Thursday, 28 July 2022

Croatia To Submit Request For Membership Of European Stability Mechanism

ZAGREB, 28 July 2022 - The government adopted a decision to accept a letter expressing interest in submitting a request for Croatia's membership of the European Stability Mechanism (ESM), which Croatia should join in Q1 next year.

The ESM is an intergovernmental organisation established by the euro area member states in 2012. Its mission is to enable the countries of the euro area to avoid and overcome financial crises and to maintain long-term financial stability and prosperity.

The ESM provides loans and other types of financial assistance to member states in a difficult financial situations.

ESM shareholders are exclusively countries of the euro area. Croatia will join the euro area on 1 January 2023, and it is expected it will join the ESM in Q1 2023.

Finance Minister Marko Primorac said after a government session that the ESM had a total capital of nearly €705 billion, which consists of more than €80 billion of paid-in capital ensured by ESM members and nearly €624 billion of callable capital.

Every member contributes to ESM capital based on its share in the total EU population and GDP. Since Croatia's GDP per capita is below 75% of the EU average, we will have the possibility of a temporary correction of the capital contribution key for a period of 12 years, until 2035, said the minister.

Croatia will, pay in a contribution of €419 million.

The ESM provides us with additional insurance in case of financial crises, inability to access the capital markets, or financial difficulties, so that is a long-term benefit and has a positive effect on our credit rating, Primorac said.

As for the government's decision made today, which established criteria for the allocation of assistance to local units for functional and real consolidation, he said that the money granted for functional consolidation depends on the number of functions that would be common and the number of local units involved in the agreement. The assistance will be provided for financing employees in charge of those functions.

According to him, the package for real consolidation is "generous", and it provides assistance for settling outstanding credit and financial obligations on 30 June 2022. It also includes additional assistance in the form of current and capital transfers and aid totalling double the amount the smaller local unit received under the fiscal equalisation programme, as well as capital aid of HRK 7.5 million.

For more, check out our politics section.

Friday, 15 July 2022

Sabor: Marko Primorac Confirmed as New Finance Minister

ZAGREB, 15 July 2022 - The Sabor on Friday confirmed Marko Primorac as the new Minister of Finance with 77 votes in favour and 55 against, after former minister Zdravko Marić left the government at his own request.

After Minister Primorac swore that he would conduct his duties conscientiously and honourably, in accordance with the Constitution and laws, Parliament Speaker Gordan Jandroković wished him success in his demanding and responsible work.

Primorac is an associate professor at the Faculty of Economics in Zagreb. He studies public finances, local finances, the tax system and public debt management.

He has worked with the Ministry of Finance on a number of task forces in different rounds of tax reforms, as well as on the model of a financing system for local and regional self-government units.

From 2018 to 2020, he served as economic advisor to former president Kolinda Grabar-Kitarović.

Since 2016, he has been a member of the Steering Committee of the Croatian Pension Insurance Institute. From 2017 to 2018, he was the deputy chairman of the Supervisory Board of the Hrvatska Elektroprivreda electricity provider and since 2018 he has been the deputy chairman of the Audit Board of the Hrvatske Lutrije national lottery.

Since 2021, he has been an external member of the parliamentary Finance and Central Budget Committee.

Prior to today's vote in the Sabor, Primorac's appointment was supported yesterday by the parliamentary Finance and Central Budget Committee after being interviewed by the committee.

For more, check out our politics section.

Thursday, 14 July 2022

Primorac Will Contribute To Maintaining Macroeconomic Stability, Plenković Says

ZAGREB, 14 July 2022 - Prime Minister Andrej Plenković said on Thursday he was confident that as the new minister of finance, Marko Primorac would contribute to the implementation of the National Recovery and Resilience Plan and to maintaining macroeconomic stability, among other things.

Plenković was speaking at the start of a session of the parliamentary Finance and State Budget Committee on the government's nomination of Primorac for minister of finance.

Plenković said he was also confident that Primorac "will continue the good trajectories that are already visible, namely that we are again rapidly reducing the public debt after meeting all the criteria for euro area membership."

He is confident that Primorac will keep Croatia in the investment-level credit rating, that, in cooperation with other ministers, he will look for solutions for a new set of measures that will help citizens weather the energy and food crisis, and that he will propose measures to curb inflationary pressures.

Plenković said Primorac was an expert in his prime with the capacity to deal with crises and a very significant international and academic experience. "I expect him to contribute with his knowledge and creativity to the implementation of the government's programme and to finding solutions to the various crisis situations we are faced with."

Plenković recalled the government's tax and other reforms as a result of which, he said, Croatia would soon have the highest investment rating ever with the world's three biggest rating credit ratings.

He said it was necessary to continue to ease the tax burden on citizens and adopt other measures that would increase economic activity which, he added, have made the Croatian economy resilient to crises.

