ZAGREB, March 8, 2018 – Prime Minister Andrej Plenković said at a cabinet meeting on Thursday that the government should work more on attracting investment as the generator of growth, and added that he expected all government departments to continue structural reforms.
Commenting on Wednesday’s European Commission report assessing progress on structural reforms, prevention and correction of macroeconomic imbalances, and results of in-depth reviews of the economic policies of the EU member states, Plenković said that the report was useful as it presented areas in which Croatia had made progress last year and identified areas where “we need to be better and faster.”
“The Commission’s report says that there is the magic triangle, consisting of investment, structural reforms and a responsible fiscal policy. I think it is more than clear to all of us in the government that we have to work more on attracting investments, both domestic and foreign. They are certainly an important generator of growth and in this regard I expect all of you to take important steps forward in continuing the structural reforms,” the PM said.
He said that the focus should be on the reform of the education system, the judicial system, public administration, the pension system, and on improving the business environment. He said that based on the Commission’s latest analysis and its recommendations from last year, progress should be made to increase growth.
Plenković said that already this week discussion had begun on bills relating to strategic investment, tax relief for businesses’ research activities, and on further easing the administrative burden on businesses. “All this is part of reform efforts to be made this year,” he said, adding that he expected all government departments to thoroughly analyse the Commission’s 73-page document on Croatia.
The Commission said on Wednesday that Croatia is one of three member states which still have excessive macroeconomic imbalances, although they are being reduced. Croatia, Cyprus and Italy were identified as having excessive macroeconomic imbalances. The imbalances are being reduced in Croatia and Italy with a combination of reforms, favourable economic conditions and reduction of risks in the banking sector. However, there is a need for more resolute implementation, especially in Croatia.
“Croatia has made limited progress in addressing the 2017 country-specific recommendations. Fiscal policy, supported by favourable macroeconomic conditions, has ensured a declining debt ratio, but structural measures have not advanced,” the Commission said.
