Wednesday, 20 July 2022

Croatia in 2027: What Will the Country Look Like in 5 Years?

July 20, 2022 - Life in Croatia is mostly about remembering the past or living in the present, but when it comes to the future, what is it going to be like for Croatia in 2027? An overview of the things that will shape the country in the next five years.

It has been 31 years since Croatia declared its independence from Yugoslavia, 27 since the end of the homeland war, and 11 years since it completed its accession to the European Union. For those who have closely followed the development of Croatia as a country in those years, as well as those who were unaware of it, the feeling of surprise is shared. Objectively, the vast majority of people I know have expressed their amazement at the growth of Croatia when they see my photos and videos on Instagram, or when they read my articles on this portal. Some may consider them clueless, but the truth is that many believed that Croatia was just another country in Eastern Europe, torn apart by war and struggling to recover.

Few imagined that Croatia is currently one of the main tourist destinations in the world, with leading technology companies such as Rimac, or one of the safest countries on the planet. Many countries in the world have also gone through bloody independence processes or intense armed conflicts that have left them on the brink of economic, political, and social abyss. But with a population of no more than 4.7 million in 1995, Croatia's growth and development have been remarkable. Although it is worth mentioning the international support received in the last three decades, the resilience and determination of its population have been indisputable pillars in this process.

The country continues to go through constant changes, and some, in particular, seem to be decisive in speculating on what awaits around the corner. Just as we look back to analyze the evolution of the country, the positive and negative of its present, we ask ourselves, what lies ahead for Croatia in the next five years? We go over a few things to see what Croatia will look like in 2027.

Euro currency

This Monday, Croatia began producing its euro coins, which will enter circulation from January 1, 2023, replacing the kuna. As part of its accession to the European Union in 2011, among the conditions was the eventual change of currency to the euro, and last year the Croatian government announced that it would take place in 2023. Despite a strong rejection by the part of the population, in recent months this change has received the green light from different institutions such as the European Commission or the European Central Bank. Change is inevitable, and today some supermarkets are already displaying the prices of their products in both kuna and euro currencies.

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Image: Pixabay

Opinions are diverse. There are those who welcome the arrival of the euro as a way to strengthen economic relations with other powers on the continent, others believe that it will not affect the country in a positive or negative way, and many believe that it will plunge the country into a crisis and radically raise the costs of living. How will Croatia fare in the future with the euro as the new currency? Only a seasoned economist could dare to speculate, but perhaps it is the expectations that matter. In a country plagued by an imbalance between salary conditions and the cost of living, the European Union is expected to require Croatia to match the standards of other member states in the future. Changes in the prices of basic products and services, or the shift from using more coins instead of bills, are considered by many to be minimal changes compared to other macroeconomic trends, but they should still be considered in the first years and in what way it will affect the middle-class Croatian citizen and those mired in poverty.

The comparison is daring, but countries like Italy with the lira, France with the franc, Spain with the peseta, or Germany with the mark, had to go through the process of change that at first was confusing for many, but today, almost twenty years later, it is part of everyday life in those countries.

Schengen area

On June 29 of this year, the Council of the European Union formally initiated the process of admission of Croatia to the Schengen area, currently composed of 26 European countries. In previous years, many political leaders on the continent expressed their support for Croatia joining the Schengen area, and finally this year a vote will take place in October in which 22 member states (with the exception of Switzerland, Iceland, Lichtenstein, and Norway as they are not members of the EU and do not have voting rights) will decide on Croatia's accession. Once approved, Croatia will become the 27th country to access the benefits of such admission, in the same year that it will adopt the Euro as its currency.

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Photo: Nel Pavletic/PIXSELL

Should there be no unforeseen obstacles, all kinds of border controls will be lifted in Croatia starting on March 26, 2023, which will simplify travel to and from Croatian airports, sea ports, and land borders. For instance, passengers traveling from Croatia on direct flights to destinations in the member states of this area (26 European countries), after checking in for the flight and security control, will go to the exit for their flight without crossing the border or police control. This change is expected to have a positive effect on tourism trends in the coming years, especially in a country like Croatia, with a large annual presence of visitors from countries such as Slovenia, Germany, Austria, Denmark, Poland, Sweden, and the Netherlands during the summer season.

