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Gas soon in Split By 2007, Plinacro invested €210 million in the development of the Croatian transport system

Luka Miličić, Dalekovod Group We have never been more present and more successful abroad, promoting Croatian expertise and products

IMF - why not? As soon as the next government takes over it must take measures to stop the rise in public debt



ANALYSIS PAGE 6 2008 2009 2010 2011

Croatian Business & Finance Weekly Established in 1953 Monday / 14th November / 2011 Year V / No 0174




pvinternational pv international C R O A T I A N





Another year of uncertainty Economists participating at the Opatija conference offered a broad range of solutions: from creating a bank encouraging small and medium-sized companies, to slashing public spending and invitations to create a sustainable development strategy Igor Vukić iscal consolidation, the balancing of budget revenue and expenditure and the encouragement of investment and production were the focal topics of discussions at the Opatija conference organised by the Croatian Association of Economists. Economists participating at the conference offered a wide range of solutions: from creating a bank encouraging small and medium-sized companies, to slashing public spending and invitations to create a sustainable development strategy, having considered global economic challenges, particularly instability in the Eurozone which could result in a new crisis for Croatia. All participants emphasised serious challenges and were unable to express positive expectations for 2012. Ljubo Jurčić, the President of the Croatian Association of Economists, outlined the crucial elements in the current situation. Croatian expenditure has exceeded revenue and, consequently, public spending slashes are imperative in order to be able to pay off indebtedness. Jurčić proposed the creation of a clear industrial policy which would encourage production and enable €5 billion of foreign debt to be paid scheduling in 2012.


The Prime Minister, Jadranka Kosor pointed out three pillars of her proposals for economic policy in the forthcoming period: comprehensive savings, a deficit reduction to 2.6% of GDP in the forthcoming two years and removal of investment barriers to foster economic growth, without the introduction of new taxes. In addition, employment of a young workforce will be encouraged with their exemption from pension fund payments during the first years in employment. The Prime Minister believes that a savings plan and balancing the budget could be implemented

without assistance from foreign financial institutions such as IMF. She is relying on strong support from European funding. For every €1 paid into the European budget, Croatia can receive €3 if programmes are adequately elaborated. Preservation of the credit rating Preserving the credit rating and reducing the deficit by one quarter (€0.60 billion to €0.68 billion) are the priorities also for Branko Grčić, Professor at the Faculty of Economics in Split. Deficit reduction, reindustrialisation, an

active employment policy and structural reforms are the desirable targets for the new government, according to him. Željko Lovrinčević, scientist at the Institute of Economics, believes flexible labour legislation and labour law amendments will have to be addressed further, since collective agreements in the public sector are unsustainable. The failure to effectively address these issues will result in a negative impact on the Croatian credit rating at the end of the first quarter of 2012 with severe consequences. Investment from the private sector is imperative, as the public sector is currently overburdened, concluded Lovrinčević. According to Tihomir Domazet, President of the Croatian Institute for Finance and Accounting, economic policy in the forthcoming period should focus on fiscal incentives allocated for local production and employment. National savings should exceed investment, whilst investment must be a consequence of professional analyses and not merely of political decisions. The economists participating at the conference traditionally addressed various areas of the Croatian economy, concluding that all those participating in the market will witness another year of uncertainty.


Privredni vjesnik Year V No 0174

Tomislav Galović, Kulin Owner, Director and Vice President, ORIGIN

Protected against counterfeit products Customers must be fully informed on the product and our product labels guarantee product traceability

y term of office as a Vice President has been extended at the ORIGIN conference recently held in Mexico and organised by Teguila. In addition, Croatian products with the Protected Designation of Origin (PDO) label, as well as those that will again be labelled as such, following the repeat procedure, have received further recognition. Interestingly, Teguila, a world famous brand, was protected by the Slavonian Kulin Galović just a year ago. The procedure of product traceability and obtaining the Protected Designation of Origin label needed to be repeated by producers as a consequence of the comprehensive co-ordination of the Croatian legislative system with EU legislation. Subsequently, we had to repeat and undergo a complex protection procedure. Four products have undergone the protection procedure thus far: Slavonian kulin (a type of flavoured sausage made of minced pork), Pag cheese (cheese from the island of Pag), Istrian pro-


