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CROATIA





In-depth Business Intelligence 

Key Economic Data 
 
  2003 2002 2001 Ranking(2003)
GDP
Millions of US $ 28,322 22,421 20,300 61
         
GNI per capita
 US $ 5,350 4,640 4,550 70
Ranking is given out of 208 nations - (data from the World Bank)

Books on Croatia

REPUBLICAN REFERENCE

Area (sq.km)
56,542

Population
4,496,869

Capital 
Zagreb

Currency 
Kuna

President 
Stipe Mesic

Private sector
% of GDP 
55%


Update No: 107- (28/04/06)

Croatia on the way into the EU
"Croatia is undoubtedly on the path that leads to full membership of the EU," European Parliament President Josep Borrell said in an address to the Croatian Parliament in Zagreb on April 12th.
Borrell, who was on a two-day official visit to Croatia, said the European Parliament supported Croatia's full membership of the European Union (EU). There could not have been a better Easter present for Zagreb. 
"It is in the interest of the European people that this part of Europe is politically stable, economically developed and integrated with Europe," Borrell said. "Croatia must apply all regulations from its Stabilisation and Association Agreement with the EU," Borrell stated, adding that this meant rooting out all forms of discrimination against EU citizens wishing to buy real estate in Croatia.
The Stabilisation and Association Council in Luxembourg on April 10th said Croatia had continued meeting political criteria, adding, however, that the country was not meeting its obligations from Article 60 of the SAA, which regulates the sale of real estate to EU citizens. Under the regulation, after the expiration of a four-year transition period on 1st February 2009, Croatia should make the right of EU citizens to buy property in Croatia equal to that of its own citizens.
Unfortunately Italian mafia groups have long been eyeing Croatia as a good place to penetrate, just like Slovenia. Brussels needs to be alert to this sensitive aspect of the matter.
Speaking of relations with neighbouring countries and regional cooperation, Borrell went back to emollient generalities in saying that relations with neighbours must be regulated through bilateral dialogue. "You must not think that the European Union will do that for you," he added.
The initiative aimed at strengthening regional cooperation is not an attempt to renew the former Yugoslavia, the EP president said. "You must do all you can to encourage progress in neighbouring countries because stability of the region is in Croatia's interest," he said, as if anyone would doubt it. His whole admirable address recalls what Macmillan said when British Foreign Minister in the mid-1950s; speaking on diplomatic matters in an official capacity involves one in trying to avoid two pitfalls, being so platitudinous as to be boring - or so indiscreet as to be dangerous!
Borrell called on Croatia to continue implementing reforms important for the functioning of the rule of law. He welcomed the CEFTA meeting held in Bucharest in early April, saying that foundations for a new free trade zone were laid at that meeting.
Present in parliament during Borrell's speech were the entire Croatian cabinet, members of the negotiating team and representatives of the diplomatic corps in Croatia. After the address, Borrell and Parliament Speaker Vladimir Seks gave statements to the press.

Sanader in Rome announces resolution on Croatia's accelerated joining EU
There could be no better place for a Croatian leader to espouse the European cause than the very city where the Treaty of Rome was signed nearly fifty years ago. Nobody in those far-off days could have envisaged an independent Croatia joining the mature EU; but it is about to happen. Croatians, moreover, are by and large devout Roman Catholics.
The Croatian Prime Minister and Croatian Democratic Union (HDZ) president, Ivo Sanader, who was attending a congress of the European People's Party (EPP) in Rome, said in mid-April that the HDZ, together with several other people's parties from Europe, had moved and sent into urgent procedure a resolution on accelerating the process of Croatia's joining the EU.
Sanader told Croatian reporters covering his participation in the 17th EPP congress that this was a so-called urgent resolution, an instrument used only in exceptional situations, adding that it was important that the political bureau of the EPP had unanimously backed the proposal.
"The congress is voting on the resolution and if it adopts the document it will mean that all parties belonging to the EPP family, the strongest group in the European Parliament, will not bring Croatia's status in question in the future but the only option will be the country's full membership of the EU," Sanader said. The resolution clearly requests that each country be assessed individually in the negotiations process, he added.
Sanader told reporters that in his speech before the congress he would reiterate Croatia's devotion to EU values and stress that after it competed the negotiations in a couple of years, the country would be ready to join the bloc.
"Then we will expect a positive decision on Croatia's full membership despite the fact that Europe is currently facing a crisis and that the process of further enlargement is being discussed," Sanader said.
He said there was no danger for Croatia to get stuck in a group of the so-called privileged partners, but stressed that one should always remain active on the diplomatic and political front.

Papal visit mooted
In the afternoon, the Croatian PM was received by Pope Benedict XVI, as a guest at an audience for a delegation of the parliamentary deputies of the EPP group. Sanader said that the meeting was pleasant and that he had a chance to talk to the Holy Father for several minutes.
"I officially invited him to visit Croatia which he accepted but could not give a specific date," Sanader said. There is no doubt that this would be a great success in devoutly Roman Catholic Croatia.