Plenković said Primorac had cooperated with the Finance Ministry in many tax reform working groups as well as on a financing model for local government units.

Parliament is expected to vote on Primorac's nomination tomorrow.

For more, check out our politics section.

Wednesday, 6 July 2022

PM: New Finance Minister Will Gain Good Reputation Just Like Marić

ZAGREB, 6 July 2022 - Prime Minister Andrej Plenković on Wednesday thanked Zdravko Marić for the contribution he made as Minister of Finance, saying that he "has done a great job" and said that the new minister, Marko Primorac, is also excellent and will gain a good reputation with his work, just like Marić.

Addressing a press conference held in Government House after a meeting of the ruling majority, the prime minister said that he has a very good relationship with Marić and that they had a long discussion about his leaving the government.

Every government member supposed to want to work 300 percent

"I am guided by only one principle, anyone who wants to be a member of the government has to want to work 300 percent. He (Marić) worked brilliantly for 6.5 years and obviously the time has come when he decided to do something else for his own reasons. I respect that," said Plenković and underscored that he appreciates Marić's contribution.

Everything that is important for our economic and fiscal policy in the future, will be done with Marko Primorac, Davor Filipović, Marin Piletić and other government members, he added, referring to two new ministers and Primorac whose candidacy is to be confirmed by the parliament,

Plenković would not reveal where Marić is going and added that Marić had told the HDZ leadership, the cabinet and the ruling coalition that he still does not have a clear picture of what and where he will work in the future.

"When he is ready to say something more about that he will do so," the prime minister added.

Plenković underscored that "no one can work in the government for a hundred years" and everyone has an expiry date.

"We have new ministers. We are replacing young ones with even younger, equally good and smart ones. You will get used to them, as will the public, and we will continue to function," he told reporters.

Given the very good reputation that Marić enjoys in the professional and general public, reporters asked how long it would take for the future minister to "adjust," with Plenković saying that the state has to function, and Primorac will gain an equal reputation with his work.

"You will see that Primorac is great, smart, eloquent. He understands the matter and will adapt quickly. He knows people in the ministry. Just like Zdravko gained his reputation for his work Marko Primorac will too," said Plenković.

Asked if he was personally affected by Marić's resignation or whether he experienced it as disloyalty, Plenković said "No. We have been through so much." He underscored how they achieved common goals, entry into the euro area, upgrade of Croatia's credit rating, exiting the macroeconomic imbalance mechanism and so on.

Primorac to also be non-partisan minister

Primorac, like Marić, will be a non-party member of the government and Plenković underlined that he had received the unanimous support of HDZ party bodies.

Asked whether there wasn't anyone in the HDZ who could fill that position, he said there was but that he wanted "someone who will be the right person at the right time."

There are others and this man is ready to be engaged as much as possible. We are just waiting for him to recover from COVID, he added, saying that Primorac will be as good as Marić because that is the "condition for him to be a minister."

For more, check out our politics section.

Wednesday, 6 July 2022

Finance Minister Zdravko Maric Steps Down, Marko Primorac New Candidate

July the 6th, 2022 - Finance Minister Zdravko Maric has stepped down from his longtime role at his own request, it has emerged. Marko Primorac will step in as the country's new Minister of Finance.

As Index writes, Finance Minister Zdravko Maric is leaving his position within Plenkovic's government at his own request. He has already informed Prime Minister Andrej Plenkovic about everything, and further information should be published later on today after the meeting of the cabinet of the government.

"It's true that Zdravko Maric is stepping down from his position of Deputy Prime Minister and Minister of Finance on his own initiative. The Prime Minister will inform the members of the cabinet tomorrow about Maric's departure. We're grateful to him for the contribution he has made in the government over the past six years. The government will continue to work as it did before to solve all the challenges we're facing in the crisis, protecting people, and the economy. The Prime Minister will present Marko Primorac to the parliamentary majority as a candidate for the new Minister of Finance, and to the members of the Croatian Parliament during the next week," the government told Index.

Maric's biography

Finance Minister Zdravko Maric joined the government from his former position within the former Agrokor, he survived several situations and affairs and is the author and implementer of several rounds of tax reform.

Maric was born on February the 3rd, 1977 in Slavonski Brod and graduated from the Faculty of Economics in Zagreb in 2000, majoring in finance. In 2004 he received his master's degree at the same faculty with the topic of his master's thesis entitled "An analysis of capital inflows to transition countries through the impact on investments".

In 2007, he completed the Executive Education Programme "Public Financial Management", at Harvard University, the J.F. Kennedy School of Government. He received his doctorate in 2008 at the Faculty of Economics in Zagreb on the topic "The impact of foreign direct investment on the productivity of Croatian companies".

