Events that Marked the Year 2012 in Croatia

The fourth year of the crisis in Croatia was turbulent for almost all economic actors. The collapse of Credo Bank, a new setup in the Croatian National Bank (HNB), the decline of the construction industry, tax reforms, and Čačić’s resignation are just some of the events that marked the year 2012.

January 3 – Prvomajska Gear and Reducer Factory announced that it has signed a contract with the Egyptian company A.A. Abdelsaim for the delivery and installation of 17 complete CNC lines worth 103.2 million euros.

January 5 – The government extended the validity of the decision limiting the salaries and other income of the presidents and members of the management boards of companies in which the state has a majority stake to a maximum of 3.2 average monthly salaries of employees in legal entities.

January 9 – Atlantic Group reported that, due to a new business organization involving a division into 11 strategic business areas, a new Management Board was appointed, consisting of CEO Emil Tedeschi and board members Mladen Veber, Neven Vranković, and Zoran Stanković, effective January 1.

January 10 – The Supervisory Board of the closed investment fund Quaestus Real Estate revoked Borislav Škegru from the position of president and Tomislav Matić from the position of board member of that fund.

January 10 – The manufacturer of electrical wires and cables Eurocable Group signed export contracts with cable distributors, the Austrian company Meinhart Kabel and the German Faber Kabel, worth 70 million euros.

January 10 – The ships “Orange Star” and “Piana”, built at the Split Shipyard, received a prestigious international recognition as significant ships built in 2011 in the selection of the magazine “The Naval Architect” and its specialized publication “Significant Ships 2011.”

January 11 – A protest was held by 150 workers of Bilokalnik Wood as the Nexe Group, of which the company is a member, requested the closure of Bilokalnik’s production facilities.

January 11 – The company Badel 1862 and the Chinese Tadee Holding Group signed a joint investment agreement to establish a trading company in China for the sale, distribution, and marketing of wines and strong alcoholic beverages from Badel’s production range in the Chinese market.

January 12 – About a hundred workers of Dalmacijavino in the Northern Port protested due to the non-payment of a total of five salaries.

January 16 – The Commercial Court in Split issued a decision to open bankruptcy proceedings against Credo Bank.

January 17 – About a hundred workers of Dioki protested in front of the company’s management building, which has not operated for more than half a year.

January 18 – Ina firmly rejected claims from an article published in a daily newspaper regarding the alleged sale of Ina’s business in Syria.

January 19 – The government accepted a project to review the financial and operational status in a total of 21 ministries, institutes, and public companies, which should be “scrutinized” by June regarding the largest users of budget funds, referred to as a clean start.

January 19 – The completion of works on the reconstruction of the railway section Vinkovci-Tovarnik-state border, which cost a total of 59.5 million euros, was marked at the Vinkovci railway station, financed by state budget funds and non-refundable EU funds from the pre-accession ISPA program with a share of 48 percent.

January 20 – About 200 workers of Dalmacijavino protested in the streets of Split. The last salary for the 440 workers of Dalmacijavino was paid for July 2011.

January 20 – About fifty workers of Jadrankamen from Brač protested in front of the company’s management building in Split.

January 20 – The Croatian Parliament amended the Enforcement Act, correcting an oversight made at the first session of the Parliament when the omission of one article during the amendments to that law opened the possibility for a legal vacuum during which no one could enforce claims for a certain period.

January 20 – The Croatian Parliament amended the Law on Compensation for Providing Services in Mobile Electronic Communication Networks, under which mobile operators will pay a fee of 6 percent on services for the transmission of images, speech, and sound messages, as well as voice services.

January 23 – A general strike was renewed in all work units of Jadrankamen, whose headquarters is in Pučišća on Brač, as workers are dissatisfied with the actions of the company’s CEO Vedran Vilović.

January 24 – Several hundred workers of Hrvatski Telekom (HT) protested at Ban Jelačić Square against the announced layoffs of 450 HT workers and demanded that the HT Management withdraw the layoffs and that the government not allow blackmailing behavior from multinational companies.