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AGRICULTURE

Government and farmers reach agreement 


The Croatian government and farmers recently signed an agreement on incentives for agriculture and the use of state-owned farmland, Hina News Agency reported. 
The government will pay nearly 80 million Euro in production incentives in two instalments by mid-April, Agriculture Minister, Petar Cobankovic, told reporters after the meeting. It was agreed that a separate law would be drafted to grant long-term concessions to farmers for the use of state-owned agricultural land, which would come into force on January 1st 2008. The present Agricultural Land Act would remain in effect until then. The talks also focused on the existence of a black market for agricultural products in the country, and Cobankovic said that if that problem were solved there would be fewer demands for incentives. The head of the National Farmers' Federation, Darko Grivicic, said that about 90 per cent of the farmers' demands had been dealt with at the talks.

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ENERGY

Gas Pipeline to be completed by end 2006 

The Croatian company, Plinacro, and the Austrian-Italian consortium, Habau-Ghizzoni, signed a contract on the construction of the last section of a gas pipeline running from the northern Adriatic port of Pula to Karlovac near Zagreb, Croatia, recently, New Europe reported.
The contract refers to the construction of a terminal in Pula and a 13-kilometre pipeline from the terminal to the block station Bateli, Plinacro reported. Construction works will start on April 3, and since this is the last agreed section which should be built in six months, the Pula-Karlovac gas pipeline will be completed in early October, the company said. Following its completion, connecting, testing, technical check-ups and adjustment to the existing gas supply system and connections to gas fields in the northern Adriatic will be carried out. Works on the 190-kilometre, 90 million Euro gas pipeline started in mid-January and will be carried out in four stages. The Habau-Ghizzoni consortium is building three sections and the Croatian consortium one section of the pipeline. The pipeline will ensure direct supply of natural gas from gas fields in the northern Croatian Adriatic to Istria, Primorje-Gorski Kotar and Karlovac counties. It will also supply gas to Lika and Dalmatia counties at a later stage.

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FOREIGN DEBT

Croatian foreign debt soars, driven by spending 

Croatia's foreign debt grew by another 680 million Euro in the first two months of 2006, bringing the total to 26.2 billion, the business daily Poslovni Dnevnik reported, cited by Deutsche-Presse-Agentur (dpa). 
The debt-to-gross domestic product ratio is now 84.2 per cent, pushing Croatia into the bracket of highly indebted countries, it said. The state has cut its share in the foreign debt from 31.8 in 2004 to 27.7 in 2005, while the share of companies grew from 25.5 to 27.9 per cent. Banks own the largest chunk - 35.2 per cent - of the total foreign debt. They borrow abroad and offer credits at home, reaping a profit on a difference in interest rates. 
Despite a set of restrictive measures that made the price of borrowing more expensive, the demand for credits in Croatia remained undampened, prompting the central bank to plan more restrictions. The authorities are concerned over the distribution of the foreign debt, as most of it went on spending - imports of consumer goods - and least into investments. 
Nevertheless, last year Croatia generated economic growth of 4.3 per cent, Prime Minister, Ivo Sanader, said, citing preliminary data, Hina news agency reported. 
He added that the economic growth rate in the last quarter of 2005 was 4.9 per cent. According to official figures provided by the National Bureau of Statistics, the economic growth rate in the first quarter of 2005 was 1.8 per cent; in the second quarter it was 5.1 per cent and in the third 5.2 per cent. Finance Minister, Ivan Suker, also cited positive economic trends, saying that industrial production had increased 5.2 per cent in the last ten months and that in the first three months of this year budget revenue rose 14 per cent over the same period last year. He noted that the revenue growth was partly due to a government crackdown on the grey economy. Suker said the budget deficit was reduced from 3.7 billion crowns in the first three months of 2005 to 1.7 billion crowns in the same period this year.

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INFORMATION TECHNOLOGY

Economy minister announces internet portal for SMEs 

An internet portal called "Business Navigator," intended for small and medium-sized enterprises and foreign investors, will be launched this summer at a national seminar on the economy and entrepreneurship, Croatian Economy Minister, Branko Vukelic, said at a news conference recently, Hina News Agency reported. 
The portal will consist of four sections - a financial guide, a business network, business centres and a section for foreign investors. The financial guide will contain information on loan possibilities offered by business and development banks, incentives offered by state institutions, guarantees provided by the Croatian Bank for Reconstruction and Development and the Croatian Agency for Small Businesses, EU funds, etc. The business guide will contain information on companies offering 27 different business services needed by business people. The section on business centres will offer information on institutions facilitating business - industrial and free zones, entrepreneurship centres and incubators, chambers and associations and their services. The section intended for foreign investors will provide information on industrial areas with the highest growth potential, as well as on tax benefits, legislation etc.

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RETAIL TRADE

Retail trade growth increases 3.6% 

The retail trade growth in Croatia increased in January 2006, reaching 3.6 per cent year on year, SEEurope reported. 
The expansion of retail trade in the first month of 2006 was faster than it had been a year earlier (when retail trade rose by 1.1 per cent year on year) as well as in 2005 as a whole (2.8 per cent). Retail trade expansion was primarily driven by increased purchases of gas, driven up by increased prices. Besides gas sales, the other primary factors leading to faster retail trade expansion in January was an increase in pharmaceutical and drug sales.

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