The European Commission on Wednesday published five economic recommendations for Croatia, saying that the country's reform programme was broadly ambitious and if it managed to achieve a durable correction of the excessive deficit this year, it might move from the corrective to the preventive arm of the Stability and Growth Pact next year.
In the first recommendation, the Commission calls on Croatia to ensure a durable correction of the excessive deficit.
In the second recommendation, Croatia is urged to take measures by the end of 2016 to discourage early retirement, accelerate the transition to the higher statutory retirement age and provide appropriate up- and re-skilling measures to enhance the employability of the working-age population, with a focus on the low-skilled and the long-term unemployed.
In the third recommendation, the Commission says that Croatia should reduce fragmentation and improve the functional distribution of competencies in public administration to improve efficiency and reduce territorial disparities in the delivery of public services. In consultation with social partners, Croatia should harmonise the wage-setting frameworks across the public administration and public services, reinforce the monitoring of state-owned enterprises' performance and boards' accountability.
In the fourth recommendation, the Commission recommends that Croatia significantly reduce parafiscal charges, remove regulatory restrictions hampering access to and the practice of regulated professions, and reduce the administrative burden on businesses.
The fifth recommendation relates to improving the quality and efficiency of the judicial system in commercial and administrative courts, and facilitating the resolution of non-performing loans, in particular by improving the tax treatment of the resolution of non-performing loans.
The Commission confirmed that Croatia and Portugal were experiencing excessive imbalances, stressing that the level of ambition of the two countries' national reform programmes was broadly adequate and confirmed their intention to correct their excessive imbalances. Both countries were called upon to implement their reform agendas "rigorously and in a timely manner".