Thursday, 4 June 2020

Minister Maric Claims Economic Recovery Won't be Like 2008

Croatian Finance Minister Maric has sought to assure the public in saying that Croatia's recovery from the current economic crisis we're embroiled in, induced by the coronavirus pandemic, won't be as difficult to come out of the other side of as the one which occurred back in 2008 was.

Everyone likely remembers the financial crash of 2008 and the tremendous economic consequences that followed. Many countries, particularly those with less economic strength in general struggled to make a comeback and get back on their feet after that event, and the Republic of Croatia is among those who were dealt a particularly harsh blow from which recovery took a long time.

As Poslovni Dnevnik writes on the 3rd of June, 2020 inance Minister Zdravko Maric recently stated that pensions would be paid by the time Corpus Christi rolls around, As for fiscalised receipts for the month of April, known as Croatia's lockdown month, they are in the red by 40 percent, and in May there was significant recovery as the anti-epidemic measures were loosened, seeing them stand at somewhere around 18 percent in the red.

"When lockdown started, we said that the month of May might be more challenging. From the 1st to the 31st of May, the tax revenue index stood at 48.7 which is a drop of over 50 percent when compared to middle of last year's tax levies.

It should be noted that the weekend in May was the end of the month. The numbers are better though, though I won’t try to embellish anything here either. Last year, the 31st fell on a Friday and this year the 31st fell on a Sunday, so we had two less working/business days to work with. When we include and add to the above figures what we were working with on Monday, then the tax revenue index is at the level of 60, so the decline stands at about 40 percent. Our recovery from this crisis will not be as difficult as the recovery we experienced back in 2008," Minister Maric stated.

For more, follow our politics and business pages.

Sunday, 12 April 2020

Finance Minister Maric Explains Government Minimum Wage Measure

As Novac writes on the 11th of April, 2020, Croatian Finance Minister Zdravko Maric commented on the government's ''minimum wage'' measures for RTL on Friday, stating that the amount being offered by the government was not the workers' full pay but merely support for wages. Minister Maric went on to make the measure more clear.

"This [measure] is payroll support. We [the government] cover that part, the rest is up to the employer to make up for if the worker otherwise has a higher salary. The salary should be as is stated in their employment contract. But if someone has run into problems, then he or she needs to solve them with the employee. That's why we have other measures, such as credit measures of liquidity,'' explained Minister Maric.

When asked about workers who are otherwise paid less than 4,000 kuna and the state pays the affected companies an amount of 4,000 kuna per worker, Minister Maric said that it would be fair for the employer to pay the worker the difference up to 4,000 kuna.

Finance Minister Maric didn't express any particular desire to talk about possible salary cuts for public sector employees amid the ongoing coronavirus pandemic, stating only that those matters needed to be discussed.

"This is a topic that we have on the table. There was a meeting yesterday. I hope that the talks will continue. We'll also invite the unions with which we've signed collective bargaining agreements. In this part, solidarity and community are important in defeating the crisis," he said.

He added that at present, the state has paid over one billion and one hundred million kuna out to employers to make up the wage differences of their employees as part of these "minimum wage" anti-epidemic economic measures. That is for more than 370,000 employees, and the total measure, he assumes, will be used by 600,000.

Make sure to follow our dedicated section for rolling information and updates on coronavirus in Croatia. For more on politics in Croatia, follow this page.

Saturday, 14 March 2020

Minister Maric Sends Out Message to Croatia's Coronavirus Panic Buyers

Croatian Finance Minister Maric has issued a message to Croatian panic buyers, and a similar message comes from Podravka which urges people to calm down.

Coronavirus (COVID-19) has sent people into somewhat of a meltdown, despite the numerous explanations and warnings from highly cited scientists such as Igor Rudan (which you can read here and here), that there is absolutely no need to panic. While these warnings go ignored by a significant number of people, shelves in certain shops are quickly running out of produce to fill them

Hand sanitiser and toilet paper seem to be high on the list of Croatia's numerous panic buyers concerned about the possibility of self-isolation and running out of said items.