Croatian trains

Unfortunately, unlike the previous two points, when it comes to the future of trains in Croatia there is still no revolutionary project announced. Although it is true that the sad reality of the trains in the country was already known, in recent weeks various news have been published that make it even more evident. From poor connectivity between cities to excessive travel times, to even drivers who were late for sleeping at home. Bus travel and airports continue to support the local and international transport market in Croatia, but expectations for a better train system are rising with time. Tourists and local users alike expect train travel to be modernized, and soon.

The geography of the country is not an excuse since other rugged countries such as Italy or Austria have most of their cities and towns connected to each other by very fast and modern trains. Time will tell whether Croatia decides to modernize its existing lines in the next few years, or whether it decides to add more trains connecting coastal cities as well as from west to east. At the moment there is no clear horizon, but it is an urgent issue.

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Photo: Nikola Cutuk/PIXSELL

Population

The most recent census was conducted last year, and the results raised a lot of eyebrows. Much has been said in the last decade about the never-ending phenomenon of migration of young Croatian professionals in search of better job opportunities in other countries on the continent, or even outside Europe. However, the situation seems to have worsened even more and this has been manifested in the last official count of the country's population. The youth of the country continue to look abroad once they receive their degree, and there are plenty of reasons considering the low wages and the limited job offers. 

Some blame the ease for Croats to migrate to other European countries due to their membership in the EU, but the truth is that it is becoming increasingly difficult to convince a Croat to stay.

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Photo: Borna Filic/PIXSELL

If the cost of living in the country manages to find a balance over time with salaries, labor supply, and working conditions, it is likely that the trend will reverse, but for now one can only speculate. On the other hand, it is important to recognize the increase in Croatian citizenship applications by citizens who belong to the Croatian diaspora, especially those who come from South America. The current situation in several countries of the South American continent, such as Argentina or Peru, has motivated young people and adults to bet on a change of scenery, with a great willingness to take on the challenge of repatriation and offer their skills in Croatia. It has always been talked about how it is that the majority of the Croatian population lives, in fact, outside the country, but this factor must be seriously taken into account in the coming years, which would also invite us to think about a more diverse Croatian population.

Tourism

The COVID-19 pandemic has made many in the country reflect on the enormous dependence of the Croatian tourism industry on international flights. Everyone involved in the tourism sector was deeply affected: hotels, restaurants, tour agencies, tour guides, private accommodation owners, transport companies, and more. Likewise, citizens who dedicate themselves entirely to tourism have felt a severe blow to their own economy, realizing that those two or three months of income should not be so essential for them in order to survive the other nine months of the year. The name of the game for the next few years is diversification. 

The public and private sectors have to come together to look for alternatives, even if a chance of another pandemic is unlikely. Istria, for example, showed the importance of being a destination that can be reached by car. Likewise, it is necessary to bet on tourist offers during the winter, especially in a country that boasts good weather and cultural events throughout the year. This and more will help the country stop depending so much (and dangerously) on the summer months.

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Photo: Grgo Jelavic/PIXSELL

Another issue to consider is overcrowded tourist destinations during high seasons, such as Split or Dubrovnik. While it may not sound like much of a concern to those in the tourism industry, the truth is that at the end of the day, tourism is all about experiences. The experience of not being able to walk down an alley in the old town, not having a place to lie down on a beach, not finding an available table in a restaurant or exaggerated accommodation prices can only be a negative and will affect the promotion of the country in the short term, if they are not already doing so. Limiting the arrival of cruise ships, regulating private accommodation, and promoting other tourist destinations more strongly should be some of the goals that the tourism industry, both in the public and private sectors, should set for improving the quality of the tourist experience in Croatia in the next years.

For more news about Croatia, click here.