January 24 – The permanent service of the Split Commercial Court in Dubrovnik opened bankruptcy proceedings against Mediteranska plovidba d.d. Korčula.

January 25 – The Croatian Parliament accepted amendments to the Law on the Rights and Duties of Representatives in the Croatian Parliament, which abolish so-called privileged pensions for representatives, Constitutional Court judges, and the state auditor, and from now on, the right to a pension will be achieved like other citizens, according to the Pension Insurance Act.

January 25 – The Croatian Parliament passed amendments to the Law on Preventing Conflicts of Interest, under which the government will be able to propose members of management bodies and supervisory boards in companies where the state or local government units have ownership without a public tender.

January 25 – About thirty former workers of KIO Orahovica protested at Jelačić Square demanding that Croatian authorities finally resolve the issue of payment of 14 million kuna in workers’ claims.

January 26 – The Council of the Croatian National Bank decided to increase the mandatory reserve rate for banks from 14 to 15 percent.

January 26 – The government proposed the abolition of the Financial Police as its tasks overlap with other supervisory services.

January 27 – About 150 workers of Jadrankamen occupied the factory premises in Pučišća, and about 40 occupied the premises in Selca because they do not want to comply with the decision of the CEO Vedran Vilović prohibiting their entry into the factory premises.

January 27 – Viadukt announced that the business association of Viadukt and the Spanish company Cyes won the tender for the construction of a bulk cargo terminal in the Port of Ploče, with a contract value of 406.5 million kuna excluding VAT.

January 30 – The Assembly of the company Hrvatske šume d.o.o. revoked the previous members of the Management Board of that company and appointed a new Management Board headed by Ivan Pavelić.

January 30 – A delegation from the International Monetary Fund (IMF) began a visit to Croatia during which it will hold several meetings with representatives of Croatian authorities to familiarize themselves with current economic and financial developments and projections for the upcoming period.

January 31 – About a hundred workers and union representatives of Split’s Dalmacijavino gathered in Zagreb in front of the Ministry of Economy, where they protested due to unpaid salaries and uncertainty regarding the privatization of the company.

January 31 – About 200 workers of Dioki protested at Ban Jelačić Square demanding the lifting of the blockade and the resumption of production in that company, which has been halted for more than six months.

January 31 – About 200 workers of Adriachem protested in front of the company in Kaštela demanding a meeting with local and state authorities to discuss the model for conducting bankruptcy proceedings in Adriachem.

FEBRUARY

February 1 – Prime Minister Zoran Milanović met with the presidents of five trade union centers, and after the meeting, it was stated that the government has no intention of changing the Labor Law or laying off workers in public services, and plans to soon adopt a regulation ensuring that salaries can no longer be paid without contributions for health and pension insurance. Minister of Labor and Pension System Mirando Mrsić stated that the government does not plan layoffs in public services but wants to achieve savings by rationalizing the system, which will eliminate overtime work and work under contracts for specific jobs.

February 1 – The Ministry of Economy announced that the supplementary documentation submitted by Traubi International Salomon Berkovitz for the purchase of Dalmacijavina does not meet the requested requirements of the Ministry, thus ending negotiations with that bidder and fulfilling the conditions for the bankruptcy of Dalmacijavina.

February 1 – The dairy industry Dukat announced that it will start paying its cooperatives for milk at market prices. This means that the price for February will be 20 lipa lower than before.

February 1 – Janaf reported that the Croatian Agency for Mandatory Oil and Oil Derivatives Reserves (HANDA) revoked Barbara Šimić and Krešimir Baranović from the Supervisory Board of Janaf and appointed Srećko Ferenčak and Goran Kovačević instead. Ferenčak was sentenced to one year in prison by the Zagreb County Court in 2011 for the “Nanbudo” affair, i.e., the illegal sale of city land.

