Commission announced on Friday.

Croatia has been allocated over €1 billion from the Solidarity Fund to remedy the damage caused by the earthquakes that struck Zagreb in March 2020 and Sisak-Moslavina County in late December 2020 and January 2021. The usual deadline for the use of funding is 18 months, and in this case, it expires in June this year.

Prime Minister Andrej Plenković met with Commission President Ursula von der Leyen in February this year, after which it was announced that the deadline would be exceptionally extended for a year. The Commission has never before extended the usual deadline.

"Croatia was hit twice by strong earthquakes, first in Zagreb and then in the city of Petrinja and the Sisak-Moslavina county. All of that happened during the first wave of the Covid pandemic, considerably hampering the recovery efforts. Ensuring that Croatia can fully benefit from the financial support from the EU Solidarity Fund for the reconstruction of the two regions is of utmost importance for the population and a sign of strong and concrete solidarity by the European Union," said Commissioner for Cohesion and Reforms, Elisa Ferreira.

For more, check out our politics section.

Tuesday, 3 May 2022

506 Million Euros for Green Transition for Three Croatian Regions

May the 3rd, 2022 - Three Croatian regions in different parts of the country are set to get their hands on as much as 506 million kuna in the name of pushing the green and digital transition forward.

As Poslovni Dnevnik writes, the three Croatian regions of Pannonian Croatia, Northern and Adriatic Croatia will receive a separate allocation of 506 million euros for further investments in green and digital transition of their local economies, as was announced on Friday the Minister of Regional Development and EU Funds, Natasa Tramisak, at the opening the Conference on Industrial Transition of Croatian Regions held at the Faculty of Agrobiotechnical Sciences in Osijek.

Back in December 2020, the Ministry of Regional Development and European Union (EU) Funds began the process of industrial transition of NUTS 2 Croatian regions, which includes Adriatic, Northern and Pannonian Croatia. Namely, these regions are significantly below the EU development average and have the potential to strengthen their respective competitiveness by using the opportunities offered by global trends to revive economic growth and increase overall productivity.

The transition will be implemented with the help of European Union funds under the new Integrated Territorial Programme, which provides for the allocation of 506 million euros, which will be available only to enterprises owners and businessmen from the aforementioned three Croatian regions.

"We're completing the process of approving operational programmes, of which the plans for the industrial transition of Croatian regions for the period 2021-2027 are an integral part," added Tramisak.

Croatia's more obvious shift at least towards the digital transition occurred primarily as a result of the global coronavirus pandemic which saw very many ''in person'' errands quickly made available online, and more and more can be done administratively from the comfort of the home thanks to the popular e-Citizens (e-Gradjani) portal. That said, Croatia is still very much behind the times in many of these aspects, hence the cash injections aimed at improving this quickly as part of the EU's wider goals as a bloc.

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

Monday, 2 May 2022

Zagreb Aims to Withdraw Maximum Amount of EU Cash for Planned Projects

May the 2nd, 2022 - The Croatian capital city of Zagreb is aiming to withdrawn the maximum amount of European Union (EU) cash possible in order to complete all of its planned projects.

As Poslovni Dnevnik writes, the City of Zagreb is among 100 European Union cities and partner countries that will participate in the so-called ''mission of EU cities'', which aims to reduce the carbon footprint being caused in them to an absolute minimum by the year 2030, for which the European Union will allocate 350 million euros from the Horizon Europe programme. According to the European Commission (EC), 75 percent of EU citizens currently live in urban areas.

These areas account for more than 65 percent of the world's energy consumption, and thus more than 70 percent of its CO2 emissions. It is therefore important that cities such as Zagreb be ecosystems for experimentation and innovation to help everyone else in their transition become entirely climate-neutral by 2050. The European Commission will invite 100 selected cities, including Zagreb, to draw up climate agreements, which will include a general plan to achieve climate neutrality across all sectors.

Zorislav Antun Petrovic, President of the Environment Committee of the Zagreb City Assembly, claims that Zagreb is fully ready for the energy transition.

"A few months ago, we presented precisely how we see the green transition of Zagreb to the Committee. The focus is being placed on renewable energy sources, first of all numerous solar power plants on public buildings, and then on private ones, ecological transport, the energy efficiency of lighting - where a lot has already been carried out.

