Total state subsidies awarded in 2011 amounted to 9 billion kuna, or 3 percent less than in 2010, and estimates for this year, of around 8.3 billion kuna, indicate a continuation of the positive trend of their reduction, said Olgica Spevec, Chairwoman of the Competition Council, at today’s press conference of the Competition Protection Agency (AZTN).
Presenting data from the Annual Report on subsidies in 2011, Spevec highlighted that last year, compared to 2010, the share of state subsidies in GDP was also reduced, from 2.85 to 2.7 percent, as well as the amount of state subsidies per capita – by 3 percent, to 2,045.7 kuna.
However, data from that report show that the reduction in the total amount of state subsidies occurred mainly under the influence of 8 percent lower subsidies to the economy (3.47 billion kuna), while subsidies for agriculture and fisheries, which have been continuously increasing since 2003, were increased by 3 percent last year, to 4.12 billion kuna. Subsidies for the transport sector were also 8 percent lower than in 2010, amounting to 1.4 billion kuna.
Spevec pointed out that subsidies to the economy were mainly awarded for the survival of struggling entrepreneurs, rather than to ‘good’ entrepreneurs to become even better, as is done by most EU member states, thereby helping direct competitors of Croatian exporters.
The bulk of total subsidies, nearly 77 percent, was paid out last year through grants, i.e., direct transfers from state and local budgets, followed by guarantees (12.4 percent), as the most common form of assistance in shipbuilding and transport. Tax exemptions (9.5 percent) also have a significant share, but, Spevec said, they were not often utilized due to the crisis, as these subsidies are tied to the profits of entrepreneurs.