IMPRESSUM: Privredni vjesnik Kačićeva 9 10000 Zagreb +385 1 5600020 subscription

sciutto ham and Varaždin pickled cabbage. Five more producers, holding the PDO label thus far, are currently undergoing the procedure. According to European legislation, producers need to submit a comprehensive development plan and undergo a broad range of procedures to obtain the PDO label. I am convinced that all producers, holders of protection labels thus far, will successfully comply with European legislation. In addition, protected products have a higher value on the European market. Consequently the prices of French protected cheeses exceed the prices of cheeses without protection labels by 50%. Many customers in the European market opt for product origin information and production cycle traceability from field to table and are willing to accept higher prices. Customers must be fully informed on the products they purchase and our product labels guarantee production traceability. There are three crucial requirements that must be met: the first is production in a specific area, secondly that the products are typical and thirdly that they are produced in the traditional manner. Slavonian kulin produced by my company, for example, is produced solely in winter, irrespective of favourable working conditions in my company throughout the year. Product protection is imperative in order to eradicate counterfeiting. ORIGIN is significantly involved in this issue and we often warn of counterfeiting in fast growing markets such as Brazil, India, Russia and China.

FOR PUBLISHER Nikola Baučić +385 1 4846661

IMC MANAGER Dea Olup +385 1 5600028

EDITOR IN CHIEF Darko Buković +385 1 5600003

TRANSLATION Lučana Banek Mirjana Cibulka

EXECUTIVE EDITORS Andrea Marić Vesna Antonić


( €380 million

invested in second cycle of Plan 2007-2011


Gas soon

By 2007, Plinacro invested €210 million in the developmen to finalise the construction of 2,775 kilometres of pipelines Boris Odorčić he national operator of gas transport system Plinacro has implemented all investment projects in the Plan for Development, Construction and Modernisation of the Gas Transport System in Croatia according to the planned schedule. Jerko Jelić Balta, Director of Plinacro, pointed out that the second cycle of the Plan 2007-2011 is approaching completion. They have invested €380 million in the construction of transnational and regional gas lines as well as in


The backbone of this system is the transnational gas line Bosiljevo-Split, 292 kilometres long, whose route is divided into four legs, of which the first three have already been commissioned the measuring-reduction stations in conjunction with the Plan. At the end of 2009 the construction work on the 73 kilometre long pipeline Vodnjan-Umag was finished, which enabled the complete gasification of Istria. However, the most important Plinacro project was the construction of the interconnection gas line linking Croatia and Hungary. Its commissioning gave Croatia its second supply route for natural gas after having had only one interconnection with Slovenia for over 30 years. It was built as a unique gas line with a capacity of 6.5 billion m³ per year, says the CEO of Plinacro.

The construction of the gas line system in Lika and Dalmatia, from Bosiljevo to Split, has continued. The backbone of this system is the transnational gas line Bosiljevo-Split, 292 kilometres long, whose route is divided into four legs, of which the first three have already been commissioned, whilst the final one (Benkovac – Split, 90 kilometres long), will be finished in 2012. Big projects Jelić-Balta stresses that Plinacro invested €210 million into the development of the Croatian gas transport system in 2007. By the end of 2014 it will have invested Business & Finance Weekly


