The Croatian Employers Association (HUP) said on Thursday its members strictly complied with kuna-to-euro conversion rules and had not raised prices, welcoming the government's decision to step up inspections and name those found to be in breach of the regulation.

Prime Minister Andrej Plenkovic made it clear at the cabinet meeting on Thursday that the majority of businesses had done the conversion job properly and that those found to have violated the law should be penalised, which we strongly support, HUP said.

“We are pleased that the government has adopted our position that the entire sector cannot be declared unfair, but that steps should be taken to punish individuals,” the organisation added.

The government called on businesses that had unduly increased prices to restore them to the level as at 31 December, saying that price increases over the introduction of the euro were completely unjustified.

HUP said that the trade sector, which employs nearly 200,000 workers, had invested considerable funds and efforts to adjust to the new currency.

The Euro Adoption Act clearly sets out price conversion rules, all traders have consistently complied with the conversion formula, and no speculations on their part were possible, HUP said.