February 2 – The First Deputy Prime Minister and Minister of Economy Radimir Čačić stated that at the request of Srećko Ferenčak, he will initiate the revocation of HANDA’s decision regarding his appointment to the Supervisory Board of Janaf, due to the damage that media treatment of Ferenčak could have for the ruling coalition.

February 2 – The government decided that the debt of Industrogradnja to the state in the amount of 108 million kuna will be collected by taking over the skyscraper owned by that company on Savska Street.

February 2 – The company Ikea Croatia announced that preparatory work has begun at the location of the future Ikea department store and shopping center in Rugvica.

February 2 – The creditors’ committee of Radio 101 accepted the offer of the company Impossibile Egressus of 6,112,000 kuna for the recapitalization of Stojedinica, reported the bankruptcy trustee Maroje Stjepović.

February 2 – The Assembly of the Jadrankamen union decided to temporarily suspend the general strike after receiving a written guarantee from the CEO Vedran Vilović to revoke the decision on the extraordinary dismissal of two workers.

February 2 – The tourism company Uniline announced that it is halting further activities related to the acquisition of Generalturist, as it has become clear that the rehabilitation and restructuring of Generalturist’s business would be significantly more difficult than expected.

February 2 – The construction company Tehnika reported two newly concluded construction contracts worth a total of 18.4 million euros – for the construction of a business building in the Zagreb neighborhood of Rudeš with the company Vrbani centar, and for the reconstruction, partial upgrade, and repurposing of the Vesna factory – women’s fashion textile confectionery on Nova cesta in Trešnjevka.

February 6 – The IMF mission issued a concluding statement after its visit to Croatia, emphasizing that it supports the intention of Croatian authorities to begin fiscal consolidation in 2012 and encourages them to quickly implement the legal and institutional changes necessary for the full implementation of the planned reduction in spending. The mission warned that, with unchanged policies, economic prospects in 2012 and the medium term are weak.

February 6 – The Croatian Association of Milk Producers announced the initiation of radical actions to protect milk producers if Dukat does not withdraw its intention to unilaterally determine the purchase price of fresh raw milk monthly. For this purpose, a crisis headquarters for the defense of milk producers’ prices in Croatia has been formed.

February 6 – Ina announced that, due to the worsening security conditions in Syria, it decided to withdraw most of its employees from Syria at the end of January.

February 6 – Belje announced that the Constitutional Court temporarily postponed the execution of the decision of the Croatian Financial Services Supervisory Agency (Hanfa) regarding Agrokor’s obligation to publish an offer for the takeover of the remaining shares of Belje, and ordered the High Administrative Court to make a decision in this matter within six months.

February 7 – Agrokor announced that it has withdrawn its non-binding offer to purchase 52.1 percent of shares of the Slovenian retail chain Mercator as they assessed that the prolonged process so far has made it uncertain that they would be able to complete the transaction under satisfactory conditions.

February 7 – Viadukt announced that it has been awarded the job of building a collector in Pula, with a contract value of 45.3 million kuna excluding VAT.

February 7 – Janaf reported that it has received a decision from HANDA revoking Srećko Ferenčak from the position of member of the Supervisory Board of Janaf and appointing Krešimir Komljenović.

February 8 – Ingra announced that it has reached an agreement with the Ministry of Health under which the Zagreb Tumor Clinic has been handed over for use to that ministry.

February 9 – From 12 to 14 hours, protests were held by farmers dissatisfied with the state of agriculture, non-payment of incentives, and the announced reduction of the budget for agriculture. The protest was organized by the Defense Headquarters for Agriculture, established by the Croatian Agricultural Chamber, in all counties of continental Croatia.

February 9 – Prime Minister Zoran Milanović postponed the proposal for the law on the agency for monitoring the operations of the energy sector and investments for seven days due to the discussion and differing opinions of the first deputy prime minister and minister of economy Radimir Čačić and minister of environmental protection Mirela Holy at the government session.

February 9 – The Minister of Transport and Communications of Bosnia and Herzegovina Rudo Vidović signed with the president of the management board of Croatian Highways Stjepko Boban and a representative of the Austrian company Strabag a contract for the construction of an interstate bridge between Croatia and Bosnia and Herzegovina on the Sava River near Svilaj, which is an integral part of the highway on the pan-European corridor V c.