( 5.5 billion m³

gas to be transported every year by end 2014

in Split t of the Croatian transport system. By the end of 2014, it will have invested another €370 million gas line which would connect with the system for Lika and Dalmatia with the Trans Adriatic Pipeline (TAP) project in Albania by finishing the construction from Split towards Ploče and across Montenegro. This is a strategic project which will open a new energy corridor in SEE with the purpose of establishing a new supply route of natural gas from a new source – the Caspian and Middle East region, he explains. The Ionian-Adriatic Pipeline will have a two-way gas flow, enabling a supply to the SEE with natural gas from other sources, especially the future LNG unit on the island of Krk. The LNG RV project concerns the construction of a docking facility for LNG ships with a unit for gasification and its connection with the gas transport system in Croatia. Designed in order to bridge the natural gas supply until the end of the construction and commissioning of the classic LNG terminal, which should be constructed in another €370 million to finalise the construction of 2,775 kilometres of national and regional gas lines. This will enable the transport of 1.2 million m³ of gas per hour, or 5.5 billion m³ of gas per year, satisfying the needs of all consumers. Simultaneously, in compliance with the implementation of the Strategy of Croatian Energy Development and in order to diversify routes and supply sources of natural gas, Plinacro will continue with its forceful completion of the development of big projects, such as the South Stream Route, the LNG terminal, the Ionian Adriatic Pipeline as well as the connection with gas

supply systems of neighbouring countries, and all this so that the government can make final decisions in compliance with national interests. In other words, he ventures, the importance and seriousness of their development plans relating to big projects are supported by the fact the EU approved €4.68 million to Plinacro in non-refundable financing for preparation activities of three development projects - the Ionian Adriatic Pipeline (IAP), LNG RV (Regasification Vessels) and LNG, evacuation pipeline Omišalj-Zlobin-Rupa. The finalisation of IAP relates to a

We are aware of the enormous work ahead of us, that is, the development of a local grid. The dynamics of gasification will depend on it Omišalj on Krk, LNG RV does not exclude the Adria LNG project, developed by a foreign consortium. It merely represents a simpler and faster transitional solution until a final decision is made on the construction of the Adria LNG project. The applica-

tion of LNG RV technology will secure Croatia a new gas supply route, open the possibility for transit and serve as insurance of an additional gas supply, considering such ships contain tanks for liquid natural gas. Local grid development Since the development of the distribution gas system and the gasification of end-users within the regional and local administrations, this aspect rarely keeps up with the dynamics of Plinacro’s activities. After finishing the construction and having commissioned the third part of the pipeline system for Lika and Dalmatia, from Gospić to Benkovac, including the separating pipelines for Zadar and Biograd, no-one can dispute the fact that natural gas has arrived in Dalmatia and that it is available as far as Plinacro is concerned. However, we are aware of the enormous work ahead of us, that is, the development of a local grid. The dynamics of gasification will depend on it, and we believe the first users will soon be connected in Zadar, Biograd and Benkovac. This is gasification in its essence. The same applies to Split. By the middle of next year, Plinacro will certainly complete the construction of the pipeline to Split as well as all necessary infrastructure. Thereafter, everything is in the hands of distributors, he points out. In Karlovac county and Lika and Senj, the development of the distribution systems is much behind schedule, and despite the constructed main route system, the use of natural gas is still not possible in Lika and a large part of the Karlovac region.



( €90 million

amount of recently contracted racted work abroad


In anticipation of €100 million of contracted work We have never been more present and more successful abroad, promoting Croatian expertise and products. Nevertheless, all our effort is insufficient to substitute for the current lack of local market operations tremely lengthy. The situation is paradoxical: we have never been more present and more successful abroad, promoting Croatian expertise and products. Nevertheless, all this effort has been insufficient to replace that lost from the local market.

Jasminka Filipas alekovod was founded in 1949 and has since developed as a construction and provision of services company to the energy sector, primarily in South Eastern Europe and, during the last decade, also throughout Western Europe. In addition, they have achieved excellent results in projects regarding equipping road, rail and telecommunications infrastructure during periods of intense state investment. The company also provides construction design services produces metal constructions, hanger and joint equipment primarily for international markets, ranking as the fifth largest in Europe in that area. The Dalekovod Group comprises of the parent company and 27 affiliated companies, plus 10 subsidiaries. Privredni vjesnik talked with Luka Miličić, Dalekovod Board President about the seri-


