The European Commission has warned Croatia that it has not eradicated corruption and that it should reform the system of public salaries, stimulate a longer working life and bring order in healthcare, Jutarnji List daily reported on Sunday.

Fighting corruption, notably locally and in public companies, reforming the public pay system, reducing healthcare budget risks, stimulating a longer working life and improving the welfare system are the main reform measures totally lacking in Croatia, the Commission said in its annual review of progress made in public policy measures to correct macroeconomic imbalances, the daily reported.

The review was made at the end of November and covers the period until November 5.

Aside from those measures, the Commission demands that Croatia intensifies efforts in reforms which are at a standstill, stagnating or not being implemented energetically enough, such as strengthening fiscal responsibility, modernising public administration, improving the state assets management, privatising state assets, reforming regulated professions, reducing parafiscal levies and reducing case backlogs.

As for reforms that are being implemented at an adequate pace, the Commission mentioned the education reform and the regulatory reform.

As a result of the reform shortcomings, the biggest problems of the Croatian economy, despite the measures undertaken on the labour market, are a low active population rate and low productivity growth.

In the period between 2015 and 2017, Croatia grew above the potential growth and since then the economy has grown somewhat in line with its capacity, with GDP in 2019 reaching the level of 2008, Jutarnji said, adding that unless the necessary reforms are launched, the economy will grow below its potential as of 2021.