December the 15th, 2023 – This week in Croatian politics, the economy minister steps down, another ex minister is accused of embezzlement, and more.
The cITY ASSEMBLY has ADOPTed a NEW DECISION ON INCOME TAX RATES IN ZAGREB
At a recently held late session, the Zagreb City Assembly accepted the decision of Mayor Tomislav Tomašević on the level of annual income tax rates in Zagreb – a lower tax rate of 23.60 percent and a higher tax rate of 35.40 percent. This comes as most of Croatian politics begins tempting voters with promises of wage increases, but the situation is going to be more complex for Zagreb. These tax rates are due to come into effect on January the 1st, 2024.
An amendment to Tomašević’s proposal was submitted by the Club of City Representatives of HDZ and HSLS, but it was not accepted. They proposed that the rate of annual income tax in Zagreb instead of the established maximum of 23.60 percent for the lower tax base up to EUR 50,400 should be 20 percent. The higher tax rate instead of the established maximum of 35.40 percent for the part of the tax base that exceeds the amount of 50,400 euros was proposed at 30 percent.
EX MINISTER GABRIJELA ŽALAC has been SUSPECTED OF EMBEZZLING EU CASH
There hasn’t been a sizeable scandal in Croatian politics for a few days, so it was high time one broke. Former minister Gabrijela Žalac is currently suspected of embezzling EU funds by prosecutors, and she’s not the only one in the unwanted limelight.
The ongoing investigation also includes a former employee of the same ministry Gabrijela Žalac once stood at the helm of. That ex employee is suspected of having taken action to cover the costs of the former minister’s birthday celebration in a restaurant with grants from the Competitiveness and Cohesion Operational Programme, which are EU funds.
The European Public Prosecutor’s Office (EPPO) in Zagreb has launched an investigation against the former minister of the Ministry of Regional Development and EU Funds (MRRFEU), Gabrijela Žalac, who is suspected of ordering that her private expenses in various catering and hospitality establishments be paid for using public money.
The European Prosecutor’s Office states that ex minister Gabrijela Žalac and the aforementioned employee of that same ministry are suspected of abusing their positions and authority. It’s worth mentioning that this investigation follows previous investigations conducted in cooperation with PNUSKOK. It is alleged that during the period from May 2017 to July 2019, Gabrijela Žalac ordered that her private expenses in catering and hospitality facilities be paid for with public money.
The current forecast for iNFLATION IN CROATIa isn’t BAD, and GDP is GROWING
Although inflation in Croatia is currently decreasing more slowly than expected, the forecast is not bad at all. Naturally, some in Croatian politics deem their economic measures to be the thing to thank for that.
inflation and the global tightening of monetary policy, which has been absent for several decades, are the main determinants of market movements that, after last year, have largely characterized this year as well. Regarding this episode of tightening global financing conditions, the governor of the Croatian National Bank (CNB), Boris Vujčić, will say that for the time being, it is passing without any serious upheavals in the domestic market.
He is of the opinion that “the too slight increase in deposit rates for citizens and the increased profitability of banks, which are the neuralgic points of the current financial landscape most often highlighted by the public, is actually a very benign outcome of monetary tightening” which was not guaranteed by anything. Previous experiences, he says, have been exactly the opposite.
A CROATIAN EMBASSY IN NEW ZEALAND is set TO BE ESTABLISHED
The Croatian Minister of Foreign and European Affairs Gordan Grlić Radman paid his official visit to New Zealand with a meeting with the Deputy Prime Minister and Minister of Foreign Affairs of New Zealand, Winston Peters. The ministers agreed that relations between Croatia and New Zealand are very good and friendly, and the main link is the significant and influential Croatian community. Another important point is the plan for establishing a Croatian Embassy in New Zealand, important for Croatian politics and for the Croatian diaspora in that far-flung country.
As stated in the official press release of the Croatian Minisitry of Foreign and European Affairs, the Croats are the only immigrant people who received the tribal name Tarara due to their connection with the Maori people and the fact that there are more than 100 thousand people of Croatian origin in New Zealand. The ministers discussed the geopolitical consequences of Russian aggression against Ukraine, the situation in the Middle East, as well as the area of Southeastern Europe. New Zealand’s support for Croatia’s accession to the OECD was also expressed. The ministers also discussed the announcement of Croatia’s inclusion in next year’s negotiation plan on the Double Taxation Avoidance Agreement.
