Books on Croatia
% of GDP
Update No: 112 - (26/09/06)
Barroso drops a bombshell; EU expansion to pause after
Romania and Bulgaria
Croatia's aspirations to join the EU are becoming a casualty of European
in-fighting, it would appear.
Croatia hopes to join by 2009. It opened membership talks with the Union on 3
October 2005; the first stage of the negotiations process, known as the
screening, began 17 days later. During this phase, the country's legislation is
evaluated for compatibility with the Union's acquis communitaire.
However, European Commission President Barroso has delivered a bombshell. He
said on September 25th that Croatia can only enter the EU when the union has a
new treaty, refocusing Brussels' agenda on the "increasingly pressing"
One day before the release of a commission report which is set to recommend
Romania and Bulgaria join the bloc on January 1st, the commission chief told
journalists that Bucharest and Sofia will be the last states to be let in before
the union has sorted out its institutional mess.
"It would be unwise to bring in other member states, apart from Romania and
Bulgaria, before we have sorted out the whole institutional issue. We've got to
a point in time where this issue has become increasingly pressing," he
added. The remarks confirm earlier hints given by commission officials that
Croatia's hopes of joining in 2009 and taking part in that year's European
Parliament elections are likely to be dashed.
EU member states are aiming at consensus on a new treaty before the end of 2008
- but ratification of any fresh text could take more than a year and could again
fail, after French and Dutch voters rejected the EU constitution in referendums
Commission officials were quick to explain Mr Barroso's words "not as a
negative signal towards Croatia, but as a positive signal for a new
The EU's current Nice Treaty obliges member states to change the composition of
the commission after the bloc has let in its 27th member - sparking the need for
reform in any case before Croatia can join. But Mr Barroso made clear that small
treaty changes would not be enough, explaining "that is the time to take a
decision on the constitutional treaty."
Croatia has plenty of friends in Europe, more ironically than Bulgaria and
Romania. It is certain to be let into the EU sooner or later, unlike say Turkey.
The Germans, for instance, who are reluctant to allow in more Turks, are keen
fans of Croatia. Germany was the first country to recognize its independence in
EU promises to assist Croatia in meeting criteria
European Commission Vice President Franco Frattini has said that the EU
would help Croatia in its efforts to meet Union membership requirements in the
area of justice and security. Voicing hope that the European Commission (EC)
will be able to open talks on justice, freedom and security with Croatia in
early 2007, a top Brussels official said that the EU would assist the country
with preparations in this area.
Screening for the negotiating chapter of the acquis communitaire on justice,
freedom and security was completed in late February and the EC is expected to
soon complete the relevant reports. This will allow officials in Brussels to
open detailed talks with Zagreb on this chapter in early 2007, EC Vice President
Franco Frattini said, following talks with Croatian Interior Minister Ivica
Kirin. "We intend to speed up the process paving the way to start concrete
negotiations," the AP quoted Frattini, who is also EU Commissioner for
Freedom, Justice and Security, as telling reporters in Brussels.
The chapter on justice, freedom and security covers a wide range of issues,
including asylum applications, visa regimes and migrations. Border protection,
the fight against terrorism, judicial co-operation and co-operation among
countries' customs officials and police are also included in this chapter.
The EU will help Croatia in its fight against organised crime, corruption and
drug trafficking, as well as in border protection, Croatian news agency HINA
quoted Frattini as saying.
Concrete measures the Union would assist in include the recruitment and training
of border guards and the development of a "comprehensive strategy" for
fighting organised crime. Frattini said he would also push for an agreement
between Croatia and the EU's anti-narcotics agency to improve co-operation in
the fight against drug trafficking.
Kirin noted that Croatia is implementing measures to establish the Schengen
border regime and had asked the EU for assistance in providing equipment for
border police and protecting seaports against criminal gangs and terrorists,
Europe's conservatives expressed their strong support for Croatia's bid to join
the EU by 2009. "We are supporting strongly the government of Prime
Minister Ivo Sanader and although we know that the timetable is certainly
ambitious, we support this," Hans-Gert Poettering, the leader of the
European People's Party (EPP) said in Croatia's southern coastal town of Split.
He was speaking at the opening of a two-day meeting of the EPP and the European
Democrats, which together form the largest political grouping in the European
Croatia is viewed as a model case by other countries in the Balkans who are
watching developments closely, said former EU.
Agriculture Commissioner Franz Fischler, who currently serves as adviser to
Sanader on the accession talks. "If everyone in Europe has the same
attitude about Croatia and our [EU] perspective like the EPP-ED and Poettering,
then we have nothing to be afraid of," the AFP quoted Sanader as saying.
Indeed, there are now no obvious opponents of the idea in Europe, except
possibly the Serbs and their influence in the EU is not marked.
Sale of oil shares
The Croatian government said on September 14th it would list 15-17 per cent
of its shares in the INA oil company on the Zagreb and London stock exchanges.
The offering, to take place in November, would price shares at 900 kuna (123
Euro, US$158) each, Deputy Prime Minister Damir Polancec said.