Monday, 11 July 2022

Milanović Says Croatia Expects Malta to Support its Entry to Schengen Area

ZAGREB, 11 July 2022 - Croatian President Zoran Milanović held talks with his Maltese counterpart George Vella in Valletta on Monday and informed him that he expects Malta's support for Croatia's entry into the Schengen Area.

During their meeting the two presidents also discussed the adoption of the euro by Croatia and the position of Croats in Bosnia and Herzegovina.

A press release from the Croatian President's Office notes that the visit to Malta is a return State visit at the invitation of President Vella.

Milanović said that Croatia's entry into Schengen is of direct interest to Croatia. "We are an open economy, as all European economies should be, according to the fundamental documents of the EU and the European commitment to the idea of free markets," he underscored.

He added that it is in Croatia's interest to facilitate the flow of people coming to Croatia and participating in Croatia's tourist industry and that he expects Malta's support in this regard.

"I will not claim that it is a done deal, that Croatia will immediately enter the Schengen Area, but I hope for the best," said Milanović, who will also discuss the topic with the President of the House of Representatives Anġlu Farrugia, Prime Minister Robert Abel and the head of the opposition Bernardo Grech.

The presidents discussed the introduction of the euro in Croatia. Milanović said that it is being treated as a fait accompli and something that seems unstoppable to him.

"Croatia has made a decision. We will have to live with that decision. It is not a worrying decision. It has been tested by many countries, so I am hoping for the best. Of course, we are renouncing one of the basic tools of state sovereignty, monetary sovereignty. Our currency was created in the stormy and turbulent years of our recent history," said Milanović.

He again criticised the granting of EU membership candidate status to Ukraine and Moldova while Bosnia and Herzegovina was circumvented in that process at the recent EU summit meeting.

"Unfortunately, this is an issue where the attitude towards this topic goes from disappointment to anger, and things only go from bad to worse. The last move was to grant Ukraine and Moldova EU candidate status while ignoring Bosnia and Herzegovina at the same time. That has nothing to do with prudent statesmanship, foresight and responsibility in international politics. That is something that really disappointed me," Milanović said.

He underscored that that is difficult to justify politically, tactically and ultimately ethically why the European Council - as the body that has a final say - did not grant candidate status to Bosnia and Herzegovina.

"That omission goes hand in hand with a number of other omissions that we witnessed in the Western Balkans, such as the dynamics of the negotiation process of Montenegro and the absence of the beginning of the accession negotiations of Albania and North Macedonia. And finally, Serbia, which, unfortunately, chose its path and is clearly not that interested in the European processes and rules that it has to follow. Maybe they will change their decision within a reasonable period of time, maybe not," Milanović said, as carried by the press release.

According to the press release, Vella said that he understood the Croatian president's sensitivity on the issue of the rights of Croats in Bosnia and Herzegovina and emphasised that the decades-long efforts of some candidates from the Western Balkans have not been rewarded.

A much greater commitment of the European Union to the countries of the Western Balkans is needed. In addition to leading to discontent in these countries, there is also a danger that these countries will begin to turn to the influence of third countries. A more serious and clearer European perspective would contribute, among other things, to the stability of Southeast Europe, said Vella.

In the context of Croatia's accession to the EU, Milanović said that the negotiations for membership in the Union were conducted with the knowledge that there are about 600,000 Croatian citizens in Bosnia and Herzegovina.

"Therefore, it cannot be said that these people became Croatian citizens after Croatia's entry into the EU. They were that before 2013. A large number of Croats living in Croatia originate from Bosnia and Herzegovina. Croatia is obliged to help these people, to try to contribute to solving their problems, but in a peaceful way," said Milanović.

For more, check out our politics section.

Wednesday, 6 July 2022

Milanović Discusses Euro Area, Schengen and BiH with Slovenian Foreign Minister

ZAGREB, 6 July 2022 - Croatian President Zoran Milanović on Wednesday received Slovenian Foreign Affairs Minister Tanja Fajon, with whom he talked about Ljubljana's support on Croatia's path towards membership of the Schengen Area and the euro area, as well as the situation in Bosnia and Herzegovina.