ous losses incurred by the company during the first six months as well as the recently contracted lucrative work abroad. The company incurred around €5.3 million in losses during the first six months. Was this due primarily to the economic crisis? It would be unfair, insincere and unprofessional to claim that the economic crisis, which has mercilessly impacted upon the whole of Europe and consequently also Croatia, was the primary cause of huge business losses. An old Jewish proverb says: ‘Save while you can’. Dalekovod failed to do that during its golden period from 2006 to 2009, thus further contributing to the current unsatisfactory situation. Thus, in 2010 we made a decision to restructure and implemented it during the first quarter of this year. The results are evident: we were primarily refinanced by pension funds (€13.5

million) with these funds being allocated for investment into renewable energy sources. We separated production and allocated it to one subsidiary, merged construction and engineering within the parent company, we offered our non-core assets for sale on the market and proceeded to invest into renewable energy sources. Has the economic crisis equally impacted on local and foreign markets? We have been faced with the consequences of an absence in the local market for two years. It would not be a problem if we were not able to compete in that market. The real problem is the fact that there is no work and there are no tenders. It is impossible for us to replace the sudden disappearance of a whole business sector, particularly in those areas of our operations where tendering processes, bid processing and contracting work are ex-

You have recently contracted new work with Slovenia and Norway, which has positively impacted on your share price. Our experience has been completely different: there seem to be absolutely no correlation between lucrative work, locally or abroad, and share price movements in the market. Consequently, when the news about our contract for the construction of the Srđ transformer station in Dubrovnik was announced, our share price decreased. I am pleased to be able to state that we will do our new work relying solely on our own employees. The work in Slovenia will be completed in 2012, whilst the completion of work in Norway will take three years due to difficult climate conditions and short construction season. These are markets with high quality standards, protection at work and environmental protection with which we have successfully complied thus far. Subsequently, I am convinced that we will be able to successfully meet new challenges. Are you anticipating new contracts in these markets? We are expecting new foreign contracts worth around €100 million. Nevertheless, we currently prefer not to specify neither the projects nor the countries. Business & Finance Weekly


( 0.68% of GDP

allocated to research and development (EU average is 10%) %)


Uncertainties about the level of corporate investment into lifelong learning In Croatia investment in science, education, research and development includes premises maintenance, equipment expenditure and salaries Jasminka Filipas unds allocated to science and education in Croatia decreased from 4.55% in 2009 to 4.38% of GDP in 2010, whilst funds allocated for research and development shrank from 0.69% to 0.68% of GDP. Investment in these economic aspects within Europe is double or higher: the EU average investment in science and education stands at 8.5% of GDP, whilst an average of around 3% of GDP is allocated to research and development. In addition, most countries development budgets have seen an increase of around 10% or more this year, in search of a more rapid exit from the crisis. Just 2.3% of the Croatian population is involved in lifelong learning, whilst the European average stands at around 27% and at a remarkable 30% in Scandinavian countries. According to Vesna Ĺ tefica, Assistant Director at the Human Resource Development Centre at the Croatian Chamber of Economy, commenting on data presented at the 9th International confer-


ence Educa Plus, the additional problem of the Croatian budget is the fact that both science and education and research and development aspects in Croatia include the costs of premises maintenance, equipment expenditure, salaries and other similar items, whilst the real investment amount allocated for education development is uncertain. “I believe that redistribution of funds would contribute to their more effective use and, in my opinion, many issues could be addressed merely by the willingness to change and improve the situation without the use of additional funding�, she pointed out. She did not adhere to the stance that lifelong learning in Croatia depends on personal ability to invest in additional development, since, according to her, a significant number of companies invest in their staff. The problem is statistics, which are not up-to-date and the real figures always trend lower than they currently are. Costly statistics There is statistical data merely regarding formal education, but