There are tALKS OF a CROATIA-AUSTRALIA DOUBLE TAXATION AVOIDANCE AGREEMENT
Minister of Foreign and European Affairs Gordan Grlić Radman had a bilateral meeting with the Minister of Foreign Affairs of Australia, Senator Penny Wong, in Canberra on December the 4th, 2023. Among other important points, there was talk about a Croatia-Australia double taxation avoidance agreement.
As stated in the official press release, the ministers highlighted the excellent relations between the two countries and emphasised the importance of the large Australian-Croatian community, which numbers 250 thousand and forms the strongest bridge of cooperation between the two countries.
They agreed that there is progress in strengthening economic cooperation, especially welcoming the return of a record number of Australian visitors to Croatia with approximately 220 thousand tourists in the first ten months of 2023. Minister Grlić Radman emphasized the importance of the partnership between NATO and Australia, as one of the Alliance’s key global partners, which above all contributes to the understanding of security issues in the Indo-Pacific region.
Discussing EU-Australia cooperation, the ministers agreed that strong cooperation is key to solving global challenges and that there is a need to maintain intensive dialogue and cooperation in various fields, in order to preserve and advance common interests.
NATHALIE RAYES has been appointed THE NEW US AMBASSADOR TO CROATIA
The Senate confirmed the appointment of Nathalie Rayes to the position of US Ambassador to Croatia recently.
All Democratic senators voted for the influential Democrat of Latin American origin, and Republicans Lisa Murkowski from the state of Alaska and Susan Collins from the state of Maine joined them. 47 Republican senators were against it.
Nathalie Rayes was otherwise born in Venezuela, but raised and educated in the US state of California. President Joe Biden nominated her to the position of leading American diplomat in the Republic of Croatia back in May of this year.
In the explanation of this nomination, the White House stated that 48-year-old Nathalie Rayes has enjoyed a long and successful career in numerous leading positions in the field of international politics, cultural exchange, strengthening civil society, media and public relations (PR).
Davor Filipović steps down from his position as Economy Minister
As Nacional reports, after Prime Minister Andrej Plenković dismissed him from his now former position of Minister of Economy and Sustainable Development, Davor Filipović decided to address the public. Like most in Croatian politics who have been ousted, he announced a press conference.
It’s worth briefly recapping the fact that Plenković dismissed Filipović on Tuesday, and Jurica Lovrinčević also then ceased to be a special adviser within Filipović’s cabinet. Filipović’s dismissal came after Nacional published transcripts from which it can be read that Filipović’s special adviser Lovrinčević offered the local Zagreb television network Mreža TV to lease advertising space from a number of state-owned companies and institutions. In return, he demanded that he be paid half of the money made from that transaction.
Nacional then published audio recordings of the conversation between Lovrinčević and a journalist from Mreža TV, which were, as you might imagine, rather damning for Croatian politics.
“It’s now my turn to address you. When I initially entered the political arena, I knew it wouldn’t be easy, but above all, I’m proud that I had the opportunity to serve my country as a member of the government. Croatia is growing and developing, the Croatian economy is the fastest growing economy in the EU, despite all the negative things everyone tries to say about it,” said Filipović at the beginning of his press conference.
“For the last few years, Croatia has enjoyed record foreign investments, and that’s very important. I must point out that I’m proud to have participated in all these projects. All the things I’ve listed affect the increase of people’s standards and, most importantly, these are the things that will remain in place. Regarding this situation, what I will say that it’s my duty not to be a burden to the government and on HDZ. Most importantly of all, it’s my duty to not be a burden on Croatia, the country I served as a minister, and in the future I’ll serve as a professor at the Faculty of Economics”, he added.
“As for the media headlines, the communication to the journalist and the media outlet in question, as well as the messages that were published, I knew nothing about any of it, but nevertheless, I have to take political responsibility for it.
I need to address the headlines about my adviser from yesterday, Mr. Lovrinčević. He is one of the wealthiest and most accomplished people in our country. He spent his entire life working within the economy and on the market. The notion that he engaged in alleged petty “deals” and that he was asking for money… that sounds illogical to me and I don’t believe it at all. I’m taking responsibility for the situation because nobody is more important than the state. In no way do I want to jeopardise all the good that I’m leaving behind me within the Economy Ministry and the government itself. It was an honour to be able to serve the Croatian Government, the Croatian state and everyone in this country. I want to thank all my colleagues, the government, state employees and all journalists for their cooperation and wish them all the best in their future endeavours,” he stated.