Tuesday, 25 May 2021

Employers Propose Continuation of Government COVID Subsidies

ZAGREB, 25 May, 2021 - The Croatian Employers' Association (HUP) has proposed measures for maintaining liquidity and launching private investments which include retaining jobkeeping measures and covering a portion of fixed costs, ensuring favourable loans and prolonging loan maturity.

In expectation of COVID measures and lockdown of businesses being lifted, HUP addressed Finance Minister Zdravko Marić and underscored that maintaining liquidity is not only relevant during the lockdown period but should be extended for a longer period, and that recovery can only be possible if investments are boosted.

HUP proposes that jobkeeping measures be extended even after busines restrictions are lifted until such time that  all enterprises generate at least 90% of their pre-pandemic revenue in 2019. HUP believes that abolishing support measures for the economy should be gradual, depending on the epidemiological situation, but also on the circumstances in each individual sector so that Croatia is not faced with a wave of bankruptcies and layoffs.

HUP also calls for a portion of fixed costs to continue to be covered, taking account of the percentage revenue has decreased, and for facilitating access to loans for liquidity and working capital, including guarantee schemes for micro, small and medium-sized enterprises.

HUP advocates possibly transforming a portion of loans into grants and for the moratorium on loan maturities to be extended for existing loans, along with state guarantees, at least until the end of this year and longer if need be, based on transparent criteria.

HUP proposes additional support loans for exporters and enterprises investing in the 4.0 industry, and support for investments by large companies through increased support for EU co-funded projects.

It also recommends the possibility of deleveraging debts between companies to prevent a chain reaction, and for non-recoverable loans to be identified faster, as well as speeding up bankruptcy procedures, and introducing additional tax cuts.

"We believe that government subsidies to cover the disrupted economic activities due to the COVID crisis should continue until such time that enterprises can do business normally and save jobs without that support," HUP said.

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Thursday, 25 February 2021

Croatian Employers Association Wants EU Funds Sum Directed to Private Sector

February the 25th, 2021 - The Croatian Employers Association (HUP) want more European Union cash to be directed towards the private sector, with employers doing their best to urge the government to amend a certain document to ensure this happens.

As Novac/Gordana Grgas writes, at least 50 percent of European Union money is set to be available to Croatia in the next period, which is a total of about 24 billion euros. The Croatian Employers Association believes that around half of that massive amount should be made available to the private sector through calls for grants.

Employers are also urging the Croatian Government to properly amend the draft National Recovery and Resilience Plan (NPOO), the first version of which it has already sent to the European Commission (EC), and to further strengthen the role of the private sector in it.

Although the draft itself hasn't yet been published, and has only recently been roughly presented to the Croatian Employers Association, it appears that most of the 6 billion euros in grants from the NPOO, to be funded by the European Recovery and Resilience Mechanism as a result of the ongoing coronavirus crisis, could end up in reform-related public sector projects. As announced by the Croatian Employers Association at a recently held press conference, they plan to urgently send their remarks and suggestions to the European Commission itself. The final draft, they say, should be ready and sent to Brussels in April.

So far, a quarter of the money available to Croatia from EU funds has gone to the private sector, warned the Croatian Employers Association's Damir Zoric. The rest ended up going to public investments and public infrastructure, and Croatia needs larger investments in production for the development of the economy. Boris Drilo, President of the aforementioned associations's ICT Association explained that previous investments in the private sector have been shown to have a significant impact on economic growth.

"It's a minute until midnight for all of us, after which we can turn into either a princess or a pumpkin," he said in a rather picturesque manner. He also stressed that investments in private sector projects lead to sustainable employment for high-value jobs.

In February, the Croatian Employers Association conducted a survey among 1,700 enterprise owners, which showed that more than two thirds of them have prepared projects or investment plans for the next financial period in the amount of more than 21 billion kuna. As many as 94 percent of them would exclusively utilise EU grants, so there is extremely little interest in these so-called financial instruments, such as loans, and 30 percent say they will not be able to invest if these grants aren't enough.

On top of that, 28 percent of enterprise owners say they will not survive the ongoing pandemic crisis without better co-financing. Most of them stated that they would invest in capacity expansion and modernisation if they could be more certain, and the projects they have in those areas are the ones which are the most ready to be realised.