He worked as an assistant at the Institute of Economics in Zagreb, as an external associate - lecturer at the Zagreb School of Economics and Management, and as an external associate - lecturer at the International Graduate Business School in Zagreb.

From Agrokor to the Croatian Government

In 2006, he started working in the Ministry of Finance as Assistant Minister for Macroeconomic Analysis and Planning, and in 2008 he became State Secretary in the Ministry of Finance.

From 2012 to 2016, he worked at Agrokor as an executive director for strategy and capital markets. From that position, he came to the position of non-partisan finance minister in the government of Prime Minister Andrej Plenkovic.

After the fall of Agrokor and its longtime owner Ivica Todoric, the opposition demanded his departure in 2017 and initiated a no-confidence motion. The three ministers from MOST, who were part of the government at the time, were in favour of his departure, which is why they themselves were dismissed. The vote of no confidence did not pass in Parliament either.

A summer holiday at the Bellevue Hotel with question marks hovering above it...

Finance Minister Zdravko Maric is allegedly stepping down from his position after a recent story broke about his stay "over an extended weekend" at the Bellevue Hotel in Mali Losinj.

Back in June 2019, Maric stayed with his family in the luxurious Bellevue Hotel in Mali Losinj. For accommodation for two adults and two children, the Ostro portal revealed, he paid 291.20 euros (2153 kuna) per night, which is three times lower than the usual price for that period of the year. In other words, Minister Maric received a huge discount that not all hotel guests can count on.

"I didn't influence that decision, nor did I ask for any discounts. Privately, and long before I was a minister, it never once happened to me,'' Maric said of the event.

He was aboard the 800,000 euro yacht owned by entrepreneur Blaz Pavicic

Back in August 2021, Maric came under the scrutiny of the Commission for deciding on conflicts of interest after it was revealed that he had spent four to five days on the 800,000-euro yacht owned by entrepreneur Blaz Pavicic. At first, Maric refused to give the name of the owner of the yacht, and then, after revealing the name, he said that this entrepreneur had nothing to do with his department in terms of tax debt or HBOR loans, and that the concessions owned by Pavicic's companies were within the department of the Ministry of Transport.

It was said that Finance Minister Zdravko Maric deliberately forgot that his Ministry, more precisely the Customs Administration, is extremely important for the business of Pavicic's companies.

Maric is also accused that, together with the government, he knowingly misled the Commission for deciding on conflicts of interest three years earlier, when in connection with the Lex Agrokor case, i.e. the Borg affair, he said that he met with Ivica Todoric only twice, and on February the 26th and March the 3rd, 2017, while he failed to mention other meetings.

Maric would have remained innocent had it not been for Martina Dalic's testimony...

Finance Minister Zdravko then told the Commission that at those two meetings with Todoric, he didn't present or convey any positions, opinions or proposals. He also said that no decisions or conclusions were made at those meetings, and also that his role was a passive one.

This was his key evidence that he wasn't in a conflict of interest in connection with the Todoric case, that is, Lex Agrokor. The commission acquitted him in that case.

Maric's claim would have remained the same if the statement to the USKOK of former vice-president Martina Dalic hadn't come to light, who admitted to the investigators that Maric was present at at least five meetings back during February 2017, which concerned not only the creation of Lex Agrokor but also meetings with the leadership of Agrokor. The crucial meeting is from February the 19th, when Prime Minister Andrej Plenkovic ordered Dalic and Maric to go to a meeting with Todoric.

At that meeting, Todoric asked for the help of HBOR, and Maric was given a presentation of the current financial situation within the then enfeebled Agrokor. After this information came to light, and it was contrary to what Maric said the first time before the Commission, the Minister of Finance then defended himself, saying that he had not lied.

"I read and see a lot of constructions that I told some lies and untruths. This is all easily verifiable," said Maric, inviting journalists to check what he was asked before the Commission and what he answered.

But the Commission, which acquitted him in the first trial, decided back in August 2018 to renew the proceedings against both Maric and Dalic. At the end of 2018, they made a decision that Finance Minister Zdravko Maric and former Deputy Prime Minister Martina Dalic had "violated the principle of public office in the case of Agrokor". Both Maric and Dalic appealed against that decision.

Marko Primorac is the new Finance Minister candidate

The Croatian Government has confirmed the information that Marko Primorac is the new candidate for the position of Finance Minister.

"The Prime Minister will present Marko Primorc as a candidate for the new Minister of Finance to the parliamentary majority, and to the members of the Croatian Parliament during the next week," Index was told.

"Marko Primorac (1984) is a professor at the Faculty of Economics in Zagreb, whose area of ​​expertise is financial management in the public sector, tax policy and fiscal decentralisation," added the Government. Marko Primorac was also an economic adviser to Kolinda Grabar-Kitarovic back when she was president.

For more, make sure to keep up with our politics section.

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