Labour Minister, Josip Aladrovic, on Tuesday announced cutting some subsidies for salaries which had been introduced last year to combat the economic fallout of the Covid pandemic, for "sectors which had achieved good business results," state agency Hina reported.

“The situation on the labor market and the overall economy is no longer such that intensive state support is needed. During this entire time we have spent more than 12 billion kuna (€1.6 billion) on supporting our entrepreneurs and their employees. However, in our view, the pool of those who need that support is increasingly shrinking,” Aladrovic told reporters.

Some of those who had been receiving “intensive government help” for 17 months can now – due to the improving economy – continue on their own, Aladrovic added.

“According to all data, business activity has practically reached the (pre-pandemic) 2019 levels, so some parts of the economy no longer need that support,” he said.

Noting that the government would “continue to support all those who need it the most,” Aladrovic also announced that another round of talks would be held with social partners, and that the public would be informed “by the end of the week” as to which sectors this cutting would apply to.

Aladrovic said that businesses who are likely to keep getting subsidies will be those who depend on large gatherings of people, i.e. the event industry, travel agencies, some transport businesses, etc. On the other hand, hospitality industry such as restaurants and bars are likely to be the first to go.

“As a society and as a country we are now moving from a job-keeping stage to a job-creation stage. We have earmarked more than 500 million kuna (€67 million) to invest in creating jobs until the end of this year, as well as nearly 1.5 billion kuna (€200 million) next year,” he said.

(€1 = 7.48 kuna)