Croatian Deputy Prime Minister Branko Grčić speaks with PM Communications about the new role his country is about to take on within Europe
Just two decades after Croatia was recognised by the international community, the country is about to enter the EU. It is a very exciting time, without a doubt. It is the country’s most significant political success in recent years, and the most important event of 2013. Bearing in mind your country’s impressive development over the past two decades, what do you think would make this country an example to follow in the south-eastern Europe region?
It was much more difficult for us compared to other EU members. We had to undertake very deep reforms over a very sensitive period (over the past twenty years). Some may say that it has taken us too long, and we could have become a member a few years earlier, and there may have been more visible aspects, particularly with regard to the economy. We have taken a longer path, but it has helped us prepare ourselves better, particularly if we talk about the EU market and the EU structures themselves so to speak. So I think that given all of this, we could have added more quality to the process, and as a result we could have prepared ourselves better for this new membership.
If we look back at the 35 very demanding chapters we had to negotiate with the EU, we can see that we have really made considerable progress in all of these different segments. To give you an example, over the past three or four decades we have been finding that the EU has been putting pressure on us, but we are finally on our way towards resolving the crucial issues we have experienced in our economy. Out of five large shipyards, four will still be working after this process. This is very important. They will have a different ownership structure, so I think it is really very promising and they will have a viable and sustainable structure which will be very important for our economy in general.
The House of Lords in the UK has just ratified Croatia’s accession treaty, and the only thing that remains is the Queen’s signature for the bill to become an act. What is your view on Britain’s support towards Croatia’s EU succession?
We are really glad that Great Britain has done everything required. We are really thankful for this in a way, because they have shown that they believe in Croatia.
Regarding EU membership, there is going to be a larger inflow of foreign capital. This shows that Croatia has turned a page in terms of politics and the economy. Could you give us an outline of the country’s new economic and political strategy for this new era?
We are aware of the key problems in Croatia at the moment. Investment has declined considerably – by over a third, private investment in particular. In a way, this has been compensated by public investments, but there has been a serious issue with private investment.
We are trying to find a solution, because investments are a number one priority in our country at the moment. We are trying to do whatever we can within the framework of our macroeconomic policy to create better connections in terms of enhancing the business climate and removing specific obstacles. I became a coordinator and it is now my role to coordinate economic investment and EU funds. So I have established three operational groups that meet us on a weekly basis, so they can work on breaking down the obstacles that investors face.
Another very important issue is the amount of capital we have. We do not have that much at our disposal at present, and this is a limiting factor when it comes to investments.
How are those three groups advancing and how do they plan to attract more investment?
There is a group that deals with public investments, which coordinates all public companies’ investments. There is also a working group for EU funds, and there is a third group for private investments and the improvement of the business climate. We use the World Bank’s framework for the investment climate in Croatia.
Croatia is a gateway to South East Europe. The country will soon benefit from significant investments into infrastructure, energy and urban regeneration offering opportunities to small and big companies.
What strategies is the government implementing to encourage more investment from overseas and specifically the UK?
Within the framework of the global economic strategy of the Government of the Republic of Croatia, our top priority is to improve the legal base which regulates that substance either by issuing new rules or adapting the existing ones to the new circumstances.
We contact investors on daily base and try to encourage them by simplifying and shortening the needed procedures. Also, we stimulate new investors by implementing tax benefits for the hiring of new employees.
Which are the key sectors of interest for UK investors and vice-versa? What potential is there for Croatian investments once Croatia joins the EU?
Besides the investment in the infrastructure and industry, we hope that UK potential investors will find their interest in different sectors, particularly in the new technologies, IT sector. So far, our great potential is in agriculture and tourism and in their unforeseeable synergy.
And last but not least our greatest potential lies in the young, highly educated people capable of facing the most demanding tasks who are just waiting for their chance to implement their knowledge.
Concerning Croatia as the bridge to the South Eastern Europe, we can offer an irreplaceable location in the region, natural resources, knowledge and the quality of the unique environment.
From 2007 until to 2011 you were a member of the Economic Committee and the European Integration Committee of the Croatian Parliament. How do you feel now that EU accession is becoming a reality?
Of course, we are excited about the upcoming official accession of our country to EU, for which we have been waiting too long.
Actually, we feel like we're coming back home, concerning that our territory, history, culture and tradition have been for centuries an inevitable part of Europe. However, our accession to the EU will definitively be a great stimulus for our future prosperity, but we also hope and believe that we, ourselves, can give the new quality to that Europe.