''If any shelf ends up empty, we've got enough [products] to fill it back up again,'' stated Finance Minister Zdravko Maric in a message sent out to residents of the Republic of Croatia during a recent news conference, as Poslovni Dnevnik writes on the 13th of March, 2020.

"As far as the supply chain is concerned, there's enough of everything. Manufacturers and distributors have months to go… If any shelf is empty, there's enough to be able to fill it back up again,'' Minister Maric reassured.

"I have first hand information, we're talking about increased consumption. I repeat again: there are sufficient quantities of everything, and there will be for months to come. There's no need for excessive ''attacks'' on retail chains and the creation of additional and excessive inventory,'' Minister Maric added in an apparent warning to panic buyers who are leaving nothing for others.

"All production is working normally for us. We have several months of supplies, we've been preparing for the season so we will ensure the continuity of production, Croatia will not be left without food and medicine,'' said a statement from the large Croatian company Podravka, which also urged people to please not stockpile.

Make sure to follow our dedicated page for more on coronavirus in Croatia.

Wednesday, 30 October 2019

Finance Minister Zdravko Maric Discusses Wage Increase Possibilities

"If we've waited for years, we can carry on waiting for another few months," Finance Minister Zdravko Maric said as a guest of Dnevnik Nova TV last night, answering the question of how long it may take to analyse and implement the adjustment of pay ratios, reports.

As Poslovni Dnevnik writes on the 30th of October, 2019, Zdravko Maric has to secure 150 million kuna for compensatory measures until the issue of coefficients is resolved, and when asked if he has the money, he says that this is not planned.

"So, as far as salaries are concerned, you'll see in the budget proposal for next year, of the total budget increase, there are two key items. On the one hand, there is one billion and 700 million kuna more for pensions and retirement benefits. And secondly, the same amount is foreseen for salaries," explained Maric.

"With regard to wage policy, we need to be very clear here. The wage increase is ahead of the proposal to increase the base. But as I said today, and I will say again now - we've opened up a very important topic that is gaining more attention in the media and among the general public," he added, referring to the topic of wages, which has been a burning one of late.

When asked how long it should take to analyse and implement what needs to be done, Maric simply stated that we have already been waiting for years and that essentially, a few more months or so shouldn't hurt.

He added that it's high time we start questioning what we're getting from our public services and noted that certain negative trends had been reversed, and that public debt is declining, that expenditures are being kept under control, that interest rates have fallen and that Croatia's rating has thus improved.

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Tuesday, 30 July 2019

Long-awaited Cro Card Finally Coming to Life Next Year?

The fourth round of the tax reform by Finance Minister Zdravko Marić has officially revealed that the long-awaited Cro card will finally come to fruition, starting January 1, when other tax news should come into effect. 

Tourism Minister Gari Cappelli also confirmed the news, announcing that from January next year, employers will be able to "pay" a maximum of 2,500 kuna to workers by a special voucher, intended for consumption exclusively within Croatia and in periods outside the peak season, reports Splitski Dnevnik on July 30, 2019.

"That's right, the 'Cro Card', which will go through a public consultation with the complete tax reform, should begin in January, and we are particularly pleased with its purpose to encourage spending in the offseason, between October and April, and to stimulate consumption on the continent, although no offer on the coast will be excluded from it,” Minister Cappelli announced.

And it will work as follows: Employers will be able to pay a maximum of 7,500 kuna tax-free per worker annually, for Christmas, annual leave, bonuses and other benefits, and the tax reform will now allow up to 2,500 kuna of that amount to be paid to workers through the 'Cro card' voucher. 

In order to avoid confusion, Cappelli explained that the Cro card would not actually be in the form of a plastic card, but would probably be resolved in the form of a paper voucher, a document that each employee would be able to print out through their personal account and then use in businesses across the country.

More specifically, the voucher can’t be used in all businesses, but only those who will be included in this special program. Thus, there will very likely be unique labels on the doors of businesses so that citizens can know who is participating in this payment method.