Drilo explained that, in general, the investment potential of available European Union money is significantly higher if it is directed to private investments, and it is also less burdensome for the state budget. Namely, a private company from the EU receives 40 to 70 percent of the investment amount as support, and the rest is financed by itself. The public sector, on the other hand, receives 85 percent of the money from the EU for the project, and the rest is added from public sources, which is less favourable.

Answering a question related to the National Recovery and Resilience Plan, the Croatian Employers Association said that the state should be prevented from competing with the private sector with its projects.

Ana Fresl, president of the Croatian Employers Association's Association of Professionals for EU Funds confirmed that the draft plan presented to them, in which only state bodies participated, exceeded the available six billion euros, and there has not been any feedback on which parts of the plan will remain and which will be discarded. In their belief, what was presented to them under the name "economy", the first version of the plan envisages a series of projects that have nothing to do with entrepreneurship whatsoever.

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Monday, 16 November 2020

Croatian Drug Manufacturers Call for Effective EU Pharmaceutical Strategy

ZAGREB, November 16, 2020 - The Association of Drug Manufacturers (UPL) with the Croatian Employers' Association (HUP) has called for the adoption of an effective EU pharmaceutical strategy to ensure equal access to drug production and supplies for the benefit of patients and the healthcare systems both in Croatia and the EU.

The UPL on Monday sent an open letter to all relevant stakeholders, including Croatian members of the European Parliament, the Croatian Ministry of Health and the Croatian Parliament's Committee on Health and Social Policy, to make maximum efforts and support the adoption of a robust EU pharmaceutical strategy that would work for the benefit of patients and the national healthcare systems in the European Union and Croatia.

Such a strategy would also reinforce the domestic pharmaceutical industry as the most important partner to the Croatian healthcare system and the strongest manufacturing industry in the country, the UPL said in the letter.

The future pharmaceutical strategy would support innovation in the EU pharmaceutical industry and the European manufacture of drugs and active pharmaceutical substances and thus help improve and accelerate patients' access to safe and affordable medicines, it added.

The new EU pharmaceutical strategy is expected to be adopted by the European Commission by the end of this year.

With its open letter the UPL joined Medicines for Europe, the organisation representing the European generic, biosimilar and valued added pharmaceutical industries, in setting five key priorities - supply security, sustainable and affordable budgets for medicines, aligning regulation on medicines with the digital age, retaining and supporting manufacturing technologies of interest to Europe, and aligning the objectives of the industry with the objectives of public healthcare.

The UPL said that more than 60 percent of the medicines used by patients in Croatia come from its members, which is why it considers the new EU pharmaceutical strategy key for the overall stability of the healthcare system and the successful functioning of the economy as a whole.

The UPL members generate about HRK 7 billion in annual revenues, including as much as HRK 5 billion from exports, UPL chairman Mihael Furjan said. 

The Croatian pharmaceutical industry exports its products to about 60 countries round the world, including the United States and EU member states.

Thursday, 6 August 2020

Damir Zoric Elected New Director General of Employers' Association

ZAGREB, Aug 6, 2020 - The Croatian Employers' Association (HUP) Executive Board on Thursday elected Damir Zoric the new director-general, and the decision takes effect on September 1.

Until now, Zoric was the acting general director after director-general Davor Majetic announced on July 13 that he was leaving HUP. Majetic was director-general since 2010.

Sunday, 2 August 2020

Employers Say Their Biggest Wish Is Lower Taxes and Parafiscal Charges

ZAGREB, Aug 2, 2020 - Four-fifths of Croatian companies are bracing for an economic downturn this year, and 70% of them say that the biggest help to them would be a reduction of fiscal and parafiscal charges in the next year, shows a survey conducted by the Croatian Employers' Association (HUP), which has about 6,000 members.

Furthermore, 36% of those polled say that their priorities are better transparency, digitalisation and a smaller and more efficient state and public administration. They are also hoping for longer deferrals of tax payments during the corona crisis.

One in 12 employers expect a rise in revenues

The survey, conducted in June, shows that as many as 78% of employers expect a decline in their revenues in 2020 in comparison to 2019, and half of them expect a fall of above 20%. On the other hand, 14% of those polled expect the same level of revenues as in the previous year, while eight percent expect a rise in their revenues this year.