none on the funds allocated by companies for language courses for their employees or for IT programmes. The Croatian Chamber of Economy has closely monitored the socially responsible business activity programme and concluded that companies have budgets for employee training and that they are used; nevertheless it is difficult to estimate total costs, whilst statistics on additional employee training is costly. On the other hand, the quality many lifelong learning programmes are in compliance with the European standards. The Croatian Chamber of Economy and the Association for Foreign Languages have been warning all schools to operate in compliance with the Common European Framework of Reference and it has been implemented to a large extent in schools in Croatia. Nevertheless, compliance with the Common European Framework of Reference is voluntary and it is consequently advisable to search for information on individual schools at the Croatian Chamber of Economy who can provide

reliable information on schools and their curricula. Company and institution networking Informing and networking between companies, institutions and organisations in Human Resources was the focal topic of the two day conference. Participants were advised about the Croatian qualification framework which is to be adopted in the future, on the importance of lifelong learning, best practices for attracting and retaining talent, socially responsible business activities and similar. Zdenka Peternel, the Director of the Human Resource Development Centre at the Croatian Chamber of Economy, emphasised that raising the awareness of embracing the lifelong learning process and focusing on human resource development amongst business people is the mission of the Centre. She stated that the Croatian Chamber of Economy has been warning of insufficient involvement of economic and educational aspects in student internship programmes, which needs to be thoroughly addressed.


Privredni vjesnik Year V No 0174




Kuna exchange mid-rate


5,572408 5,376281 7,100037 6,053262 8,742973 5,495088 7,484859




















7.483 7.11.


::: news








6.04 7.11.






Higher public savings Total deposits of banks showed a mild increase in September, according to data of the CNB indicated in a RBA analysis. They totalled €30.01 billion, which is 0.2% more compared with the end of August. This result was contributed by growth in kuna and foreign savings and term deposits, whereas deposits decreased. Public deposits totalled €19.76 billion at the end of September, which is 4.2% more compared with the end of 2010. Corporate deposits decreased by 2.4% in relation to 2010, totalling €3.98 billion. Erste Bank growth Erste Bank increased its assets by €0.68 billion during the first nine months of this year, to €7.5 billion. Total lending reached €5.13 billion, almost 10% up over 2010. Deposits increased to €4.38 billion. Nett profit came in at €62.59 million, around €1.08 million up over 2010. Market share in loans increased from 13.3% to 14.1%. In terms of corporate lending, Erste increased market share in the same period, from 13.1% to 14.3%. Purchasing power of €5,011 The average purchasing power of the Croatian public stands at €5,011 per year, which puts the country at 31 of 42 countries according to the Gfk survey. Last year, Croatia ranked 29, and in 2009 at 27. Zagreb has the highest purchasing power, with an average of €6,507 per capita followed by Istria. The public with the lowest purchasing power is the area around the border with B&H and Serbia. The European average purchasing power is €12,774, some €800 more than in 2010.

IMF - why not? As soon as the next government takes over it must take measures to stop the rise in public debt Boris Odorčić do not expect any serious inflationary pressures since local demand is under control, the current account deficit in relation to foreign countries is almost closed and there are no signs of wage pressures. Hence there will be no serious inflation for now, according to Velimir Šonje, director of Arhivanalitika. The situation in Croatia is very much different to that in Greece, continues the economic analyst. Indebtedness is lower and is the deficit. The Greek scenario is, however, a warning that something that could happen if such a policy continues over a longer period. This is the direct message: as soon as the next government takes over it must take measures to stop the rise of the public debt.


It could be said there is still time for that, but not a lot. This means that we will see during the first months what kind of approach the new government will take, underlines Šonje. There is little encouragement in the fact that both the leading parties put fiscal stability first in their programmes. Banking sector stability No one thinks that it is possible to carry on if this does not change, highlights Šonje, adding he has nothing against receiving help from the International Monetary Fund. Why not, if it could strengthen the credibility of fiscal adjustment which should be implemented anyway? Furthermore, Šonje pointed out during the presentation of the HUB analysis ‘When states go bankrupt’ that whilst the con-

struction of a new structure for the financial stability of the Eurozone is an imperative, the banking sector in Croatia is stable albeit isolated. Moreover, the fundamental problems of Croatia are not so different from those in Europe. A lack of competitiveness, inefficient and an oversized public sector with high expenses, whose public debt growing continuously, have all suffocated economic growth and employment. Since Croatia will soon become a member of the EU, which is on the verge of another recession and fighting for financial stability, some elements, such as a unique market, monetary union and easier access to capital will not have the same appeal as for countries in past enlargement cycles. Business & Finance Weekly




