EC recommends investment priorities for Croatia

NEWS 05.06.2019 15:21

The European Commission on Wednesday called on Croatia to focus investments on research and innovation, sustainable urban and railway transport, energy efficiency, renewables and environmental infrastructure in the coming period.

That is one of the four recommendations for Croatia in the Commission’s European Semester 2019 Spring Package which also encompasses specific recommendations for member-states, including Croatia.

The European Commission presents the 2019 country-specific recommendations (CSRs), giving economic policy guidance to all EU Member States for the next 12 to 18 months, and for the first time it also outlined investment recommendations.

Four sets of recommendations for Croatia

As regards Croatia, the first recommendation of the Commission calls for reinforcing the budgetary framework and monitoring of contingent liabilities at central and local level. Croatia is also urged to “reduce the territorial fragmentation of the public administration and streamline the functional distribution of competencies.”

The second recommendation refer to education.

Croatia is advised to “deliver on the education reform and improve both access to education and training at all levels and their quality and labour market relevance.”

The Commission calls on Zagreb to “consolidate social benefits and improve their capacity to reduce poverty.”

This recommendation calls for strengthening labour market measures and institutions and their coordination with social services. In consultation with the social partners, Croatia is supposed to introduce harmonised wage-setting frameworks across the public administration and public services.

In the third recommendation the EC says that investment-related economic policy should focus on research and innovation, sustainable urban and railway transport, energy efficiency, renewables and environmental infrastructure, taking into account regional disparities.

The administration’s capacity should be increased to design and implement public projects and policies.

The fourth set of recommendations relates to the improvement of corporate governance in state-owned enterprises and intensification of the sale of such enterprises and non-productive assets.

The Commission also recommends the enhancement of prevention and sanctioning of corruption, in particular at the local level. Reduce the duration of court proceedings and improve electronic communication in courts.

Croatia is called to “reduce the most burdensome parafiscal charges and excessive product and services market regulation.”

This year the recommendations do not mention discouraging early retirement, accelerating the process of increasing the retirement age and the need to adjust pension provisions for certain categories with general pension eligibility.

The recommendations were made based on an analysis of the two documents which Croatia submitted to the EC in April: National Reform Programme and its 2019 Convergence Programme.

The recommendations are also made based on dialogue with individual member states, their national reform programmes and relevant Eurostat data and finally the recently release Spring Economic Forecast.

The European Semester was introduced in 2011 and provides a framework for the coordination of economic policies across the European Union in an effort to increase resilience to new crises.

As far as the commission’s investment recommendations are concerned, these are considered necessary regardless of whether they will be financed with European or national funds or whether they are related to public or private investments. The commission will also monitor the implementation of the investment recommendations as it has done until now for specific areas.