There is also green integrated planning, a centralised heating system, geothermal energy, an energy efficient block reconstruction of the city following the aftermath of the 2020 earthquake, sustainable social housing, a sustainable urban mobility and ZET as a green energy transit on the list, too,'' explained Petrovic, adding hat he is more than sure that Zagreb will be able to withdraw the maximum amount of funds for its planned projects from this EU project as well.

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

Thursday, 31 March 2022

Croatia Improving In EU Funds Absorption

ZAGREB, 31 March 2022 - Croatia has surpassed nine EU member states in terms of EU funds absorbed since 2020 and now ranks 19th, the Regional Development and EU Funds Ministry said on Thursday.

According to Cohesion Data, the European Commission platform on finances and achievements under the European Structural and Investment Funds 2014-2020, in 2020 Croatia ranked 27th among the EU's then 28 countries in terms of payments.

Croatia is better at absorbing funds than Spain, Italy, Slovakia, Romania, Belgium, Denmark, Luxembourg and Austria. Lithuania has absorbed the most EU funds.

In the 2014-20 period, Croatia had €10.73 billion from ESIF at its disposal. By 24 March 2022, projects worth €13.4 billion were contracted, or 124.91% of the allocation, above the EU average of 113%.

Of that amount, €7.32 billion was paid and €6.03 billion was verified, 68.17% and 56.17% of the allocation, respectively. The EU payments average is 63%.

If €763.17 million from REACT EU and €597.56 million added to the Rural Development Programme are added to the original allocation, the total allocation by 2023 amounts to €12.09 billion.

Between 2013 and 24 March 2022, Croatia received from the EU budget HRK 49.06 billion more than it paid into it. When the advance paid for the National Recovery and Resilience Plan is included, Croatia is HRK 55.19 billion in the black, the ministry said.

Politics: For more, check out our politics section.

Tuesday, 1 March 2022

European Union Cash Up for Grabs for Croatian Technology Companies

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.

Sunday, 20 February 2022

Why Was Croatia Granted EU Fund Use Delay? Plenkovic Explains

February the 20th, 2022 - The European Commission (EC) very recently granted the Republic of Croatia an EU fund use delay. The cash in question is from what's known as the Solidarity Fund.

While 2020 was a horrendous year for the vast majority of the globe, if not all of it, thanks to the emergence of the novel coronavirus, SARS-CoV-2 and its journey around the world in the form of a pandemic, Croatia also suffered two devastating earthquakes. One struck the City of Zagreb in March, and another struck Sisak-Moslavina County in Central Croatia at the very end of December that year. Known as the Petrinja earthquake, this shattering natural disaster is still fresh in people's minds and the reconstruction process is moving at a classical snail's pace.

The situation here in the very heart of Zagreb isn't miles better, but when it is compared to the situation that has been left to fester in Petrinja, Glina and other nearby locations, it's difficult to fathom how December 2020 was now so long ago. 

We recently wrote about PM Andrej Plenkovic having successfully secured an EU fund use delay from the European Commission which would allow those funds from the aforementioned Solidarity Fund to be utlised until June 2023. Plenkovic has since been asked how and why that approval was given from the EC.

As Poslovni Dnevnik writes, Prime Minister Andrej Plenkovic recently commented on current events and his stay in the Belgian capital of Brussels following probes from journalists. He was also asked if Ursula von der Leyen had asked him to explain why the post-earthquake reconstruction following 2020's natural disasters in Croatia is going so painfully slowly.

“There are two fundamental reasons for that, you have progressive damage and you've also got a global pandemic. These are extraordinary circumstances, they're acts of God. Other countries had the use of the same Solidarity Fund, but not in such conditions,'' explained Plenkovic.

Asked whether or not things being classed as an act of God was the only reason why the Republic of Croatia had successfully received an EU fund use delay, Plenkovic said that it was.

"I don't know another capital city that was hit by such a strong earthquake in these circumstances," Plenkovic briefly commented.

For more, check out our dedicated politics section.

Saturday, 19 February 2022

Plenkovic Secures Croatian EU Fund Absorption Extension Until Mid-2023

February the 19th, 2022 - Prime Minister Andrej Plenkovic has managed to secure a Croatian EU fund absorption extension until the summer of 2023 owing to the unusual circumstances surrounding the natural disasters which struck Central Croatia back in 2020 in the form of devastating earthquakes.

As Poslovni Dnevnik writes, the European Commission (EC) has stated that when it comes to Croatian EU fund absorption, more precisely money from the Solidarity Fund, it will be sympathetic towards the circumstances surrounding it.