The HUP acting director-general, Damir Zoric, said that the findings of the survey show that the priority of employers is a further reduction of the tax burden.

Monday, 27 July 2020

One More Proposal for Meggle Plant in Osijek Proposed

ZAGREB, July 27, 2020 - The Croatian Association of Farmers (H.U.P.) on Monday proposed that the local authorities in Osijek-Baranja County should buy the dairy plant in Osijek which the current owner, Meggle, is going to close by the end of this year.

According to the proposal sent by the association to County Prefect Ivan Anusic and local councillors, the county should set up a company that can buy the Meggle plant and upon the stabilisation of its business, the plant should be offered for sale to the current 160 employees in the factory and contract farmers.

Recently Meggle announced that it would shut down its plant in Osijek.

After that, the Dukat company expressed its interest in buying up milk from Meggle contract farmers.

Dukat recalls that it cooperates with more than 2,000 small, medium, and big milk producers throughout Croatia.

"Milk production in Slavonia must not cease," says Dukat, a Zagreb-based company. 

A few days ago Agriculture Minister Marija Vuckovic and local authorities held a meeting with Meggle executives. After the meeting, the minister reassured all 280 contract farmers in the Osijek area that the buying up of their dairy products would continue.

Vuckovic said that contract farmers of Meggle Croatia should rest assured that the buying up of their products would continue. The 280 contract farmers have between 25,000 and 26,000 kilos of milk for sale. Dukat's representatives also attended the meeting.

Saturday, 16 May 2020

HUP Trade Sector Calls for Lifting Ban on Sunday Trading

ZAGREB, May 16, 2020 - The Croatian Employers Association (HUP) Trade Sector has said that the ban on Sunday trading currently in force is not an appropriate measure to fight the coronavirus epidemic, calling on the competent ministries to allow shops to work on Sundays and holidays without the disinfection break now in force.

In a letter sent on Saturday to the ministries of economy and the interior the sector said that the ban on Sunday trading, which caused more customers to shop on other days in the week, notably Monday, Saturday and Friday, did not apply to other sectors such as personal services or the restaurant business and was therefore potentially unconstitutional.

Shop opening hours can and should be regulated exclusively by the Commerce Act and not by civil protection bodies such as the coronavirus crisis management team and the public health institute, the trade sector says in the letter.

It also notes that the ban on Sunday and holiday trading will lead to lay-offs due to the reduced number of working hours.

As for the disinfection break, it said that it causes negative reactions among customers because of queuing before and after the break, the sector says.

The national union of workers in the trade sector earlier welcomed the decision by the COVID-19 crisis response team to ban shopping on Sundays and holidays and asked the government to send to parliament amendments to the Commerce Act under fast-track procedure so they could be adopted before parliamentary elections.

As for lay-offs, the union said that the ban on Sunday trading would not make 15,000 people in the trade sector redundant but that rather there was a shortage of at least that many workers if they worked in line with the relevant regulations and collective agreements.

The union also noted that it was not in favour of a complete ban on Sunday trading but rather allowing the trade sector to choose a certain number of Sundays to work.

Tuesday, 28 April 2020

HUP Asks for VAT on Protective Products to Be Reduced to 5%

ZAGREB, April 28, 2020 - The Croatian Employers' Association (HUP) on Tuesday called on the government to reduce the VAT rate on protective products to 5 percent.

HUP welcomed the government's decision to gradually ease restrictions and relaunch economic activity, but warned that protective equipment was essential for numerous businesses that do not have any way of obtaining it, saying that the government should donate such equipment.

"We call on the government to donate protective equipment to employers so they can follow the epidemiological measures and resume work after 45 days. Because of the cessation of their operation, businesses did not have any income, and there is the additional problem of the supply chain in Europe which cannot cover demand so that the majority of enterprises cannot acquire protective equipment on their own," HUP said.

HUP added that a large majority of SMEs that have reopened are faced with the problem of obtaining protective equipment, which incurs costs of several thousand kuna a month and puts a great burden on businesses.

HUP proposed that VAT be reduced to 5% for protective equipment, disinfectant, gloves, masks, overalls and so on, used in the fight against COVID-19.

HUP underlined that the reduced VAT rate would facilitate the health system, businesses and citizens in ensuring appropriate conditions for the efficient fight against the spread of the disease and its negative consequences.

