Croatia Politics, Business, Analysis and Tenders Bulletin for March 7, 2016

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Zagreb, March 7, 2016.

1. Politics
2. Business
3. Analysis
4. Bulletin
5. Weekly Agenda
6. Selected Tenders


Government Proposes Changes to Law Which Will Allow Army to Help the Police Control Borders
The Croatian government on Friday accepted a proposal to change the Law on State Border Control and the Law on Defence which will enable the armed forces to provide support in the protection of the state border. The proposals have been sent to Parliament, which is expected to adopt them in urgent procedure. Interior Minister Vlaho Orepić pointed out that the decision was a result of the current situation and that the armed forces would be used only in exceptional cases and according to police instructions. Defence Minister Josip Buljević said that the decision to send the army to the border would be made by the government upon the proposal by him as Minister and with the prior approval of the President and Commander in Chief of the Armed Forces. “The army will do what the police deem necessary and ask the army to do”, said the Minister. President of SDP and former Prime Minister Zoran Milanović said that sending the military to the border was a bad idea. “The army has been helping police for months, but the task of the police is to control the state border. It makes no sense to use the army since Croatia is not being attacked”, said Milanović.

Parliament Appoints New Acting Director General of Croatian Radio Television
Croatian Parliament on Friday dismissed Goran Radman as Director General of Croatian Radio Television (HRT) and appointed journalist Siniša Kovačić as acting DG. Radman was dismissed by 78 votes to 4, with 29 abstentions. Kovačić’s appointment was supported by 79 MPs to 15, while 18 abstained. The procedure for Radman’s dismissal was initiated by the HRT Supervisory Board which claimed that Radman acted against the provisions of the Law on HRT and that he did not ensure separate bookkeeping for public and commercial revenues. After the appointment, Kovačić said he intended to raise the level of professionalism with the goal of making HRT’s programme more objective. “I expect that HRT will continue to be open to all groups in society, but also that it will protect Croatian national interests, Croatian identity, and culture”, said Kovačić. The official handover of duties between the former and new acting Director General should take place on Monday.

PM Orešković Meets With Veterans Associations Representatives
Prime Minister Tihomir Orešković on Friday received a delegation from the war veterans’ associations, saying he wanted to hear directly from the veterans as to what problems they have and what the government could do to address them. He announced that he will meet with other veterans’ associations on Tuesday, after he returns from the EU summit in Brussels. Orešković also thanked the veterans for their contribution to the defence of Croatia, saying that without them he would not have been able to become Prime Minister. Đuro Glogoški, one of the leaders of the veterans’ protests, welcomed the government’s new approach, recalling how much time it took for the former Prime Minister to meet with them. He added that they informed Orešković about their protest which started 502 days ago, as well as about problems facing the veterans. Asked when he would propose a new Veterans Affairs Minister, Orešković answered that it would happen in about a weeks’ time. He added that HDZ secretary general Milijan Brkić’s candidacy will be on the table, together with other potential candidates. If veterans’ associations were willing to propose their own candidate, they could do that and “we will choose the best person for this important ministry”, said Orešković.

Ruling Coalition Announces that “Government Processes Should Be Accelerated”
Darinko Kosor, president of HSLS, a member of the Patriotic Coalition, said on Friday after a meeting of the coalition that it was agreed they would speed up government operations. “This was a regular meeting that we had scheduled a week ago. We made two decisions – processes should be accelerated and we will have regular coordination meetings”, said Kosor, who the day before mentioned that he was unhappy with the way parliamentary committees and government were functioning, and sent a message to his coalition partners – “we should reset all of us, or we should have new elections”. Kosor then added that he could “spend two days talking about problems in the ruling coalition”.

Election Campaign for SDP President Officially Begins
The SDP Main Committee met on Saturday and confirmed the candidacies of two senior party members, Zoran Milanović and Zlatko Komadina, for the position of party president, which marked the official beginning of the election campaign. Before the meeting started, Komadina said he was sure he would win. Chairman of the Main Committee Josip Leko did not want to say who it was that he supported, saying that he was interested in party policies and not individuals. A third potential candidate, Duško Polovina Lungo, failed to collect the necessary 1,000 signatures of support, but claimed that he had been prevented from doing so. Milanović appeared just at the beginning of the meeting and then left the room, which dismayed some members, including the Mayor of Split, Ivo Baldasar, who told reporters that he thought Milanović showed disrespect to the party body.