To read more about travel in Croatia, follow TCN’s dedicated page

Tuesday, 9 July 2019

Marić and Vujčić Satisfied With Reaction to Eurozone Letter of Intent

As Index writes on the 9th of July, 2019, Finance Zdravko Marić and Governor of the Croatian National Bank (CNB/HNB) Boris Vujčić expressed their joint satisfaction on Monday in regard to the reactions they've received after sending a letter of intent on entering the European Exchange Rate Mechanism (ERM II) on behalf of the Republic of Croatia. This move marked the first official step to Croatia's Eurozone entry.

They were also satisfied with the manner in which it was received by the powers that be.

MEPs from nineteen Eurozone countries and Denmark, the president of the European Central Bank and a representative of the Governor of the Central Bank of Denmark, discussed the Croatian letter of intent during a meeting in Brussels, Belgium, on Monday.

Following the meeting, the finance ministers of the Eurozone and Denmark released a statement in which they stated that "they welcome the intention of the Croatian authorities to establish the elements necessary for its successful entry into the ERM II".

Four days ago, Croatia sent a letter of intent on entry into the European Exchange Rate Mechanism (ERM II) to members of the Eurozone, Denmark and the European Union's institutions, which marked the very first formal step towards participating in the ERM II, preceded by the introduction of the euro as Croatia's official currency, replacing the kuna.

In addition to the letter of intent, the EU member states and institutions also received an encouraging ''action plan'' from Croatia, detailing the reforms Croatia promises to finally implement before entering the ERM II.

Minister Marić told reporters after the meeting said that there is still a lot of work ahead of Croatia in order to successfully complete the process of entering the Eurozone.

"We will try to finalise everything in the next twelve months," Marić assured.

In the statement from the Eurozone, it has been stated that the European Central Bank could complete its comprehensive assessment of the fulfillment of the requirements Croatia has promised to meet in its letter of intent in about a year.

In the case of a positive assessment, Croatia would enter the ERM II, in which it would stay for two years. This means that Croatia could introduce the euro as its currency in three years at the very earliest.

At the same time, upon its entry into the ERM II, Croatia would enter the Banking Union.

Make aure to follow our dedicated politics page for much more.

Saturday, 1 June 2019

Zdravko Marić Discusses Shipbuilding, Taxes and Croatia's Eurozone Entry

In conversation with Dnevnik Nova TV, Croatian Finance Minister Zdravko Marić revealed just how much taxpayers in Croatia had to pay out in guarantees for the country's ailing shipbuilding industry and the negative effects of the introduction of the euro as the country's official currency, a move which could happen in five years.

Will citizens and entrepreneurs feel economic growth? For example, will the non-taxable portion of salaries (take home pay) increase?

Entrepreneurs and citizens contribute the most to this economic growth. They create it on the one hand, and when it happens, as a result, we need to strive in the sense of measures, in order to raise the growth rates further.

To increase non-taxable parts of salaries?

It's still early to talk about the details. Salary growth has achieved positive effects. We should continue in that same direction. In terms of how much space there is [to move] on income tax, there's even more [space] in terms of the part of the non-taxable part itself. Remember the measure from December last year. More than 1.2 billion kuna was also paid by employers to their employees.

Is there any room to reduce excise duty on fuel?

You should also look at a comprehensive picture in the segment of indirect taxes. As a rule, there's always something that we have to take into special consideration because of the share of indirect taxes, Croatia is at the very top of the EU. But we should also take that into consideration in a broader context.

When you reduce fuel excise, you know for yourself that the price of everything drops.

Not as a rule always. To the last change in VAT, when we lowered taxes in our history, there's been no price reduction. But in the last couple of months, we've seen lower prices of fruit or meat, while fish and vegetables have even increased.

And in the hospitality industry by 13 percent?

This is the topic we'll also discuss.

Is the end of the issuing of shipbuilding guarantees?

This is unfortunately like in one of those ads when there's something extra at the end. I have to tell Croatian citizens that as of today, 4,420,000,000 kuna has been paid, and in the last couple of days the guarantees for the Jaružela ship, a great ship, have been protested, as well as two additional ones. Only 120.000.000 kuna is left. They're enormous sums of money. You can't be satisfied with the fact that we've paid for the construction of ships that haven't ever even been built as a finance minister or as a taxpayer.