Milanović and Fajon talked about the possibilities of further improvement of cooperation between the two countries, as well as about Croatia's entry into the euro area and the Schengen Area, for which President Milanović expects Slovenia's support, his office said in a press release.

A topic of the meeting was also the situation in Southeast Europe, notably in Bosnia and Herzegovina. With regard to the upcoming elections in that country, President Milanović reiterated his position that it was important and necessary to ensure the legitimate representation of all three constituent peoples in that country.

Milanović expressed satisfaction with Slovenia's support in the effort to secure Bosnia and Herzegovina the status of a European Union candidate, which he himself advocates, and the two politicians also discussed the security crisis caused by the Russian aggression against Ukraine.

For more, check out our politics section.

  

Thursday, 30 June 2022

PM Says Government Systematically Making Strategic Headway For Prosperity Of Citizens

ZAGREB, 30 June 2022 - Prime Minister Andrej Plenković said on Thursday that the government was "very systematically making strategic headway" to improve the lives of citizens and the economy, referring to Croatia's admission to the euro area and the Schengen Area, as well as to the upgrade of the country's credit ratings.

At its last summit, the European Council confirmed Croatia's entry into the euro area on 1 January 2023, and the government expects that Croatia will also join the Schengen area then too.

"We are very systematically making these strategic steps forward for the prosperity of our citizens and economy. They (that headway) are here, they will last, they will remain, and they will be a kind of legacy of the two terms of our government," Plenković said at a cabinet meeting.

"These are really great strategic achievements. They do not just come with some routine schedule. They come on the basis of the implementation of reforms, the fulfillment of benchmarks, the adoption of laws, and our political and diplomatic engagement," he added.

The Moody's agency has recently announced that it could raise Croatia's credit rating to the investment category following the EU's recommendation for Zagreb's entry into the euro area.

Croatia's current rating of 'Ba1' signals investors that the agency considers the purchase of Croatian government bonds a speculative investment.

Last Friday Moody's announced that it will raise Croatia's rating by two levels, to 'Baa2', investment category.

Plenković said that Croatia will have the best credit rating so far in the investment level, according to the assessments of all the three largest global credit rating agencies.

"We are sending a message of confidence to financial markets, investors, partners (...) There will be many more such positive messages. Only now will we appear on the radar of some serious stakeholders on the market since we have been given a sort of tick from all three agencies," he underscored.

Council's conclusions on BiH call for limited constitutional and electoral law reforms

Commenting on the conclusions of the last European Council on the possible candidate status for Bosnia and Herzegovina, Plenković said that the Croatian initiative included the wording that the European Council is ready to give BiH candidate status if it meets reforms in 14 areas, including limited constitutional and electoral law reforms. They "should address the issue of the inequality of Croats as the least numerous constituent people in the country among other things, said the PM underscoring that Zagreb has been systematically advocating the BiH Croats' rights for years.

Plenković also commented on a decision at the NATO summit in Madrid to give the green light for Swedish and Finnish membership in NATO.

He said he was "glad" that President Zoran Milanović agreed with the government's position, who had previously said that it was necessary to block the Swedish and Finnish request for NATO membership until the election law in BiH was changed.

A proposal on initiating the procedure for concluding a protocol to the North Atlantic Treaty on the accession of Finland and Sweden to NATO was adopted during Thursday's cabinet meeting.

 

For more, check out our politics section.

Wednesday, 29 June 2022

EU Formally Begins Process of Croatia's Admission to Schengen Area

ZAGREB, 29 June 2022 - The Council of the European Union has initiated the procedure for decision making on the admission of Croatia to the Schengen passport-free travel area, requesting an opinion from the European Parliament which is required for a final decision, Hina learned from diplomatic sources on Wednesday.

The opinion of the European Parliament is not binding on the Council, but constitutes a procedural step that cannot be avoided.

The decision to initiate the procedure was made on Wednesday at a meeting of the Committee of Representatives, which consists of the ambassadors of the EU member states.