More economy news can be found in the Business section.

Monday, 27 April 2020

Provision on State of Emergency Should Be Urgently Added to Labour Act

ZAGREB, April 27, 2020 - A provision on a state of emergency should be urgently added to the Labour Act because of the payment of wages during the coronavirus pandemic, and the regulation of workers' entitlements should be simplified in the conditions of reduced business activity, the Croatian Employers' Association (HUP) said in a statement on Monday.

On the first day of relaxed restrictions and ahead of a meeting of the Economic and Social Council, the HUP called on the social partners to discuss urgent amendments to the Labour Act.

The coronavirus pandemic has disrupted business activities through no fault of employers or workers, as a result of which businesses were forced to cease their operations and were left with reduced or no income, the HUP said, adding that employers cannot meet all the obligations under employment contracts and that it is no time for a dramatic increase in unemployment.

HUP director-general Davor Majetić said that the relief measures undertaken by the government had helped overcome the initial shock to the economy caused by the pandemic.

"Now is the time for businesses to overcome the negative consequences. The Labour Act does not provide for a state of emergency and we need to change that. The sets of government measures will become effective in May, but that does not mean that the circumstances will change for the enterprise sector for at least another three months. Employers cannot be expected to maintain the pre-crisis level of wages in all sectors. We have to get the wheel of the economy going by the autumn and no one can guarantee what the epidemiological situation will be like at that time of year. A state of emergency must be defined by the law," Majetić said in the statement.

The HUP said that in the circumstances of reduced income and increased costs many companies would be facing the challenges of how to keep jobs and ensure the necessary conditions to continue their business.

It said that labour legislation should simplify administrative arrangements for employment contracts, registration of workers, records of hours of work, job changes, recording of work performance, and work from home.

More economy news can be found in the Business section.

Thursday, 23 April 2020

HUP and HGK Welcome Decision to Relax Coronavirus Measures

ZAGREB, April 23, 2020 - The Croatian Employers' Association (HUP) on Thursday welcomed the government's plan to relax restrictions imposed due to the coronavirus outbreak, saying that clear guidelines were needed from epidemiologists and that solutions should be devised to boost the economy.

"Today's decision by the government provides a clear direction for intensifying business activities and for a return to work as a precondition for generating revenues and providing funds for workers' wages," the HUP said in a statement.

HUP director-general Davor Majetić appealed for clear and unequivocal instructions on safe work procedures to be given to employers as soon as possible.

"Businesses need precise instructions so that they can do all that is necessary to be able to operate in new conditions and in accordance with guidelines from epidemiologists," Majetić said, adding that this would enable resumption of business activity without a threat of penalties and business closures over unclear interpretations of guidelines.

"We think it is important that together with the government we ensure that the required measures are applicable and practicable," Majetić said.

He also mentioned the need to create conditions and solutions that would boost the economy next year. Citing conservative estimates according to which 300,000 people would be out of work by the end of the year, Majetić said: "That's why solutions need to be urgently devised to provide a stronger boost to the economy."

The HUP proposed nine measures to revive the economy: maintain liquidity for businesses, carry out an urgent analysis of parafiscal levies to reduce the highest ones at least for a specific period of time, reorganise public administration and the territorial structure of the country, digitise government services, reform labour legislation, resume public procurement procedures, increase private sector investment, improve cooperation between local businesses and local government, ensure that VAT is charged on settlement, and increase self-sufficiency in food and medicines.

The Croatian Chamber of Commerce (HGK) also welcomed the government's decision to gradually relax the measures imposed over the coronavirus epidemic, saying that this would slowly bring the economy back to life.

"We need to be very careful because everything we have done can quickly go down the drain. I believe that with responsible behaviour we can show that the economy and public health can go hand in hand," HGK president Luka Burilović said.

The HGK said it was pleased that its proposal had been accepted and that all retail shops would reopen as of Monday, but added that shopping malls should have been allowed to reopen too. It also mentioned the acceptance of its suggestion that public transport be restored so that workers could travel to work.

Burilović said that the government should consider allowing all hospitality businesses to resume work under strict conditions as of May 11 so that they would not have to lay off people. "Their reopening could save at least a bit of the tourist season, although we are aware that (the tourism industry) will take a long time to recover," he said.

More economy news can be found in the Business section.

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