What are the negative effects of the introduction of the euro?

Due to their very good knowledge and their history of experience with hyperinflation, devaluations before the introduction of the kuna, Croatian citizens say that in the first place, they're afraid of price increases. This needs to be taken seriously. It's a topic that doesn't happen overnight. There are several steps to take along that path. All measures must be taken to minimise any dangers and risks. And that all of the positive benefits manifest and come into effect as much as possible.

Make sure to follow our politics page for much more on the political scene in Croatia. 

Click here for the original article from Poslovni Dnevnik

Thursday, 30 May 2019

Zdravko Marić and Boris Vujčić Take First Step to Introduction of Euro

When Croatia jointed the European Union back in July 2013, it agreed that it would eventually have to introduce the euro as its main currency as part of its accession to becoming a full member of the bloc. While many are concerned with the eventual introduction of the euro as Croatia's main currency, with a number desiring a referendum on the matter, it seems that Plenković is quite right when he says it's already a done deal.

The first official step in the process of sending the Croatian kuna to the history books has now been taken by the powers that be.

As Poslovni Dnevnik writes on the 30th of May, 2019, Finance Minister Zdravko Marić and Croatian National Bank (HNB/CNB) governor Boris Vujčić have requested that Croatia enter the Single European Banking Supervisory Mechanism, the first pillar of the European Banking Union, the primary duty of which is bank supervision, according to a report from Večernji list.

This is the first step of replacing the Croatian kuna with the euro, which could happen in five years.

The single supervisory mechanism is mandatory for all Eurozone member states. It is one of the last steps that Croatia has now taken before it officially requests the introduction of the euro as its main currency, abandoning the kuna, and entering into the European exchange rate mechanism, Večernji list writes.

Rather morbidly, this event coincides with the celebration of 25 years of the Croatian kuna, one of the few European currencies whose introduction is celebrated as a major historical and national event, yet in which citizens have little real confidence and in a country over which the euro still dominates.

While opposition among some members of the public remains strong, when it comes to savings and other financial practicalities of life, the euro has no competition in Croatia, just as German marks never did either.

If all goes well in not only Croatia but in the wider European Union ''family'', Croatia could introduce the euro during the year of the thirtieth anniversary of the introduction of the kuna - 2024.

If that doesn't occur, anything else could. It's possible that some of the sovereign and populist Croatian parties could seek and even succeed in launching a referendum, binding or otherwise, and convince citizens to reject the euro, which will force the government to stop the Eurozone accession process, but, that seems distant for now.

Make sure to stay up to date by following our dedicated politics page for much more.

Thursday, 2 May 2019

Chinese Interested in Croatian Shipyards, With One Condition...

The Chinese interest in Croatian projects is continually growing, or so it seems, and there is now room to dare when it comes to the potential Chinese rescue of Uljanik and 3 Maj at the eleventh hour.

As Marija Brnic/Poslovni Dnevnik writes on the 2nd of May, 2019, the Chinese CSIC representatives currently visiting Croatia to see the state of Croatia's ailing Uljanik (Pula) and 3 Maj (Rijeka) shipyards have expressed clear interested in new projects with Croatia's shipyards, but only if the Croatian state covers the cost of what has already failed, there have also been mentions of the diversification of production, but they don't want guarantees.

If there is an agreement between the Croatian Government and the Chinese CSIC about reviving Uljanik and 3 Maj, it will be done so with regard to a combination of the models which were discussed with the previous two strategic partners, Darko Končar and Tomislav Debeljak.

According to the explanation given by Minister of Economy Darko Horvat after the final talks and the three-day visit of CSIC's representatives, the Chinese are indeed interested in starting with new projects, while the state should cover the cost of old, failed projects, meaning it will need to take place on a clean slate. It's also more than likely that the sites of today's Croatian shipyards will see other projects developed there, that is to say, the diversification of activities will occur.

