Prime Minister Andrej Plenkovic on Thursday commented on the recommendations the European Commission (EC) gave to Croatia, saying it was a good thing that the EC had recognised the government's efforts in fiscal consolidation, adding that it is now essential to implement the national reform programme to increase Croatia's economic growth.

Plenkovic’s comments came at the start of the regular government session on Thursday morning.

“It is good that this year we have received fewer recommendations than the year before. This is a sign that we did a good job on the national reform programme. This time, everything that the European Commission recommended has already been included in our plan, which means that we recognised the trends well,” Plenkovic said.

He said that it is exceptionally important that the EC had recognised the efforts the government made in fiscal consolidation, adding that the results achieved have proved to be better than expected. He said that headway was made in managing public debt, which is shrinking faster than in other EU member states. Plenkovic also recalled that last year Croatia had left the Excessive Deficit Procedure (EDP), applied to any EU member state that exceeds the budget deficit ceiling set by EU regulations.

“I believe it is no surprise that in 2017 financial institutions and rating agencies have raised Croatia’s credit rating score for the first time since 2004,” Plenkovic said.

Plenkovic added that it was important to achieve the three priority objectives set in the national reform programme, to strengthen Croatia’s economic growth potential.

In April, the government had sent the EC a 130-page National Reform Programme, containing 59 measures in 11 reform areas. The three key objectives set in the document were improving Croatia’s business competitiveness, connecting the education system with the labour market, and making public finances sustainable.

The EC on Wednesday gave Croatia four recommendations which Zagreb is expected to carry out this year and next, and which are mostly the same as those given in 2017.

These require improving Croatia’s fiscal framework and introducing real estate taxes; measures to discourage early retirement and accelerate the transition towards higher statutory retirement age; improving public administration; and improving corporate governance at state-owned companies.

The recommendations are part of the spring package of the European Semester which the Commission publishes every year in May.

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