February 13 – The government sent a proposal for the state budget for 2012 to the Parliament, with planned expenditures amounting to 118.84 billion kuna, which is 3.4 billion kuna less than last year, while revenues are planned at around 108.95 billion kuna, which is 1.4 percent more than in 2011. The planned budget deficit is 9.9 billion kuna or 2.8 percent of GDP.

February 13 – The management of Generalturist submitted a request to initiate bankruptcy proceedings, as the financial capabilities of the ownership structure have been exhausted and the attempt to find a strategic partner has failed.

February 14 – Protests by milk producers began in front of Dukat in Zagreb and Sirela in Bjelovar, organized by the Croatian Association of Milk Producers, aiming to force milk processors to increase the purchase price of raw milk. Milk producers demand the withdrawal of Dukat’s offered price of fresh raw milk of 2.30 kuna and seek an average purchase price of milk as in EU countries.

February 15 – At the meeting of the Expert Council for Monitoring the State of Milk Production and Processing, it was concluded that, in accordance with EU practice, the price of milk will be formed in agreement between producer associations and dairymen, and by the end of February, each dairy will define the model for forming the price of milk with representatives of producer associations.

February 15 – Fitch Ratings agency assessed that the proposed reduction of expenditures in the Croatian state budget for 2012 is encouraging, but that the planned cuts are smaller than announced, and announced that the rating assessment of Croatia will be completed by the end of the first quarter.

February 17 – The Parliament accepted amendments to the VAT Law, under which the general VAT rate will increase from 23 to 25 percent starting March 1. A reduced VAT rate of 10 percent was introduced for edible oils and fats, baby food, and processed food based on cereals for infants and small children, for white sugar, and for water deliveries. The law also established that from the beginning of 2013, the reduced VAT rate of 10 percent will also apply to hospitality, i.e., food in hospitality establishments, non-alcoholic beverages, wine, and beer in those establishments. From the beginning of 2013, the threshold for registration in the VAT register will also be increased from the previous 85,000 kuna to 230,000 kuna.

February 17 – The Parliament adopted amendments to the Income Tax Act, which will increase the personal deduction for employees to 2,200 kuna from March 1, and for pensioners to 3,400 kuna. The tax brackets are also changed, while the tax rates (12, 25, and 40 percent) remain the same, and a taxable income on dividends over 12,000 kuna annually is introduced.

February 17 – The Parliament accepted amendments to the Contributions Act, which will reduce the general contribution rate for health insurance from 15 to 13 percent starting May 1.

February 17 – The Parliament amended the Profit Tax Act under which the provision on taxing dividends and shares in profits will come into force on March 1 at a rate of 12 percent. Starting in 2013, a provision will come into force that exempts all reinvested profits that are entered into the capital after the completion of the calculation from profit tax.

February 17 – The Minister of Agriculture Tihomir Jakovina called on protesting milk producers to move off the roads and to negotiate the most favorable model of solution with their associations, on which dialogue will continue in the ministry regarding the issue of the purchase price of milk.

February 21 – The Administrative Council of the Port Authority of Rijeka decided to start the construction of a container terminal on the Zagreb coast in the Rijeka port, and it was announced that the contract for the design and construction of the terminal will be signed with the contractor within a month. Seven bidders applied for this part of the Rijeka Gateway project, and the consortium of Italian companies CO.ED.MAR., Grandi Lavori Fincosit, Impresa Costruzioni Giuseppe Maltauro, and Croatian Osijek Koteksa was selected, which offered a price of 71.5 million euros.

February 22 – Milk producers who protested in front of Dukat in Zagreb closed Slavonska Avenue at Čavićeva in both directions, causing traffic to be redirected. The police removed tractors from the road the following night and detained the milk producers who protested in front of Dukat.

