Ursula von der Leyen last week brought the approval of the European Commission for Croatia’s national recovery and resilience plan (NPOO) to Zagreb, diplomatically complimenting host Andrej Plenković that the document is ‘brilliant and ambitious’, looked at the Cathedral, and went on an excursion with the most famous user of these European funds Mate Rimac in Sveti Nedelja. Thus, the parade ended, and it is time to conclude the discussion about whether the public sector has received too much, or the private sector too little.
Now the most important question becomes whether and how we will manage to spend that 12 percent of GDP, or 6.3 billion euros, which is available to us from the anti-COVID plan ‘EU Next Generation’. However, there is still a formal confirmation in the EU Council expected before the summer break, that is, by the end of this month. No problems are expected here, given that the document has been polished and agreed with Brussels bureaucrats down to the last detail. That is why the final version has undergone some changes compared to the document that the Government sent to the Commission on April 29. One of the key changes is the removal of the measure ‘Encouraging the internationalization of the Croatian economy by strengthening the export insurance guarantee fund and export credit financing activities’. Croatian negotiators were reportedly warned that developed countries could veto the entire document due to this measure. It does not take much deduction to conclude that it mainly concerns countries from which Croatia imports the most.
And, what now? After the Council’s approval, the first payment of 13 percent of non-repayable funds follows. This advance of over 810 million euros is expected before the deadline at the end of December. It is assumed that this money will go to the public sector, whose programs are mostly already prepared. The special advisor to the Prime Minister for economic issues Zvonimir Savić, who coordinated the preparation of the NPOO, expects that the first tranche will be directed towards investments related to public water supply and drainage projects, energy renovation of buildings, then towards financing assistance to users in preparing tender project-technical documentation, and in establishing and developing some IT systems to increase the efficiency of public administration.
However, the whole story is by no means exclusively about investments. Namely, the entire European package of non-repayable funds and loans amounting to 672.5 billion euros is primarily intended for financing reforms, and only then for investments that accelerate recovery and increase the resilience of the economy and society. Thus, Croatia has also planned to start with a reform package. Prime Minister Plenković has already announced that health care, justice, and the reform of public administration and territorial reorganization are first on the agenda. These reforms are also listed in the NPOO, with binding implementation deadlines. Meeting these reform ‘indicators’ is one of the key conditions for the uninterrupted flow of money. In addition, the government will logically hurry with larger interventions in the state structure that could also provoke controversies, so that the most sensitive shares are completed well before the next regular parliamentary elections in 2024.
