tihomir orešković.jpg
Photograph: HINA/ Slavko VUKADIN/ ua

Prime Minister Tihomir Oreskovic said on Wednesday he expected a positive opinion from the European Commission on the National Reform Programme.

Speaking at the start of a Cabinet meeting, the prime minister recalled that today the EC would make public its opinion on the proposed reforms, parts of which have been leaked to the public, adding that his government "has expected a very positive opinion because it is a good programme."

"I think that now we will hear not only that these are good reforms but that Croatia is going in the right direction," Oreskovic said. He noted that two months ago the country "was on the verge of corrective measures being imposed, but in a very short time we drew up a good document."

"This document is a further success for this government and both investors and credit rating agencies will see this support," Oreskovic said. He said he would make a more specific statement in the afternoon after the Commission officially published its opinion.

The National Reform Programme contains serious measures to improve public finance, the health system and the business environment, according to the draft document ready for adoption at a meeting of EU commissioners in Brussels today, which was seen by Vecernji List daily.

The newspaper says that the Commission will give Croatia five new economic recommendations.

The Commission recommends that before the end of the year the government impose a real estate tax, take the necessary measures to discourage early retirement and reduce the number of special welfare mechanisms, stop the fragmentation of public administration and make it more efficient, reduce parafiscal charges, and improve the efficiency of commercial and administrative courts. The Commission has no intention of stepping up the monitoring of macroeconomic imbalances or taking corrective measures, according to Vecernji List.

The Cabinet meeting began by adopting reports on the execution of the state budget and the application of the fiscal rule for 2015, which show that budget expenditure was reduced by 3.6% from the previous year, while GDP increased by 1.8% in nominal terms, whereby the fiscal rule was satisfied.

The temporary fiscal rule requires that the year-on-year increase in general budget expenditure not be higher than the projected year-on-year GDP growth rate.

Finance Minister Zdravko Maric said that both the National Reform Programme and the Convergence Plan provided for "a much more rigorous fiscal rule", adding that the European Commission had also noticed that progress should be made in that area.

The report on the execution of the 2015 budget shows that revenues totalled HRK 109.8 billion and expenditure HRK 118.6 billion. The budget deficit was HRK 8.8 billion, or 2.6% of GDP. With the addition of extrabudgetary users and local government units, the 2015 general budget deficit was HRK 7.2 billion, or 2.3% of GDP, falling 1.5 percentage points short of the target.

In this report the general government deficit was calculated according to the national methodology and differed from the deficit calculated according to the ESA 2010 methodology used by Eurostat. According to the ESA 2010 methodology, the deficit was HRK 10.7 billion, or 3.2% of GDP.

Maric noted that because of methodological changes it was very difficult to compare data for 2015 and 2014, citing the exit of the Croatian Health Insurance Fund (HZZO) from the state treasury and the inclusion of various other entities, such as national parks as public institutions.

At the meeting, the government approved a new loan to ensure the normal operation of motorways operators.

The Rijeka-Zagreb Motorway (ARZ) operator was granted permission to borrow EUR 70 million from Erste&Steiermaerkische, Privredna Banka, Societe Generale-Splitska Banka and Zagrebacka Banka to finance its planned operations in 2016.

Related stories

Government adopts draft 2016 budget

2015 budget deficit considerably lower than planned

Budget revenues planned at HRK 113b, expenditures at HRK 120.4b

Proposed 2016 budget not reform-oriented, analysts say

Govt. unveils plan to solve macroeconomic imbalances

Latest news

Two charged for racially insulting actor Jamie Foxx in Dubrovnik

Dubrovnik police will bring misdemeanour charges against two men for disturbing the peace on Sunday night in a local restaurant when they racially insulted African American actor Jamie Foxx, who is currently in Dubrovnik filming "Robin Hood: Origins".

Opposition youth leader arrested in Zimbabwe

Zimbabwean police on Monday arrested an opposition youth leader on charges of inciting public violence against the government of President Robert Mugabe, the youth leader’s lawyer said.

Turkey dismisses 227 judges and prosecutors

Turkey's top judicial body on Monday dismissed 227 judges and prosecutors who are accused of having links to a cleric blamed for last year's coup attempt, the state-run Anadolu news agency reported.

Germany vows to do all it can to free journalist detained in Turkey

The German Foreign Ministry on Monday hailed German-Turkish journalist Deniz Yucel as a symbol of free speech as it vowed to treat his case with the "utmost importance" in order to secure his release.

Minister: State of education system not disastrous, Croatia leads in some indicators

Croatian Science and Education Minister Pavo Barisic has opposed assessments that the situation in the education system is disastrous, underlining that according to some indicators, Croatia is among the best European countries, as evidenced by the fact that as many as 97% of teachers attend seminars and lectures, a rate much above the European average.

Le Pen says al-Assad is better solution for Syria than Islamic State

France's far-right leader and presidential candidate Marine Le Pen said Monday that Syrian President Bashar al-Assad remains the more reassuring solution for France than Islamic State.

Residents in northern Greece oppose refugee children attending school

There were renewed clashes between angry residents and police in the northern Greek town of Oreokastro on Monday, where some locals have for months opposed children from a nearby refugee centre being taught at the local school.

Germany, France slam Russia's acceptance of Ukrainian rebel passports

EU member states Germany and France, which have been seeking to mitigate the conflict between the Ukrainian military and Russian-backed rebels in eastern Ukraine, on Monday broadly condemned Russia's recognition of rebel-issued passports.

Stier says Croatia strongly supports Kosovo, calls for enhancing economic cooperation

The Croatian minister announced a closer economic cooperation with Kosovo.

Afghanistan demands Pakistan hand over militants, shut training camps

The Afghan government has demanded that Pakistan hand over terrorists operating on its soil and close tens of terrorist training camps, the Foreign Ministry in Kabul said Monday.

Four Russian servicemen in Syria killed in vehicle bombing

Four Russian servicemen were killed and two others injured when a remote-controlled bomb exploded under their vehicle in Syria's western Homs region, Russian state media reported Monday, citing the Defence Ministry.

Iraqi forces advance in Mosul as US Defence Secretary visits Baghdad

Iraqi forces pressed on with their offensive to dislodge the extremist Islamic State militia from their stronghold in northern Iraq, as US Defence Secretary Jim Mattis landed in Baghdad on an unannounced official visit.