Primorac: Citizens have subscribed to about 700 million euros in bonds so far

Citizens have subscribed to government bonds worth about 700 million euros so far, reported Finance Minister Marko Primorac on Monday, assessing that the interest is very good and in line with expectations.

– The interest is very good, just as we planned. Our targeted issuance amount was one billion euros. According to the latest information, approximately 700 million euros have been paid in so far. Therefore, the subscription is proceeding as planned, and we expect that everything we planned will be subscribed – said Primorac to reporters on the sidelines of the EPP club conference on the Recovery and Resilience Plan titled ‘Path to Recovery’ at the Westin Hotel in Zagreb.

Namely, the so-called people’s bonds are subscribed in two rounds – the first is for citizens and lasts until March 1 at 8 PM. After that, the subscription for citizens will close, and on March 3, it will open for institutional investors and will last only that day.

The subscription is conducted in more than 500 bank branches that are the leading agents of the issuance – Erste&Steiermärkische Bank, OTP Bank, Privredna Banka Zagreb, Raiffeisenbank Austria, Zagrebačka Bank – and the co-arranger of the issuance, which is Hrvatska Poštanska Banka. Additionally, two banks (Erste and PBZ) have enabled subscription of bonds through digital channels.

The state plans to raise one billion euros through the bond issuance, the minimum investment for citizens is 500 euros, the minimum interest rate is 3.25 percent per annum, and the bond matures in 2025.

Currently focusing on electricity and gas in the new package

When it comes to the announced package of measures to assist citizens and the economy for the period starting April 1, Primorac stated that it is still being defined, and that the current focus is on electricity and gas.

– All other measures that will be paid out in the form of income support to citizens with the lowest incomes will also be considered, and these measures will certainly remain, and we will likely adjust the payment dynamics to the collection of revenue from the additional profit tax – announced the finance minister.

Namely, the current package of measures expires on March 31, which regulates the prices of electricity and gas, and Primorac emphasized that measures need to be adopted for the period starting April 1 that will provide security to citizens, while also ensuring that they are targeted and temporary.

Although he did not want to go into details of the new package, he mentioned that there are citizens with sufficiently high incomes who should not have their prices subsidized completely or to the extent that has been done so far.

Thus, when it comes to electricity prices, according to the still valid measures, households for semi-annual consumption up to 2500 kilowatt-hours (kWh) pay a ‘practically frozen’ electricity price, while the tariff for consumption above that level is 50 percent higher.

– I believe that this tariff should be even higher, or that it should approach market prices. Therefore, for citizens who have more resources, I believe that the state should not subsidize that increased consumption as much – said Primorac.

When asked how the thresholds will be determined, by salary amounts or by property, Primorac agreed with reporters that the current situation is such that there is currently no household register or population register, so there is a possibility that someone receiving a small pension also has other sources of income.

In the absence of instruments, Primorac has taken the initiative, highlighting the Ministry of Finance as a potential bearer of a project related to the establishment of a population register and a household register, which would allow all future packages of measures, as well as any other support to citizens, to be better targeted.

The concept has already been developed, but the register will not be completed quickly, and its creation will certainly take some time, said Primorac.