Finance Minister Talks about Economic Policies in 2016
In an interview with Večernji List, Finance Minister Zdravko Marić said that the government was preparing 220 tenders worth up to three billion euros for infrastructure and other projects. “These are large infrastructure projects, such as the Pelješac Bridge, but also a number of smaller projects”, said Marić, adding that economic growth should also be supported by growth in private consumption. “Investments, continued recovery in private consumption, and a slight contribution of net exports will be the main drivers of growth”, said Marić. He said that the new government had no plans to change tax rates this year. The Minister expects that this year about 15,000 new jobs will be created, not including seasonal jobs. He also said that they would consider the issue of reducing the number of employees in state and public administration systems. “From the perspective of the budget, I see the wage bill as a problem”, he said, stating that the total wage bill exceeds 11 percent of GDP. “More than 380,000 people, or one in four employees in the country, work in the public sector if we include public companies and local government administration. We have started a dialogue with union representatives and I hope for a constructive and sustainable solution”. The Finance Minister also said that, in the first two months of this year, the budget had recorded a growth in tax revenues. “We have planned the revenues in line with the macroeconomic projections and, at the moment, I do not see any anomalies”, concluded Marić.

Croatia Airlines Ranked Eighth in the World by Quality of Service
Croatia Airlines, the Croatian national airline, has been ranked as the eighth best airline in the world by quality of service, according to data released by Air Help, which specialises in evaluating the quality of commercial air transport and assistance given to passengers in exercising their rights. The research included 30 airlines from around the world and was based on three criteria – customer satisfaction with the quality of service, accuracy of flight schedules, and the respect of passenger rights. Croatia Airlines, which has been in operation for 26 years, finished ahead of many international airlines with much longer tradition and bigger fleets. Customers awarded Croatia Airlines 9.5 out of a possible 10 for respecting passenger rights, which was the best result of all airlines included in the survey. This is the second international recognition for the company after had recently included it as one of the safest air carriers among the 407 companies ranked.

M San Group Launches a New Production Facility for LED TV Sets and Screens
M San Group presented on Friday a new facility for the production of LED TV sets and screens in Rugvica near Zagreb, in which it has invested 4.5 million kuna. During the tour of the plant, representatives of M San Group, which produces and distributes computers and various other devices, said that the investment had enabled them to expand the existing production of their own Vivax brand and to launch the production of LED screens, which used to be imported. According to their estimates, the share of Vivax LED TV sets on the Croatian market is about 15 percent. This year, they expect that market share to reach about 19 percent, with additional growth in exports and income. M San Group finished last year with 1.75 billion kuna in total revenues, which is 5.5 percent more than in 2014.Image

Tourism Minister Satisfied with Forecasts for Easter Holidays
Tourism Minister Anton Kliman said on Saturday that the forecasts ahead of the Easter holidays were optimistic, but that Croatian tourism was in need of new investments. We can mostly grow in the pre-season and post-season months, but “we need to increase capacities”, said the Minister. “We need new investments in tourism, we badly need new hotels and new capacities because I am not sure that the amount that is currently being invested is enough for the competitiveness of Croatian tourism”, said Kliman. “In this challenging part of the pre-season, and later in the post-season, there is still much to do in the branding of destinations, but also in changing the awareness of what the periods from Easter to June and from September to the end of the year should mean to us”, said Kliman.


Croatian Budget Deadline Top Priority Despite Coalition Divisions

Krešimir Macan analyses the latest developments. He is a respected Croatian PR professional specialis­ing in crisis management, strategic communication in politics, and new social media, operating today a successful private consul­ tancy – Manjgura. You can contact Krešimir on
[email protected]

March 10  is the self-imposed date by Croatian PM Tim Orešković for the presentation of the first draft of his 2016 budget, and this seems to be the top priority of the government for the week ahead.

Orešković will present it even though he is still without a Veterans Minister and some deputy ministers, so the government remains incomplete. Orešković is facing several challenges on a personal level. He has so far refused to cave in and accept the publicly-served wishes of the President (the dismissal of the director of Security Intelligence Agency – SOA), or HDZ president who wants Milijan Brkić, whose allegedly plagiarised diploma is under public scrutiny, as the new Veterans Minister. Accepting both of them now would show him in public as someone who actually takes orders instead of giving them. The nomination of Jakša Puljiz as his CIO shows that he is trying to establish his circle of influence independently from HDZ as much as possible.

On the other side, we are witnessing growing dissatisfaction with HDZ and their coalition partners on the one side, and of MOST on the other. MOST has already taken most of the important ministries and is now claiming some important public companies like HEP (Croatian power company) and other agencies. By claiming these agencies, they limit the available ‘prey’ for distribution to HDZ and others, which is causing growing dissatisfaction.

