Prime Minister Andrej Plenkovic said on Friday that Croatia would continue talks with the European Commission following the Commission's request for Croatia to amend the law on the privatisation of the INA oil and gas company.
"Croatia will continue talks with the European Commission. This issue has existed for several years. What is strategically important to us is to maintain a very clear position in arbitration proceedings with a view to protecting national interests and INA as a strategic oil company," Plenkovic said in response to questions from the press after a meeting of the Government Council for Croatians outside Croatia, held in Vukovar.
The European Commission on Thursday requested Croatia to amend the 2002 law on the privatisation of INA on the grounds that it violates the free movement of capital and the freedom of establishment.
The request was sent in the form of a reasoned opinion, a second step in EU infringement proceedings. If Croatia fails to bring the INA law into line with EU law within two months, the Commission may refer it to the EU's Court of Justice.
"INA-Industrija Nafte d.d. is the main Croatian energy company, partially owned by the Croatian government. The INA law grants the state special powers in this company, including veto powers over INA's decisions relating to the sale of shares/assets with a value exceeding certain thresholds.
"As a consequence, stakeholders are not able to influence important company decisions in proportion to the value of their shareholdings, which may discourage potential investors from making investments in the INA company. The Commission considers that these special powers constitute a restriction to the free movement of capital and freedom of establishment that cannot be justified under the TFEU (Treaty on the Functioning of the European Union).
"Although the objective of protecting the security of energy supply could justify restrictions to the freedoms listed in TFEU, the unconditional veto powers granted to the state by the INA law seem to go beyond what is necessary and proportionate to achieve this objective. The Croatian authorities undertook the commitment to align the INA law with EU law before its accession to the EU but it has not modified it yet," the Commission said.