Pet friendly We aim to provide a comfortable shopping experience and integrate pet care into the daily rhythm

Experts in modern economics Students take courses in economics, law, information and other course of value for EU accession he Minerva College was founded in 2007. This year the fifth generation was enrolled, around 150 students from throughout Croatia as well as some from abroad. The college uses an interdisciplinary approach. During their three years of study, students take courses in economics, law, information and several others relevant to EU accession, such as quality management and information safety systems, points out Zlata Božić Pavletić, owner of Minerva. She ventures that the college is a private investment worth several millions of Euros. Minerva College is an institution that has been granted all public certificates and its degree is recognised by all countries using the Bologna system. In February, 2007, it obtained a licence from the Ministry of Science, Education and Sports for expert studies in information management, and has recently also been granted a permanent licence. This college was established with the purpose of meeting the needs of a growing number of organisations and institutions for educated experts in information systems management and protection, who are not only experts in their field but also have the relevant knowledge levels and developed skills to apply it in other similar fields, such as economics, marketing and


Human Resource Management. Minerva satisfies the need of young people to join contemporary systems of economic, public administration and other users of information systems as well as to build a valuable career. Smaller student groups Smaller student groups are our advantage as well as the fact students acquire initial and fundamental knowledge in various scientific disciplines. The market lacks trained individuals who can work with data bases. In addition to that type of specialisation, we

This college was established with the purpose of meeting the needs of a growing number of organisations and institutions also offer experts with specialised knowledge in financial management, Human Resource Management, project management and information systems design. These courses are in demand in the business world, she adds. The owner of Minerva points out they have a Cambridge licence for teaching business English and next year they plan to organise graduate studies. (J.V.)

oo City has been present in Croatia market since 2008 and has become the largest Croatian retail chain store for pet products. It has created over 70 jobs, without support, primarily due to its own satisfactory development thus far. The company has followed global trends, setting new standards in the Croatian market –stores are located in shopping centres and considering pets as family members. The stores, professionally staffed, are equipped in compliance with the highest standards. In addition, the stores have a veterinary pharmacy and a pet beauty salon. According to Marin Erceg, the company Director, the concept of their shop is unique in Croatia in this market. “We aim to provide a comfortable shopping experience and integrate pet care into daily life”, he pointed out.


Innovative approach The first Zoo City retail centre was opened in Zagreb, followed by stores in Slavonski Brod, Varaždin, Karlovac, Split, Velika Gorica and the latest in Zadar, which is also the largest pet centre in Dalmatia. Currently, the company has 12 branches throughout the country, with just three as individual stores not within shopping centres. “The innovative ap-

proach of comprehensive pet care and a different shopping experience has attracted a lot of market attention. We have identified the emotional tie between people and their pets, which has become the basis of our business activity, expressed in the slogan – ‘For the love of pets’ – stressed Erceg.

The company is planning further retail network expansion in the future “Customer habits in Croatia currently still largely differ from those abroad. In Croatia, customers are not aware of the necessity for a broad range of pet equipment. In addition, there are differences in pet nutrition: the share of industrial pet food in animal diets stands at between 20% and 25%, whilst the EU average is between 50% and 60%, with a remarkable 95% in the US”, he added. According to company estimates, Zoo City’s current total market share in this specialised area stands at between 5% and 10%, which implies ample growth potential. The company is planning further retail network expansion in the future, with particular focus on opening new branches throughout Croatia in towns of over 50,000 inhabitants. (K.S.)


