Although much was expected from the Economic Cooperation Funds (FGS) at the beginning of the crisis, there have been no visible results to date.
There have been no major and important news about their attempts to revive the economy since entering the recession, and they have somewhat fallen into oblivion. Today, more than three years later, FGS are mentioned again. They should be linked to the rescue of shipyards, participate in the restructuring of construction companies, etc. However, judging by their activity, they have turned to the financial sector.
Alternative Private Equity announced last week that it has decided to recapitalize Varaždin’s Vaba Bank. This spring, the fund did the same at Centar Bank. Now, the integration of these banks can be expected. This is part of the project to consolidate small banks, which, as stated by Alternative Private Equity, will strengthen these banks. Although it seems that FGS have invested in a safe project, as banks in Croatia still provide a good return on investment, which is understandable since FGS need to earn eight percent per year, this may not be the case.
If Finance Minister Slavko Linić’s intention to merge seven small banks (namely Centar Bank, Karlovačka Bank, Navi, Croatia Bank, Vaba, Jadranska, and Banca Kovanica) is implemented, a medium-sized bank will be established with a capital of approximately one billion kuna. The establishment of a bank that will be oriented towards small and medium-sized enterprises can somewhat influence the development of the economy, especially since small and medium-sized enterprises are the majority of clients of these banks. If FGS integrate their funds, a long-term sustainable model of survival can be created, economists claim. Finance Minister Slavko Linić announced last week at the presentation of the budget for 2013 before representatives of economic chambers from German-speaking areas and representatives of local companies that the focus will be on rescuing construction companies. Since FGS have enough uninvested money, they appear to be one of the possible partners in the attempt to stabilize Ingra, Konstruktor, Dalekovod…
– Dalekovod is interesting to us, but not other companies – says Tomislav Marinac from Alternative Private Equity.
As can be learned, the Nexus fund concludes the same. What will happen to other former flagships of the construction sector remains with the state. After all, they also grew on state support
