European Commission Brings List of Demanded Reforms

Total Croatia News

A delegation from Brussels will spend the next two days in Croatia.

In the framework of the European semester, representatives of the European Commission will be in a working visit to Croatia on Monday and Tuesday, reports on March 13, 2017.

They will hold a series of meetings with relevant Croatian agencies to discuss structural reforms as part of the preparation of the National Reform Programme that EU member states will submit to the European Commission in April.

Laura Bardon, head of Department for Croatia and Spain in ECFIN Directorate General, will today hold a short presentation at the Representation of the European Commission in Croatia on topics related to the country report for Croatia in 2017. European Commission last month published its winter economic forecasts, in which it substantially revised its estimate of growth of the Croatian economy. For this year, the European Commission forecasts acceleration of growth of the Croatian economy to as much as 3.1 percent.

In the report, the European Commission emphasized that the main basis for the recovery of the Croatian economy was robust domestic demand. “The growth of 1.7 percent in the third quarter of 2016 was higher than expected. All components of domestic demand contributed to this vigorous growth. While exports of goods declined, exports of services jumped by 3.5 percent compared to the previous quarter, due to the successful tourist season”, said the EC in its forecast.

However, in an in-depth analysis of macroeconomic indicators for countries that have excessive macroeconomic imbalances, including Croatia, published in late February, despite the positive short-term trends, the European Commission still suggested modest growth prospects for the long term. Due to the slow growth of productivity and poor utilization of human resources, the potential growth rate is just one percent and is lower compared with other similar countries.

The main reason for this is the slow implementation of necessary reforms. The report noted that Croatia had made only limited progress in implementing the recommendations for 2016. The greatest improvement has been seen in the introduction of property taxes and in the management of public debt. Limited progress can be seen in the strengthening of tax discipline, public administration reforms, management of state assets, reducing fiscal charges and administrative barriers, and improving the judicial system. The Commission found there had been no progress in reforming the pension and social welfare systems, and in harmonization of public sector salaries.


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