MOST is losing support in all the relevant polls, and is currently running under 10 percent (compared to 13.7 percent at the elections four months ago), while both the HDZ and SDP-led coalitions have maintained their ratings. Polls also indicate growing dissatisfaction with “dysfunctional” Tim’s cabinet. So March could be a tipping point after the budget approval. HDZ would like to reduce MOST’s influence and assemble a majority in Parliament if possible without them. For example, the HDZ Minister of Transport announced that the government would finish the “Istrian Y” highway, which could secure them three IDS mandates if needed. Well-informed sources say that Karamarko will wait to get control of the media (HRT) and intelligence service (SOA) to move on with this plan and even instigate new elections.

The media is also reporting that Ivica Relković, the brain behind MOST and a conservative activist close to the Church, might be appointed as special advisor to Deputy Prime Minister Petrov. This would clearly position MOST in the public perception more to the right, which would lead to further polling losses. In that scenario, HDZ is likely to benefit more than in November due to the electoral system. But keep in mind that Živi Zid continues to rise, due to strong activities of their leader Sinčić in the Croatian Parliament. He is but one man, but a consistent one :-).

Milanović and Karamarko seem to be favourites in their ongoing races for party presidents.

March might bring us a budget, but the Croatian Game of Thrones is just beginning.

Croatia Should Change the Focus of Its Educational System and Turn towards the Future

Vladimir Nišević writes about misplaced focus in the Croatian educational system (published in Poslovni Dnevnik on March 7, 2016).

The Croatian educational system has recently been in the media focus, with the beginning of the debate on curriculum reform. However, most of the discussions deal with the particular issue of which books the children will be required to read in school. There is rarely any mention about labour market needs and development plans which will last longer than the four-year term of a government. The global economy is fundamentally changing and richer countries are putting a lot of effort into adapting to new trends. The main issue in Croatia is whether Marko Marulić should be on the obligatory or optional list of books. Many articles and TV debates have been devoted to this one issue. Do members of Milanović’s, Karamarko’s, and Tim’s teams ever ask themselves how Croatian children will be competitive within the EU? Where and with what skills will they work in twenty years? While German or French youngsters will be opening their own companies and working with advanced technologies, young Croats will perhaps sit in their grandmothers’ apartments and wait for tourists to come over the summer to leave a few euros. Croatia will become competitive only if it stops discussing whether we need the Iliad or the Odyssey and turns its focus towards smart boards and tablets or, at least, free Wi-Fi in classrooms.


Pope Francis Names Members of the Stepinac Commission
Pope Francis has chosen members of the Vatican commission which will cooperate with the commission of the Serbian Orthodox Church regarding the issue of canonisation of Croatian Cardinal Alojzije Stepinac. The members are: Cardinal Josip Bozanić, Archbishop of Zagreb; Antun Škvorčević, Bishop of Požega; Ratko Perić, Bishop of Mostar-Duvno; and professors Jure Krišto and Mario Jareb. Pope Francis on Thursday received members of the Permanent Council of the Croatian Bishops Conference. They informed the Pope about the state of the Catholic Church in Croatia and discussed the work of the commission. The members of the Permanent Council had separate meetings with the Secretary of State Pietro Parolino and the President of the Papal Council for the Promotion of Christian Unity Cardinal Kurt Koch.

PM Orešković to name Jakša Puljiz as Chief Integration Officer?
According to media reports, Prime Minister Orešković will this week appoint Jakša Puljiz as the government’s chief integration officer, the person who will coordinate the work of all ministries and oversee major projects and investments, as well as the process of withdrawal of money from European funds. In the previous SDP-led government, Puljiz was Deputy Minister of Regional Development and EU Funds. Former Minister Branko Grčić welcomed the news. “Puljiz is a professional, non-party person, who can contribute the most to Croatia at this moment”, said Grčić. Puljiz also participated as a consultant and advisor in various projects which were funded by national and international authorities such as the European Commission and the World Bank, mainly in the field of regional development and the use of pre-accession programmes of the European Union.

Regional Development and EU Funds Minister Meets with Norwegian State Secretary
Minister of Regional Development and EU Funds Tomislav Tolušić met on Friday with Norwegian State Secretary Elsbeth Sande Tronstad, who was on an official visit to Zagreb. They discussed the implementation of projects under a grant approved by Norway and the countries of the European Economic Area, the Ministry said in a statement. In April 2014, Croatia signed a memorandum of cooperation with Norway and the countries of the European Economic Area for a grant worth 73.5 million kuna. State Secretary Tronstad expressed her satisfaction with the implementation of projects in Croatia, adding that soon negotiations between Croatia and Norway will start for the new programming period 2014-2021, in which Croatia will have available about 103 million euros.

