Croatian Government Reshuffle Brings No Changes to Economic Situation

Lauren Simmonds

As Marija Brnic/Poslovni Dnevnik writes on the 20th of July, 2019, after Croatian Parliament ratifies the Croatian Government’s cabinet reshuffle, Andrej Plenković’s “ship” will probably carry in sailing just as it has until now right up to the end of his mandate and an unfortunate situation such as the country assuming the EU presidency under political instability, will likely be avoided. That all looks great on paper, but it doesn’t change anything at all as far as the state of the Croatian economy is concerned.

PM Plenkovićs ”new people” are Marija Vučković, Vesna Bedeković, Ivan Malenica, Gordan Grlić Radman, Josip Aladrović and Mario Banožić.

When it comes to what might be positive for Croatian business, judging by the first estimates, would be an attempt by this group of new Croatian ministers to distinguish Croatia’s infamous negative business and investment climate and the absolutely tragic public perception of the state management system.

“Political stability is a prerequisite for economic growth, so it’s most important that after the reconstruction of the government, that the continuity of the economic policy that goes in the direction of tax breaks for entrepreneurs remains as it is. If the staff changes in the government contribute to improving the business climate and making life easier for businessmen, then we’ll support it,” stated the Croatian Chamber of Economy’s Luka Burilović.

Among the first comments on the changes in the government were made by Gordana Deranja, the president of the Croatian Employers’ Association (HUP), she wants to sit tight and wait for another few days, when the first, concrete steps of Croatia’s brand new ministers can be seen.

“It is the right of the prime minister to appoint their people, and I can only say that it’s important for them to be aware of the situation and that there needs to be continuity in the implementation of reforms,” ​​claimed Deranja.

Businessmen haven’t had too much of an issue with the fact that most of Plenković’s newcomers didn’t leave much of an impression at all, and the public didn’t hear their goals – yet. Partly because, according to all the information available, they had been selected at the last minute, and partly because the prime ministers’ approval for all of the important decisions in the work of their respective ministries was an absolute must.

The ”new” Tomislav Tolušić (former state secretary at the Ministry of Agriculture) Marija Vučković, has made it clear that no major changes have been made in her line of work, and that the continuity of the policy led by her boss will be a must. Eventually, as she herself says, it will likely be upgraded, and that is precisely what Mladen Jakopović, the president of the Croatian Chamber of Agriculture, expects of her.

“She is a very meticulous person, who counts all the decimals in their exact details and holds all of the rules and regulations close to her, we’ll all be satisfied,” stated Jakopović, adding that an important phase of negotiations is now underway. Since Vučković was Tolušić’s most trusted person, no major personnel changes are expected within that ministry.

Although the former minister of labour, Marko Pavić, became somewhat unpopular because of his lobbying against the referendum initiative “67 is too much” (a retirement age issue) and Josip Aladrović is a supporter of pension reform, he has not yet wanted to be open about his position, but has asked to wait for the votes to be counted and verified in order to ”do what will be essential for pension reform in future”.

Petar Lovrić, president of the Association of Independent Businessmen and Employers, announced that he will immediately request a meeting with the new minister of labour to discuss not only the bad management of the pension system, but also the need for relief for employers when it comes to the burden of sickness, because it is absurd that employers need to pay for health insurance and sick pay.

The former minister had no desire whatsoever to listen to that issue. Lovrić believes that a short-term solution to the problem would be to put the current finance minister in the position of vice president for the economy because he highly values Zdravko Marić, but in the long run, he says this isn’t the best solution, because the finance minister is primarily concerned with the budget and should therefore strive for the stronger authority of the economy minister.

Mario Banožić didn’t really make how he intends the state property ministry clear in his recent statement. When he sees the analysis, he says, then he’ll know more. Mladen Pejnović considers that the ministry’s focus on property had been wrong up until now, and that the enterprises were unfairly neglected.

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