The draft Council Decision "on the full application of the provisions of the Schengen acquis in the Republic of Croatia" was sent to the European Parliament together with a letter to Parliament President Roberta Metsola.

"It is my pleasure to inform you that the Council has decided on 29 June 2022 to consult the European Parliament on a draft Council Decision on the full application of the Schengen acquis in the Republic of Croatia. The Council would be grateful if the European Parliament could kindly submit its opinion as soon as possible," says the letter, seen by Hina.

After the European Parliament receives the letter, the Committee on Civil Liberties, Justice and Home Affairs will appoint a rapporteur to prepare a draft opinion, which will first be discussed by the Committee. After it is adopted by the Committee, it will be sent for further adoption at a plenary session of Parliament.

It is expected that the European Parliament will vote on a final opinion at one of the two plenary sessions scheduled for October. That will pave the way for a final decision that requires the consensus of 22 EU members of the Schengen area.

The Schengen area currently consists of 26 European countries, four of which are not EU members and have no voting rights - Iceland, Lichtenstein, Norway and Switzerland. The Council decision might also be adopted in October.

Should there be no unforeseen obstacles, in the tenth year of its EU membership Croatia would simultaneously join the Schengen area and the euro area, the two closest integration associations at the core of the European Union.

For more, check out our politics section.

Monday, 30 May 2022

Fajon: Slovenia Supports Croatia's Entry to Schengen Area

ZAGREB, 30 May 2022 - Slovenia supports Croatia's entry to the Schengen Area, Slovenia's future foreign minister Tanja Fajon said on Monday but warned that a consensus o the matter would be hard to achieve in the European Union before the Schengen policy was reformed.

Slovenia supports the expansion of the Schengen Area to Croatia, Romania, and Bulgaria but it will be difficult to achieve political agreement on that, Fajon said answering questions from the parliament's foreign affairs committee.

She added that the reason for this was "mistrust" between members of the Schengen Area that emerged after the migration crisis of 2015 and 2016, which was why five Schengen Area member states, including Austria, were still conducting tighter controls on the border with neighboring countries that were not in the Schengen Area.

"Until such time that we reform the Schengen treaty, I think enlargement to the three new countries is jeopardized. I think that we first need to create powerful trust between the member states," Fajon said.

In her introductory address, in which she presented the principles based on which she will conduct Slovenia's foreign policy, Fajon said that she will advocate consistent respect for the border arbitration agreement with Croatia, as stated in the coalition agreement between the three parties that will form the new Slovenian government, headed by Robert Golob.

However, she added that she sincerely advocates the strategy of the best possible relations with Croatia, noting that Croatia's entry into the Schengen Area and the OECD is in the mutual interest of Slovenia and Croatia.

"We have a lot more common interests than differences with Croatia, and all issues can be resolved if there is political will," said Fajon.

Fajon said that Slovenia will advocate for EU enlargement to Western Balkan countries and for dialogue between Belgrade and Priština and that it will participate more actively in that process both at the European level and at the forums of regional initiatives.

She criticized the outgoing government led by Janez Janša in reference to foreign policy over the past two years, notably its "deficient" respect for independent institutions and the media, as well as its closeness to "the authoritarian regimes" in Hungary and Poland.

Fajon added that Slovenia would once again turn to the "core" EU countries with strong institutions and respect for the rule of law. In that context, she singled out Germany, but she also mentioned France and Italy.

 For more, check out our politics section.

Friday, 13 May 2022

Slovenia Will Block Croatia's Schengen Entry, Daily Says

ZAGREB, 13 May 2022 - Slovenia's new Foreign Minister Tanja Fajon is advocating that Croatia enters the Schengen Area as soon as possible, but on the condition that the border arbitration award is implemented, Večernji List daily said on Friday.

The paper quotes Croatian Foreign Minister Gordan Grlić Radman as saying that Croatia's Schengen entry has nothing to do with the border arbitration.