Croatian citizens would have the right to buy the shares first, in amount of up
to 38,000 kuna (5,205 Euro, US$6,666). They also would get one share for each 10
shares they buy. "Our aim is that Croatian citizens also get involved in
the privatisation of INA," Prime Minister Ivo Sanader said.
The last INA share offering occurred in 2003, when the government approved the
sale of 25-percent-plus-one-share stake to Hungarian oil company MOL for US$505
million _ one of the largest sales of state assets since the country's 1991
independence. MOL has said it wants to increase its stake in INA.
Banks' H1 revenues rise by 16.3%
Unrevised data on financial results of banks operating in Croatia published by
the National Bank of Croatia (HNB) stated that domestic banks in the first half
of 2006 achieved 2.064bn crowns in pre-tax revenues, which is up by 16.3 per
cent on the same period last year, when total revenues reached 1.775bn crowns,
news agency reporter.gr cited Croatia Today as reporting.
Combined active assets of banks increased form last year by 17.8 per cent to
277.8bn crowns. Compared to last year, active assets of all banks have increased
by 6.72 per cent. The highest pre-tax revenues amounting to 519.6m crowns were
reported by Privredna banks, followed by Zagrebacka banka with 467.4m crowns.
The list of banks with gross revenues exceeding 100m crowns also includes RBA
(251.3m crowns), ESB (207.3m crowns), Splitska banka (153.7m crowns) and Hypo
Alpe-Adria bank, with 117.8m crowns. Active assets are still the highest in
Zagrebacka banka, which has increased its own assets for the past six months by
4.37 per cent to 66.2bn crowns.
INA-MOL buys Energopetrol
Croatian-Hungarian consortium INA-MOL signed on September 8th in Sarajevo a deal
with the Bosnia's Muslim-Croat Federation Government taking over its 67 per cent
of shares in Bosnia's major fuels retailer company Energopetrol, Deutsche
Presse-Agentur (dpa) reported.
The deal was signed after more than a year and a half of negotiations and was
expected to cost INA-MOL consortium more than 110 million Euro. Some 35 million
Euro would go to pay Energopetrol's debts, while the rest would be gradually
invested in the next three years to improve and modernise the company, officials
Bosnia's Muslim-Croat Federation government would keep 22 per cent of shares in
Energopetrol, while small shareholders would keep the remaining 11 per cent of
shares. Purchasing Energopetrol's shares and spreading business to Bosnia,
according to head of the Hungarian MOL management Zsolt Hernadi, would
significantly contribute to the further improvement of the oil industry in
Bosnia-Herzegovina. Hernadi also said INA-MOL consortium "is ready to make
Energopetrol a regional oil giant." Buying Bosnia's Energopetrol, INA-MOL
inherited 64 petrol stations across Bosnia-Herzegovina as well as more than
Oil company INA cuts fuel prices
Croatian Oil Company INA said it would reduce the price of super plus 98 petrol
by 4.9 per cent, while retail prices of other oil derivatives would remain the
same, "Croatia Today" reported.
As of September 5th, the price of super plus 98 petrol on INA's fuel stations
would be 8.27 crowns per litre (down from 8.70 crowns). After crude oil prices
decreased in international markets, OMV Croatia also announced reduction of fuel
prices offered by the company (OMV Eurosuper 100 BS, OMV Eurosuper 95) between
4.7 and 4.9 per cent, news reports said.
New prices would be in force as of September 5th. By the end of 2006, the
company plans to operate a total of 54 petrol stations throughout Croatia.
Barr offers US$2.5bn for Pliva
Barr Pharmaceuticals Inc increased its bid for Pliva dd to US$2.5 billion,
trumping an offer from Icelandic rival Actavis Group in the contest to become
the world's third-biggest maker of generic drugs, news website reporter.gr cited
"Croatia Today" as reporting on September 13th.
Barr is offering investors in Zagreb (Croatia) based Pliva 820 crowns
(US$141.21) a share, compared with Actavis's latest bid of 795 crowns a share
for Pliva. Luis Cortez, vice president at Essex Investment Management Company
LLC, which owns shares in Barr, believes US$2.8 billion "is probably a
limit of how much they can pay and not dilute themselves too much." Generic
drugs are less profitable than branded products, and so big companies are making
purchases to increase the scale and reach of their operation.
Israel-based Teva bought Miami-based Ivax Corp for US$7.4 billion this year
after Switzerland-based Novartis purchased Germany's Hexal AG and US affiliate
Eon Labs last year. The global market for generic drugs, now worth US$58
billion, may grow to US$100 billion in sales by 2010, according to UK market
researcher Datamonitor. A union of Barr and Pliva would create a company with
US$2.5 billion in annual revenue and about 170 generic products in development.
Actavis touched off the bidding for Pliva last March with an unsolicited bid of
US$1.6 billion, later raised to US$1.85 billion. Pliva rejected both bids as too
low and eventually endorsed a rival offer from Woodcliff Lake, New Jersey-based
Barr on June 27th. Actavis responded by buying shares in Pliva, amassing a 20.8
per cent stake in the company by June 30th.