Government is firmly at the helm, we work diligently in the best interest of our citizens

Prime Minister Andrej Plenković said on Wednesday that despite all the challenges and the turbulent times, the government had shown that it was firmly at the helm and that it had a clear vision of economic recovery, development and a promising future for Croatia.

The past two years have not been easy, many are worried about the future, yet there is no reason for despondency but for stronger unity because Croatia has the strength and the potential to overcome these hardships, he said in parliament, submitting the government's annual state of the nation report.

The prime minister presented the report through five pillars - social security, promising future, economic sovereignty, stronger statehood, and global recognisability.

Pandemic has already cost one-fifth of the budget

He said that the past year, the first in his cabinet's second term, included two COVID-19 waves and that the pandemic has already cost HRK 35 billion, one-fifth of the state budget.

The year was also marked by the devastating earthquake in Banovina, GDP contraction and a record rise in energy prices, he added.

Still, it was also the year in which, through strong measures, we managed to retain jobs, prevent bankruptcies, and have the highest employment rate in 13 years, Plenković said.

The government is aware of all the challenges and is building a solidary and just country, he said, and by pursuing a policy of modern sovereignism, it is utilising Croatia's increasingly strong position in Europe and the world to achieve national interests and raise the quality of living.

In the years ahead, Plenković said, the government will put special emphasis on a demographic revival so that Croatia can become a more vital society with a future.

Minimum wage to increase by HRK 350 as of January

The government would pass the decision on Thursday, the prime minister said, submitting to the parliament the annual report on the work of the government.

He underscored that the government was raising the minimum wage for the first time to more than 50% of the average net salary and to over 60% of the median net salary, which would impact 51,000 workers.

Five years ago, he recalled, the minimum salary was 38% of the average salary.

The prime minister also said that the number of employed persons was higher by 51,000 than last year and that it had reached 1.6 million employed persons, which was to date the highest number in August after the record 2008 and the second highest since independence.

The unemployment rate, which stood at 13.3% five years ago, declined in August to 7.3%, he said, adding that this was the result of active employment policy measures, in which about HRK 5.5 billion had been invested over five years, encompassing 165,000 persons.

Croatia will be among fastest growing EU economies this year

"Although we expected growth of 5.2 percent, after the successful tourist season, which is ongoing, and growth of 16.1 percent in the second quarter, we believe we could reach annual GDP growth of over eight percent," the prime minister said, adding that according to all expectations Croatia would be among the fastest growing EU economies this year.

"Had it not been for the pandemic and economic crisis, our public debt could have been below 60 percent of GDP already two years from now," he stressed. The budget deficit is projected at 2.6 percent of GDP in 2022, which would "help us achieve our goal and join the euro area as early as 1 January 2023."

Speaking of the education system, Plenković said that the government would continue to improve the status of teachers, announcing new bills to promote all-day school classes, pilot projects for national exams and trial final school exams, and the competitiveness of science and higher education.

Further increase in parental leave benefits 

To reverse the negative demographic trends, Plenković announced a further increase in parental leave benefits for the second six months after the child's birth, which have been doubled in the last five years from HRK 2,660 to 5,654. "Next year we will increase them to HRK 7,500 for employed and self-employed parents, while at the same time introducing 10 days full-pay paternity leave for employed and self-employed fathers."

The prime minister highlighted the importance of balanced regional development of the country to reduce depopulation and emigration of young people. He said that the government would continue strengthening civil society, protecting the rights of ethnic minorities and promoting a culture of tolerance.

Speaking of the cultural sector, he mentioned the new Electronic Media Act and announced the adoption of the new Sport Act to advance the entire system.

Self-sufficiency in food and energy production for economic sovereignty

He commented on the rise in prices of transport, products and materials in many sectors, stressing the importance of the country's economic sovereignty by achieving self-sufficiency in food and energy production, sustainable use of natural resources, and sustainable tourism.

 As for energy prices, Plenković said that the government had responded promptly and stabilised the prices of petroleum products for a period of 30 days and would take other measures if necessary.

"Unlike many other European countries, the prices of natural gas in Croatia are stable and will remain so until 1 April, by which time the heating season will be over," the prime minister said. He noted that the electricity prices in Croatia were among the lowest among 33 European countries and their stability was due to an energy mix, citing the LNG terminal on the northern Adriatic island of Krk and the Krško nuclear power plant.

Speaking of post-earthquake reconstruction, Plenković recalled that the Reconstruction Act had been amended to eliminate bottlenecks, accelerate the process and make it possible for earthquake victims to return to their homes.

He also mentioned threats against democracy, saying that priority should be given to maintaining constructive political dialogue and fighting hate speech and fake news. As an example of what disinformation and hate speech could do, he cited the 12 October 2020 terrorist attack on the government building in St Mark's Square, in which a security guard was wounded and the 22-year-old attacker committed suicide later that day.

Plenković said that there were no untouchables in his government and that they wanted to eradicate corruption as one of the main obstacles to building a more just and developed society.

"DORH (the Chief Public Prosecutor's Office), USKOK (the anti-corruption office) and police do their work autonomously and independently, and investigations are secret. We want penalties to be such that everyone realises that corruption does not pay," the prime minister said. 

Plenković also mentioned accession to the euro area and adoption of the euro as legal tender as the government's priorities. He noted that the citizens had already decided on this at the 2012 referendum on joining the European Union.

Text: HINA

News