The Croatian Employers' Association (HUP) on Friday called on the government to adopt a new aid package for the enterprise sector on account of an enormous rise in energy prices.

Employers are recommending four measures – to limit the price of electricity to up to €150 per megawatt-hour for all economic operators from 1 August this year to 31 December 2023; suspend from 1 August 2022 to 31 December 2023, or permanently reduce grid use charges and excise taxes; temporarily reduce charges for renewable energy sources; and reduce the income tax base by the amount of the increase in the cost of electricity for businesses compared with 2021.

“Despite the further rise in energy prices and the deteriorating state of the economy, Croatia has still not expanded its initial package of measures adopted in February, especially in regards to significant increases in prices of electricity, which is the primary source of energy for the majority of enterprises,” HUP said.

It added that the enterprise sector expects further government interventions because it cannot cope with further increases in energy prices on its own any more.

Employers warned that failure by the government to mitigate the rise in electricity prices would jeopardise not only the operation of individual companies but also the growth of the entire economy.

“Without the government’s intervention, enterprises will be compelled to considerably increase the prices of their products and services, which, in the present circumstances of galloping inflation, will have an additional and significant impact on the general inflation rate,” HUP said, noting that the measures they are recommending do not require any direct allocations from the budget.

The enterprise sector is willing to invest in energy efficiency and renewable energy sources, but the government needs to change the present legislative framework to make it stimulating enough for companies, HUP said.