Starting on Friday, Croatian Citizens to Be Able to Enter Switzerland with ID Cards
Starting on 11 March, Croatian citizens will be able to travel to Switzerland with just a valid identity card, it was announced by the Croatian Ministry of Foreign and European Affairs, this past Friday. “Croatia has reached an agreement on the abolition of compulsory use of passports for tourist trips by Croatian citizens, which will enable Croatian citizens who travel for tourist purposes to enter the Swiss territory with a valid identity card”, the statement said. The EU and Switzerland on Friday signed a protocol extending to Croatia their mutual agreement on the free movement of people, which marked the first formal step in resolving the status of Croatian citizens in Switzerland, stemming from Croatia’s full membership in the EU.

Prime Minister Orešković Discusses LNG terminal with Ambassador of Qatar
Prime Minister Orešković met on Friday with Ambassador of Qatar in Croatia Sheikh Moza Bint Nasser bin Ahmed Ali Al-Thani, with whom he discussed bilateral relations and the possibilities of economic cooperation between the two countries, especially with regards to liquefied natural gas projects, announced a statement from the government. The European Commission has supported projects which improve access to the global market of liquefied gas, and its priority list includes an LNG terminal on the island of Krk, a project which increases energy sustainability and security, and diversification of sources of supply for much of the European Union. According to the statement, Qatar has been interested in this project for several years and is a possible partner.

Croatia to Take Part in NATO Exercise CMX16
From 9 to 16 March, Croatia will participate in the NATO political-military simulation exercise CMX16 on the topic of crisis management, which will simultaneously take place at NATO headquarters in Brussels and in member states, announced the Ministry of Foreign and European Affairs. CMX16 will test procedures of the North Atlantic Council on the strategic political and military level. The main objective of the exercise is to train the mechanisms of strategic political and military consultations and collective decision-making through existing and new procedures and concepts regarding emergency management. The exercise will include both civilian and military personnel.

Croatia’s Istok Rodeš Becomes World Junior Skiing Champion
Croatian skier Istok Rodeš became the world junior champion in slalom, while Elias Kolega won a bronze medal in Saturday’s race held on the Olympic track in Sochi. Rodeš is the first Croatian skier to win the world title. Croatian skiers took the first two positions in the first run. Although eight skiers were faster than him in the second run, Rodeš was able to keep his advantage from the first run and took the victory.

Weekly Agenda

Monday, 7 March
Extraordinary Summit EU-Turkey about the migrant crisis will be held in Brussels. Croatia will be represented by Prime Minister Tihomir Orešković.

Parliament Speaker Željko Reiner will receive a delegation of the Coordination of Croatian Friendship Societies. The meeting will be attended by Chairman of the Parliamentary Foreign Affairs Committee Davorin Mlakar and Member of Parliament Goran Beus Richembergh.

Chairman of the Parliamentary Committee on Finance and Budget Goran Marić will attend the opening ceremony of the EU Funds Week.

Tuesday, 8 March
Members of the Presidency of Bosnia and Herzegovina will arrive in Croatia for a two-day visit. On Tuesday, they will meet with President Kolinda Grabar-Kitarović.

On the occasion of the International Women’s Day, the Parliamentary Committee on Gender Equality will meet and discuss the topic “Role of Women in Demographic Renewal”. The meeting will be co-organised by the B.a.B.e. Association.

The Parliamentary Committee on Education, Science, and Culture will meet and discuss “Report on the Activities of the National Council for Science, Higher Education, and Technological Development in 2015”.

The Parliamentary Committee on Environment and Nature will meet and discuss the implementation of the laws on sustainable waste management.

The Serbian National Council will present the latest issue of its bulletin titled “Hate Speech and Violence against Serbs in 2015”. The bulletin will be presented by Milorad Pupovac, president of the Serbian National Council, and Tamara Opačić, the author of the bulletin.

Wednesday, 9 March
Members of the Presidency of Bosnia and Herzegovina will continue their official visit to Croatia. They will hold separate meetings with Prime Minister Tihomir Orešković and Speaker Željko Reiner.

Parliament will continue its second session.

The parliamentary caucus of MOST will organise a roundtable discussion on “Sustainability of the Second Pillar of the Pension System in the Context of Imbalance”.