Privredni vjesnik Year V No 0174

Croatian tourism present at WTM

On the wings of good results the future of tourism Croatia prepared again for this year’s European and world promotion and the government has already adopted the Action Plan for Croatian Tourism 2012 Sanja Plješa espite the economic crisis, which had a negative influence on tourism globally, this year tourism countries registered better results. It is also anticipated it will recover even more in 2012, increasing the share of tourist arrivals by 3.3%. Even though Middle Eastern countries experienced serious political problems this year, Egypt especially, this country managed to achieve tourist results which were only 25% down in relation to 2010, according to their ministry at a conference held in conjunction with the World Trade Market in London. At this most significant tourist fair, where deals are made for the next tourism season, the Croatian tourist programme was presented. Amongst other things, it was pointed out that by 2030 1.5 billion Chinese and Indians will become middle-class with more money and possibilities to travel around the world. Croatia has already teamed up with Slovenia, and we will soon co-operate with other regional countries in order to approach the more remote markets together, said State Secretary for Tourism, Željko Lenart. He added that since Croatia prepared on time for this year’s European and world


promotion, the government had already adopted the Action Plan for Croatian Tourism 2012 with 13 groups of measures for both local and international markets. Young tourist destination In conjunction with the WTM, the traditional meeting with touroperators was also held. This occasion was used to point out that this year the biggest British tour-operators achieved sales at last year’s level or even slightly higher for Croatian tourist packages. Croatia was recognised as a quality tourism destination, but it is still a young tourist destination which may never reach the level of Spain or Turkey. Next year,

Egypt and Tunisia might cause problems since they additionally cut prices, taking a more aggressive approach to the market. Even though the British like Croatia, they still resent the fact that people are insufficiently diligent and rarely smile, pointed out Igor Vrtikapa of Inghams, a British tour operator. He ventured the sales of tourist packages to Croatian destinations for 2012 will remain at last year’s level, but that it is still too early to discuss end results. Aleksandra Pukšar from Kompas tourist agency agrees that Croatia enjoys a good reputation globally. Kompas’ venue at WTM was visited by British and Americans who were mainly interested in

cruising and travel packages which include Croatia and neighbouring countries. Perhaps the right ratio of value for money in our country is actually now, and visitors are used to more favourable prices of packages, said Aleksandra Pukšar. Concerning foreign partners, there are currently no signs things might deteriorate. It is thus anticipated the trend of positive results will continue in 2012. Croatia has a record tourist season behind her, pointed out Boris Žgomba, president of the Croatian Travel Agencies Association. According to Žgomba, these successful results helped leave a good impression at the WTM.

payment of bank loans for current business expenditure during a six month period of financial recovery, expiring 20th April 2012. The Institute of Immunology cannot be granted further support over the forthcoming 10 years.

ing to the American Chamber of Commerce, it could be implemented through the introduction of a legally binding ‘tax opinion’ submitted by the central tax authority, since currently, local tax authorities submit differing opinions on identical issues. In addition, it proposes the separation of tax surveillance from VAT refund, in order for VAT refunds to be carried out within the 30 day legal deadline, as opposed to the current situation in which it can take a year due to tax surveillance issues.

::: news HBOR increases incentives for construction The Croatian Bank for Reconstruction and Development (HBOR) has presented new export incentives for the construction industry. A financing programme, a performance bond programme and a guarantee insurance programme have been amended. Financing for the construction of business complexes for rent and of fixed current assets have also been introduced. In addition, the period of use has been extended in compliance with

model ‘A+’. The bank granted €109 million in loans to the construction industry in 2008, whilst from then to the end of October 2011 such loans granted by the bank stood at €0.14 billion. Institute of Immunology support granted The Croatian Competition Agency Council has granted state support in the form of state guarantees totalling €5.84 million to the Institute of Immunology. The guarantees will be used for the

American Chamber of Commerce supporting tax system amendments The American Chamber of Commerce in Croatia has proposed a reduction in the tax burden without lowering tax rates. Accord-

PV International 0174  

PV International - The first weekly newsletter covering the Croatian economy as well as that of the wider region, in English