The Croatian Chamber of Commerce (HGK) said on Wednesday that the government's package of measures for cushioning energy price rises was largely aimed at citizens, and while protecting their purchasing power would have an indirect effect on the economy, it would be insufficient.

It also said the package wouldn’t significantly cushion the impact on businesses.

Prime Minister Andrej Plenkovic on Wednesday unveiled an 4.8 billion kuna (€640 million) package of measures aimed at cushioning the impact of rising energy prices, with the measures including a lowered Value Added Tax (VAT) rate on gas supplies and some agricultural products, subsidised gas prices, one-off discounts on energy bills for pension recipients and other measures.

The HGK welcomed the openness to communication with the Chamber and other associations of entrepreneurs and craftspeople, as well as the effort the government had put into this package of measures, which is at the moment definitely one of the more comprehensive aid packages of this kind at the EU level.

The Chamber expressed confidence that this would continue and the package would be expanded with other necessary measures for businesses which had been put forward in talks so far.

The Chamber also said that in all meetings with the government it had called for introducing the measures as soon as possible. The fact that measures enter into force on 1 April does not cushion the huge increase in costs since December last year, the HGK pointed out, adding that the measures should be retroactive for businesses.

With regard to support for enterprises, the HGK had primarily been advocating subsidies for energy costs and tax relief.

“The government has accepted the proposal that was most important to us, to cover part of the energy costs for entrepreneurs,” the HGK said, noting that a simple application process will be key to micro businesses and SMEs when using the announced coupons.

However, large enterprises and large energy consumers are not covered by the measures, and to them energy accounts for a large share of operating expenses, the HGK warned.

It also pointed out that the issue of the stability of contract prices of gas for industry remained unresolved.

The HGK said that the government had accepted their proposal to limit the growth of electricity fees, and it also welcomed the reduction of VAT aimed at preserving the liquidity of businesses.