The Parliamentary Committee on Family, Youth, and Sports will meet and discuss the “Report on the Implementation of the National Strategy and Action Plan for Combating Drug Abuse in 2014”.

The Parliamentary Committee on Human Rights and Rights of National Minorities will meet and discuss the “Report on the Activities of the HRT Programme Council”.

Thursday, March 10
Government will hold its regular meeting. Prime Minister Orešković earlier announced that the budget for 2016 will be presented on 10 March.

Parliament will continue its second session.

The Parliamentary Committee on Internal Affairs and National Security will meet and discuss the “Annual Report on the Activities of the Military Security Intelligence Agency in 2015”.

Friday, March 11
Parliament will continue its second session.

The Zagreb District Court will continue with the trial of former Prime Minister Ivo Sanader in the Planinska case.

Selected Tenders

Tender: Reconstruction of the main water supply pipes in Županja
Client: Komunalac, d.o.o., Županja
Value: 1,180,000 euros
Submission deadline: 18 March
Description: Dilapidated asbestos cement pipes should be replaced with PEHD pipes with nominal pressure of 10 bar, with a diameter from DN 90 to DN 225, in the total length of approximately 8,000 metres. The pipes are intended for the distribution of drinking water. Valve junctions should be replaced as well. The works should be completed by 30 November. The selection criterion is the lowest price.

Tender: Construction of a kindergarten in Malinska
Client: Municipality of Malinska-Dubašnica
Value: 1,980,000 euros
Submission deadline: 17 March
Description: Subject matter of the procurement is the construction of a child care and kindergarten facility in Malinska. The building will have a basement, a ground floor and a first floor. The ground floor will be used for two nursery and one kindergarten group, and the first floor for three kindergarten groups. In the basement, there will be service rooms for employees. Part of the plot will be used for outdoor activities. Total plot area is 3,296 square metres. The works should be completed within 220 days. The selection criterion is the lowest price.

Tender: One-year procurement of dentistry supplies
Client: Klinički bolnički centar Zagreb
Value: 352,000 euros
Submission deadline: 12 April
Description: The subject matter of the tender is a one-year procurement of various dentistry medical supplies, divided into 24 groups. Supplies should be delivered within 7 days after an order is received. The selection criterion is the lowest price.

Tender: Medical supplies for haemodialysis
Client: Istarski domovi zdravlja
Value: 630,000 euros
Submission deadline: 11 April
Description: The subject matter of the tender is procurement of medical supplies for haemodialysis (7,500 dialysis per year). Supplies should be delivered to Labin and Umag haemodialysis centres. The supplies are not divided into groups. Details about the supplies are set out in tender documents. The selection criterion is the lowest price.

Tender: TV Equipment for HRT studios in Osijek and Pula
Client: Hrvatska radiotelevizija
Value: 430,000 euros
Submission deadline: 11 April
Description: The subject matter of the tender is procurement of professional TV equipment for HRT studios in Osijek and Pula. The equipment is divided into two groups, and should be delivered within 45 days after an order is received (by 31 July at the latest). The selection criterion is the lowest price.

Tender: Water system supplies
Client: Vodovod i kanalizacija, d.o.o., Karlovac
Value: 414,000 euros
Submission deadline: 22 March
Description: The subject of the tender is procurement of water system and plumbing materials (fittings, valves, steel pipes, galvanised pipes, galvanised fittings, gaskets, bolts, etc.) divided into three groups, in accordance with technical specifications and other requirements specified in the tender documents. The supplies must be delivered within 10 days after an order is received. The selection criterion is the lowest price.

Tender: Reconstruction of the secondary systems and the auxiliary power supply at Zakučac Hydroelectric Power Plant
Client: Hrvatski operator prijenosnog sustava, d.o.o.
Value: 380,000 euros
Submission deadline: 23 March
Description: The subject of the tender includes delivery of equipment; electrical installation works on the secondary equipment and auxiliary AC and DC systems; configuration, parameter setting and testing of secondary equipment devices; delivery and testing of AC and DC distribution systems; final tests to achieve full functionality of the system. The services should be completed within 90 days after the contract comes into effect. The selection criterion is the lowest price.

Tender: Delivery of tyres for vehicles
Client: HAC održavanje i naplata cestarine, d.o.o.
Value: 230,000 euros
Submission deadline: 13 April
Description: The client is procuring tyres for vehicles divided into three groups: tyres for trucks; tyres for heavy machinery and trailers; tyres for passenger, off-road and light commercial vehicles and motorcycles. The tyres must be delivered within 10 days after an order is received. The selection criterion is the lowest price.

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