According to the Slovenian STA news agency, Fajon said Schengen should be renewed as soon as possible by setting clear and transparent rules for accession.

Fajon said she was advocating that Croatia join as soon as possible and that those rules included implementation of the arbitration award which defines the Croatian-Slovenian border.

The Croatian parliament adopted a decision to irrevocably walk out of the arbitration process because it was compromised and contaminated by Slovenia's arbitrator and agent, who used illegal means to influence the process.

Slovenia, however, insisted on the arbitration, which continued and an award was delivered which Croatia does not recognise. This was why all Slovenian governments before the last one led by Janez Janša made normalisation of relations between the two countries conditional on Croatia's recognition and application of the arbitration award, which has been unacceptable to all Croatian governments.

After a two-year arbitration break during the Janša cabinet, the problem has now returned with the new government led by Robert Golob, as indicated by Fajon's statement as well as Golob, who said recently that the award remains "an anchor in Slovenia's policy on Croatia," Večernji List said, adding that this could lead to new tensions between the two countries.

For more, check out our politics section.

Wednesday, 6 April 2022

Croatian Schengen Entry Preparations to See Border Crossing Changes

April the 6th, 2022 - Big changes are set to come to Croatian border crossing procedures which should theoretically make some things more simple as Croatian Schengen entry looms.

As Poslovni Dnevnik writes, Croatian Schengen entry will bring with it some major changes when it comes to crossing the country's border, as those Croatia has towards neighbouring Bosnia and Herzegovina, Serbia and Montenegro will become the European Union's new external borders, while there will be no control at the borders between Croatia and neighbouring Slovenia and Hungary, both of which are EU member states.

The new regime which is being prepared for as Croatian Schengen entry is on the horizon will also mean changes for the Croatian National Bank, more precisely for the ''examination'' of passengers and estimates of consumption needed to calculate the balance of payments. As a rule, consumption estimates are conducted by surveying tourists and passengers when crossing borders, but after entering the Schengen area, interviewers will have to "catch" passengers at alternative locations before border crossings with Slovenia and Hungary such as at fuel stations, restaurants and resorts.

The Croatian National Bank also stated the new rules in the current public tender for external agencies that will perform the work of surveying and making estimates of the consumption of foreign tourists in Croatia, as well as Croats abroad:

As a rule, such tests are performed at the end of a person's trip abroad, and according to the tender, data will be taken from drivers and passengers in cars and buses, and truck drivers, as well as passengers at airports and seaports. The survey sites will be selected by the agencies, and the surveys will be conducted on a monthly basis for two years.

The target annual sample size that meets the reliability requirement of the survey results was set at 15,050 surveys for resident passengers and 49,700 for non-residents at road and air border crossings. At one exit, 35 surveys are required at the border crossing. The value of this work is estimated at a massive 3.9 million kuna, and the Croatian National Bank's tender for the job is open until April the 29th, 2022.

For more, check out our politics and travel sections.

Wednesday, 26 January 2022

Austrian Minister Says Croatia's Admission to Schengen Area Important for EU

ZAGREB, 26 Jan 2022 - Austrian Minister for the EU Karoline Edtstadler said in Vienna on Wednesday that Croatia's joining the Schengen Area was an important security issue for the EU which Vienna supported, the Croatian parliament stated in a press release.

Minister Edtstadler met with Parliament Deputy Speaker Željko Reiner, who is visiting Austria.

At the meeting, Reiner thanked Austria for its support in the aftermath of the earthquakes that struck Croatia in 2020.

He also thanked Austria for its continued support for Croatia's foreign policy priorities -- joining the Schengen Area, the euro area and the OECD.

The parliament's press release also said that Reiner explained to the Austrian minister the problem of the current election law in Bosnia and Herzegovina and the status of Croats in that country.

For more, check out our dedicated politics section.

Tuesday, 14 December 2021

Plenković: 2022 Essential Because of Accession to Schengen and Euro Area

ZAGREB, 14 Dec 2021 - Next year is very important because we expect a final decision on Croatia's accession to the Schengen and euro areas, Prime Minister Andrej Plenković said on Tuesday, recalling that Croatia has access to about €25 billion from European sources for this decade.