Those of us living in the City of Zagreb and who remember the earthquake happening and the sheer amount of time it took for any sort of real clean up to begin will have a particular understanding of the circumstances that have caused the Prime Minister to request an extension. Many obstacles, mainly in the form of paperwork and a slow administration which wasn't helped by the pandemic continue to exist on the road to post-earthquake recovery, particularly in Sisak-Moslavina County following December 2020's horrific earthquake.

"Glad to meet with Andrej Plenkovic today. We discussed reconstruction work supported by the European Union after the Zagreb and Petrinja earthquakes. Given the exceptional circumstances, the Commission will look favourably at the request to align deadlines for absorption of EUSF funds to June 2023,'' she wrote on her Twitter.

Prime Minister Andrej Plenkovic also took to Twitter and spoke about the meeting.

"Following the arguments presented by Ursula von der Leyen, the European Commission will approve the use of EUSF funds to repair the damage from the Zagreb earthquake until June 2023, which is in line with the period for the use of the Banovina earthquake allocation (of funds) due to progressive damage," he wrote in his own tweet.

For more on Croatia and the EU, as well as Croatian EU fund use across various sectors, make sure to check out our dedicated politics section.

Thursday, 17 February 2022

EU Fund For Zagreb Quake Relief Can Be Tapped One More Year

ZAGREB, 17 Feb 2022 - Croatia will be able to use money from the European Solidarity Fund for earthquake relief until June 2023, which is one year longer than the initial 18 months, Prime Minister Andrej Plenković and the European Commission President, Ursula von der Leyen, said after they met in Brussels on Thursday.

The commission will approve the use of EUSF for earthquake reconstruction in Zagreb until June 2023, which has been adjusted to the period for the use of the allocation because of the earthquake in Banovina and progressive damage caused, Plenković tweeted on Thursday.

Von der Leyen tweeted a similar message

“Glad to meet Andrej Plenkovic today. We discussed reconstruction work supported by the EU after the Zagreb and Petrinja earthquakes. Given the exceptional circumstances, the Commission will look favorably at the request to align deadlines for absorption of EUSF funds to June 2023," tweeted von der Leyen.

Croatia was granted €68.37 million for earthquake relief which according to the provisions of the European Union Solidarity Fund can be absorbed until June this year but that has now been extended for another year after Plenković met with von der Leyen.

We appreciate that the Commission has taken into account the specific situation Croatia was faced with after the two devastating earthquakes that struck this area while we were simultaneously dealing with the COVID-19 pandemic, which is a force majeure, Plenković added.

For more, check out our politics section.

Sunday, 2 January 2022

EU Funds Misuse in Croatia: 35 Alleged Cases Already Under Investigation

January 2, 2022 - The European Public Prosecutor's Office (EPPO) in Zagreb's Ilica currently has 35 cases indicating possible EU funds misuse.

The State Attorney's Office submitted 25 cases of EU funds misuse after 10 November, the date after which they were obliged to submit cases within the possible competence of the European Prosecutor's Office, reports Jutarnji List. Until that date, the State Attorney's Office had submitted 10 such cases, including the one on the so-called affair software that resulted in the arrest of former Minister Gabrijela Žalac. The former minister decided that the MRRFEU would make this purchase at a price much higher than the market price for the development of software with such technical specifications and functionalities.

It is alleged that, in order to carry out what was agreed, the former minister first decided, in 2017, to conduct a negotiated procurement procedure without prior publication of a public invitation to tender, with an overestimated procurement value of HRK 9,860,000.00 (EUR +/- 1.31 million); and in that process, the companies linked to the second suspect were invited to submit their bids.

A total of 35 cases are on the table of Tamara Laptoš, who heads the European Prosecutor's Office, which also includes Tomislav Kalember and Sani Ljubičić, but that does not mean that as many investigations are being conducted. Namely, these are cases submitted by the State Attorney's Office in which suspicions of misuse of European money are expressed.

The European Public Prosecutor's Office investigates and prosecutes the following types of fraud and other criminal offenses affecting the EU's financial interests: expenditure and revenue fraud, VAT fraud (if involving two or more Member States and worth at least 10 million), money laundering of the EU budget, active and passive corruption or embezzlement affecting the EU's financial interests and participation in a criminal organization if its activities are aimed at committing crimes against the EU budget.

For more, check out our politics section.

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