February 23 – The government accepted the offer of the French consortium Zagreb Airport International Company (ZAIC) for the concession to build a new passenger terminal at Zagreb Airport. ZAIC, backed by Paris Airport – Aéroports de Paris Management – and construction company Bouygues Batiment International, offered a fixed part of 87.2 million euros over a 30-year period, and when the variable part is added, Croatia should receive several hundred million euros from the concession fee.

February 23 – The government made a decision to join and implement EU sanctions against Syria into its legal system, which means that Ina must withdraw from Syria.

February 23 – The Assembly of the company Plinacro revoked the director of that company Jerko Jelić-Balta and appointed a new Management Board headed by Mladen Antunović.

February 23 – Privredna banka Zagreb (PBZ) announced that by the end of November 2012, PBZ should be merged with Međimurska banka, a member bank of the PBZ Group.

February 24 – The Croatian Parliament adopted the state budget for 2012, which planned expenditures of 118.8 billion kuna, which is 3.4 billion less than last year, while revenues are planned at 108.9 billion kuna, or 1.4 percent more than in 2011. With planned revenues and expenditures, the budget deficit is reduced by more than 5 billion kuna and amounts to 9.9 billion kuna or 2.8 percent of GDP. The government predicts economic growth of 0.8 percent and inflation of 2.4 percent in 2012.

February 24 – The Croatian Parliament amended the Law on Special Measures for Collecting Tax Debt Caused by the Economic Crisis. The Parliament also adopted a law establishing a center for monitoring the operations of the energy sector and investments that would monitor investments announced by the government in the energy sector, which would be carried out by companies in majority and partial state ownership. The Law on Financing Local and Regional Self-Governments was also amended, redistributing part of the income tax in favor of municipalities, cities, and counties.

February 24 – Part of the associations of milk producers signed an agreement on determining the model for calculating the purchase price of milk, under which the price will be 2.43 kuna per kilogram, but the Croatian Association of Milk Producers (HSUPM) did not agree to that price and decided to continue protests.

February 24 – Dissatisfied milk producers reached near Mark’s Square and requested to meet with Prime Minister Zoran Milanović, but this did not happen, and the milk producers peacefully dispersed after a two-hour protest.

February 24 – The Supervisory Board of Podravka appointed a new Management Board – Zvonimir Mršić, the former mayor of Koprivnica, was appointed president, and members are Jadranka Ivanković, Olivija Jakupec, Jorn Pedersen, and Miroslav Klepač.

February 27 – Darko Grivičić submitted his resignation as president of the Croatian Agricultural Chamber (HPK) at the HPK Board meeting.

February 28 – Representatives of HSUPM reported that the Headquarters for the Defense of Milk Prices is ending its activities, and the protesters will withdraw tractors from protest points during February 28 and 29.

February 28 – The Competition Protection Agency rejected initiatives from Japan Tobacco International and BAT Croatia requesting the initiation of proceedings ex officio to determine the abuse of a dominant position against the Tobacco Factory Rovinj, i.e., the Adris Group.

February 28 – CMC cut off electricity, gas, and water to members of the C.I.O.S. group in the Sisak South Industrial Zone, forcing four manufacturing companies with 140 workers to cease operations, and C.I.O.S. expects an urgent response from the government, Sisak-Moslavina County, and the city of Sisak to resolve this situation.

February 29 – On the occasion of European Trade Union Day, about two hundred union members from the Independent Trade Union of Croatia and the Independent Croatian Trade Unions held a half-hour protest in Radićeva Street, near Kamenita vrata, against austerity measures that primarily burden workers in the fight against the crisis.

February 29 – Representatives of the Coordination of Croatia Airlines Unions announced a warning strike due to the employer’s refusal to accept union demands during negotiations for a new collective agreement, while the management stated that they consider the announced strike a form of blackmail detrimental to the long-term interests of the entire company and all employees.

February 29 – HEP and the City Gas Company announced that due to the increase in VAT from 23 to 25 percent, electricity and gas bills will increase by an average of about 1.63 percent.