Addressing a launch conference for the Croatian-language special annual edition of the global magazine The Economist, Plenković said that Croatia has about €25 billion at its disposal for this decade, including regular funds from the seven-year European budget, funds from the NextGenerationEU, and about one billion euro for reconstruction following last year's devastating earthquakes.

"That is more than we have ever had....and these are mostly grants," he underscored.

This year's conference dealt with the transformation of the Croatian economy through the National Recovery and Resilience Plan (NPOO) 2021-2026 as the basis for the absorption of funds from the NextGenerationEU mechanism, under which Croatia has access to €6.3 billion in grants and another €3.6 billion in favorable loans.

The NPOO has been approved by the European Commission and Council, Croatia has already received an advance payment of HRK 6.14 billion, and in the first half of 2022 it will receive a new tranche, Plenković said, adding that there are some EU countries that have not yet even delivered their national plans.

The NPOO is the reform basis and financing basis for economic growth and is forecast to increase Croatia's GDP in 2022 and 2023 by 1.4 percentage points.

Economy proved to be exceptionally tough

Plenković said that the national economy showed exceptional strength, agility, and resilience, particularly since the tourism season was beyond all expectations. He also mentioned growth in personal consumption and economic growth which is expected to exceed nine percent, which is more than the eight percent drop in GDP last year.

The most important thing is that Croatia has maintained its image among international organizations, financial institutions, markets, and credit rating agencies, he noted.

"Anyone who is following us sees our credibility and the direction of our actions," said Plenković and highlighted that the direction is based on a speedy return on the path to decreasing public debt and a balanced budget, which cannot be expected this year or next.

He recalled that the Fitch agency has upgraded Croatia's credit rating to its highest level since rating agencies have appraised Croatia.

"This is the framework with which Croatia is entering 2022, which should be very significant institutionally because we expect a final decision on accession to the Schengen and euro areas," said Plenković.

He emphasized the importance of political stability, noting that the period from 2021 to 2028 will have just one intensive period of about 12 months of electioneering.

Government faced unbelievable challenges last year

Speaking of last year, Plenković said that all governments faced an unbelievable challenge as a consequence of coronavirus and had to find solutions to enable normal functioning and economic trends.

That led to a decline in all trends and weaker economic activities, but the government managed to overcome that and it does not regret the expenditure due to the coronavirus crisis which has exceeded HRK 40 billion.

"We have no regrets because we did not see any mass layoffs or bankruptcies," the PM underscored, recalling government support for wages in the private sector among other measures.

Challenges of climate change and demographic revitalization

Globally, the pandemic is still continuing and no one can know when it will end and what new variants we will meet, or what measures we will have to take. However, we will do everything we can to protect the health of citizens while ensuring economic, financial, and social flows, he said.

Everyone has had to learn how to balance - governments, companies, educational institutions, and international institutions, he said.

In the global context, Plenković reflected on relations between the USA and China, the need to strengthen the EU's strategic autonomy in all possible aspects, relations with Russia in the context of Europe's stability, and the issues of migration, climate change, and demographic revitalization.

Polarisation in society during the coronavirus crisis

Plenković said that the coronavirus crisis has led to an exceptional polarisation in the social and political environment, both in Croatia and in the world.

He highlighted the impact of the Internet, social networks, and false information that deceives people, which is why they do not trust institutions, public health, and science.

The latest edition of The Economist was presented by Ivan Vrdoljak from the Livit company. The edition is published in Croatian and provides analyses and forecasts for next year.

Vrdoljak said that The Economist was wrong in its projection of Croatian growth for this year due to unexpectedly fast recovery.

The Economist has forecast growth of 4.7% whereas the government expects growth of about 9%. The Economist projected next year's Croatian GDP growth at 4.1% and inflation at 1.7%, added  Vrdoljak.

For more, check out our dedicated politics section.

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