Croatians can be proud of their achievements in the first three decades of Croatia's independence, in its first 10 years Croatia went through what many countries go through over a much longer period of time, and its memberships in the EU and NATO have stabilised Croatia's international position, Prime Minister Andrej Plenkovic said on Sunday.

“I think we can be proud of… the fact that we have our own state which is internationally recognised, which went through several transitions – from a one-party system to a pluralist democracy, from peace to war, from war to peace, from an economy based on consensus to a market economy… A country which has built its institutions, which, thanks to Croatian defenders, preserved both its freedom and achieved territorial integrity – which also included the statesmanly wisdom of the first president Franjo Tudjman to peacefully reintegrate the Croatian Danube River Region after the victories in the Flash and Storm (military operations),” Plenkovic said in an interview for state broadcaster HRT marking the occasion of Statehood Day, the national holiday celebrated on June 25.

Asked if Croatia today was the kind of country that Croatians dreamed of 27 years ago when it separated from the former Yugoslav federation, he said, “There have been many challenges, difficulties, mistakes, but we are here to resolve them together, and to advance both the country and the society, and to lead it in the right direction, towards development and prosperity, and a better life in the country.”

Asked to comment on public opinion polls which show that a majority of citizens are not happy with the direction that the country is going, Plenkovic said, “There are many expectations… We constantly expect a better time to come, a better life, so it’s understandable that a majority of our people are both impatient and, to a certain extent, dissatisfied.”

“But when one takes a look at what Croatia is achieving right now – thanks to this government, among others – we have got stable finances, a budget surplus, continuous economic growth, higher employment, and positive indicators, from the credit rating upgrade to the general perception of the trend in which we are going,” Plenkovic added.

He said it took “a certain time” for all citizens to feel the effects of that, but that thanks to the tax reform and other economic policy measures, average salaries are now higher, and people have new opportunities, both in Croatia and the EU.

Plenkovic was asked to comment on the announced pension system reform, which envisages raising the retirement age to 67, introducing higher penalties for early retirement, and a potentially stronger second pillar, Plenkovic said that three fundamental things are necessary for it.

“The first is to maintain public finances, the second is to launch investments which will accelerate growth, and the third is to continue with structural reforms, including those in healthcare, improving the business climate, and the financial framework,” Plenkovic said, adding that the pension reform was planned for early September, and that its goals are to ensure higher pensions and maintain the pension system.

He said that 38 billion kuna (€5.1 billion) are spent on pensions every year, with 21 billion kuna (€2.8 billion) coming from contributions of those employed, and “17 billion (€2.3 billion) going for pensions directly from taxes.”

He said the government wanted the pension reform to contribute to better revenues and to keep people longer on the labour market, adding that this was a global trend.

Asked about his recent announcement that VAT would be cut from 25 to 24 percent, and if citizens could expect higher net salaries, Plenkovic said that the tax reform introduced in January 2017 had already resulted in higher salaries for many citizens. He said that upcoming changes to the tax regulations would constitute a second stage of the tax reform, and that VAT was just one part of the tax system.

“We will see what can be done about income tax, about (mandatory) contributions on wages (increasing gross salaries), to see how much room we have to relieve employers, so that workers have higher net salaries, Plenkovic said. “I think we will achieve good effects which won’t endanger the state budget’s revenue, and will contribute to higher growth, higher spending, and… higher salaries.”

He also commented on the Croatian-Slovenian border arbitration dispute, saying it was a major political success that the European Commission had decided not to interfere.

Croatia wants to resolve the border issue with Slovenia in the spirit of good neighbourly relations and agreement, he said, adding that Croatia had offered Slovenia a good and acceptable solution seven or eight months ago.

We will wait for the formation of Slovenia’s new government and then again embark on talks on this topic. I hope we can resolve this issue without going to court, he added.

(€1 = 7.37 kuna)

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