ZAGREB, September 23, 2018 – Prime Minister and HDZ leader Andrej Plenković said on Saturday that his government’s policy focused on fiscal consolidation, structural reforms and investment, adding that structural reforms were being implemented and that claims that reforms were not being carried out should be ignored.
“Structural reforms are being implemented, do not fall for stories that there are no reforms… Only on the basis of fiscal consolidation, structural reforms and investments – on which we need to work on the most – will we be able to ensure further economic growth,” Plenković said on the margins of a conference on Croatia’s investment potential, organised by the Croatian Statehood Foundation and the Konrad Adenauer Foundation in Osijek.
Plenković said he was glad that one of the three leading global rating agencies, Standard&Poor’s, has revised its outlook on Croatia from stable to positive, adding that political stability was a precondition for any economic progress or investment planning.
Plenković recalled that in the two years of his government’s term around 4.5 billion kuna had been invested in employment measures, and that the youth unemployment rate had dropped from close to 50% to 23-24%. Last year, after a long time, a budget surplus was recorded and those trends have continued this year, the prime minister said, attributing the results to prudent public finance management.
He expressed confidence that the impact of the planned reduction of the standard 25% VAT rate to 13% for most consumed products would be felt and that retailers would “not be able to ignore it.”
“We have continued with structural reforms in the judiciary, we had 325,000 citizens with blocked bank accounts and have reduced that number by more than 50,000, and the amount owed due to which the accounts were blocked has practically been halved,” he said.
Plenković said that the planned pension reform contained “rational goals” – system sustainability, higher pensions, and non-discrimination of people going into retirement. I believe that the final solutions to be adopted by the parliament will be good and useful, he said.
Asked why people were leaving the country, Plenković said that Croatia joined the EU in July 2013, that some EU countries opened their markets to Croatian workers immediately after that, while some had restrictions in place for some time while today Austria is the only country that has not fully opened its market to Croatian workers. “If what we are witnessing today had been possible… 10 or 15 years ago, the same would have happened, and possibly at a higher rate,” the prime minister said.
He noted that the government had improved investment-related laws but that more work was required on explaining Croatia’s advantages to investors.
Labour costs in Croatia are below the EU average. The cost of an hour’s work in Croatia is two and half times lower than the EU average and 3.2 times lower than in Germany, which is an aspect relevant to investors. We want our wages to be higher, but from investors’ point of view, current wages in Croatia are our comparative advantage, said Plenković.
HDZ secretary-general and Parliament Speaker Gordan Jandroković said that the HDZ was the only serious party in Croatia and the only one capable of dealing with current challenges and problems it had inherited from the previous governments, such as Agrokor, INA and shipyard restructuring.
Speaking of worldview disputes, he said that the HDZ had been and would continue to be a right-of-centre, people’s and Christian Democratic party. “There are political forces and individuals today who keep questioning our identity as Croats and Catholics, wondering if we care enough about Croatia’s interests. Care for Croatia and our traditional values, including family, religion and nation, is part of the HDZ’s platform. I wonder if those who attack us are interested in and have, aside from worldview issues, any programmes related to economy, Croatia’s international position, or the tax, pension or judicial reform,” said Jandroković.