"If they don't see the possibility of continuity of shipbuilding at this time, we want other industries to take place here, and not just those exclusively involved in shipbuilding," Minister Horvat stated. Therefore, unlike Danko Končar's initial idea, Chinese diversification would not be a real-estate business, but would involve some sort of other, new production aside from shipbuilding. And the clean starting position the Chinese have indicated that they want, which is similar to what Tomislav Debeljak sought but is unlike his idea, almost certainly means declaring the bankruptcy of the two shipyards.

"We don't expect them to finance failed attempts to build ships that haven't been completed. The starting position means new projects,'' stated Horvat in reference to the wishes of the Chinese.

The continuation of construction in Pula and Rijeka in partnership with CSIC would in any case have a completely different financing philosophy. The Chinese say, after the talks, that they are completely astonished at the reliance of state guarantees for shipbuilding. To repeat what Finance Minister Zdravko Marić stated recently, it's much too early to talk about exactly what changes might occur in this context following their entry into Uljanik and 3 Maj. Over the next few weeks, CSIC's senior people will analyse the collected information and determine whether or not, and indeed in what form they're interested in entering into the structures of Croatia's enfeebled shipyards.

At this moment in time, Darko Horvat has merely announced that any form of Chinese entry would involve a new way of financing, with different sources, a different way of drafting project documentation, and would involve no state guarantees. After the final talks at Zagreb Airport, Horvat didn't provide any more specific information, nor the deadlines within which he expected to receive feedback from the Chinese, but he did appear to try to leave the impression that he was optimistic about the whole situation. The Chinese representatives themselves, however, didn't give any media statements.

Make sure to follow our dedicated business page for more information on Chinese-Croatian business relations, Chinese projects and investments in Croatia, doing business, working and investing in Croatia and much more.


Click here for the original article by Marija Brnic for Poslovni Dnevnik

Wednesday, 1 May 2019

Marić on Potential Chinese Investment: Too Early to Talk About Anything

As Poslovni Dnevnik writes on the 30th of April, 2019, Croatian Finance Minister Zdravko Marić said on Tuesday that he still needs to see if there really is specific interest from the Chinese shipbuilding company, whose representatives are visiting the ailing shipyards in Pula (Uljanik) and Rijeka (3 Maj), saying that it's too early to be able to say anything and that we "need to be completely realistic".

When aked by a journalist about the expectations of the Croatian Government, given that a delegation from the Chinese shipbuilding company China Shipbuilding Industry Corporation (CSIC) has visited the Uljanik and 3 Maj shipyards, Marić said that first of all, we should be realistic and after CISC's representatives get a proper look at the state of affairs with those shipyards and answers to the questions they are interested in, we will need to wait and see what their response to all of it will be.

At this point, it's still too early for that, he added, recalling yesterday's introductory meeting between the Croatian prime minister, his ministers and the aforementioned Chinese delegation at Banski Dvori in Zagreb, where everything was transparent and very clearly presented.

"A really high level team from the perspective of that company has arrived, but on the other hand, we need to be completely realistic. So, today they will spend all day in both Rijeka and Pula and then after that, of course, we can't expect it immediately but within a reasonable time frame, they'll determine what they saw, state what they think about it, and whether or not there is a certain level of interest,'' said Marić when answering journalists' questions after attending the annual European Investment Bank (EIB) press conference.

The CSIC delegation, headed by Hu Wenming, arrived at the enfeebled Uljanik on Tuesday morning, where talks with the members of Uljanik's management board and its supervisory board took place. Assistant Minister of Economy Zvonimir Novak has also been participating in these talks.

Several representatives of the aforementioned Chinese company arrived at Uljanik as early as Monday afternoon, where they viewed the plants and made an unofficial assessment of the capabilities of the Pula shipyard's production facilities, ie, they got better acquainted with its technical capabilities, the processes that take place there, the technology and its general capacities.

What will coe of the visit is anyone's guess so far, but despite suspicion from some, an injection of Chinese money could truly be Uljanik's very last hope.

Make sure to follow our dedicated business page for more information on Chinese-Croatian business relations, Chinese projects and investments in Croatia, working, doing business and investing in Croatia and much more.

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