A member of the Social Democratic Party (SDP) Presidency and member of Parliament, Sinisa Hajdas Doncic, said on Saturday that the current situation in the Agrokor food and retail concern was due to "crony capitalism dating from the time of ownership transformation."

"We know that the reason why the economy is so exposed to a single system is privatisation and ownership transformation. It started with the same political party which now has a problem and does not how to solve it," Hajdas Doncic, who was Transport Minister in the Zoran Milanovic government, told a news conference in Zagreb.

He believes that there is a conflict of interest in the case.

"First (Economy Minister Martina) Dalic exempts herself from the INA case, then (Finance Minister Zdravko) Maric exempts himself from the Agrokor case, and now probably she will take charge of the Agrokor case and he of INA," said Hajdas Doncic, accusing the current government of clientelism and of favouring exclusively big business.

"We find the proposed model (for the bailout of companies vital for the national economy) unacceptable, we want the state to have an active role, but not by being a dominant creditor but by being a creditor that will protect workers, suppliers and its own rights, by participating equally with other creditors in Agrokor's restructuring," he said.

The SDP official called on Agrokor owner Ivica Todoric to publicly explain Agrokor's situation, how he intended to solve the company's problems and what he had in mind regarding its restructuring.

Hajdas Doncic also wondered whether the government-sponsored bill designed to help bail out companies that are vital for the national economy meant that taxpayers would pay for Agrokor's current liquidity.

The SDP advocates an entirely different model, with the state being a partner and participant in the restructuring process that would have to take into account three key factors - the amount of the debt to small suppliers, the amount of workers' wages, and the amount of the company's VAT debt, said Hajdas Doncic.

Economics professor Josip Tica warned about the problem of Agrokor's small and medium suppliers and workers, who he said did not have anyone to represent their interests.

"Agrokor annually pays HRK 4.5 billion for wages, half of which is paid in Croatia, and if wages are not paid, that becomes a macroeconomic problem in the context of personal consumption," he said.

Tica believes that Agrokor could cause what he described as a recession infection in the system.

"When you look at Agrokor's financial statement for 2015, it is evident that its sales revenue from regular operations was around HRK 22 billion in Croatia, however, with regard to industrial turnover, the strongest component was the food industry and its turnover totalled HRK 21 billion," he said, adding that creditors such as big banks could survive possible negative effects but that other creditors could have difficulty maintaining their operations.

Latest news

Syrian opposition rules out future role for President al-Assad

The Syrian opposition said Friday it would not accept any role for President Bashar al-Assad in the future of the war-torn country, reacting to a recent US shift saying that removing al-Assad is no longer a priority for Washington.

Russian Army integrates breakaway forces of Georgian province

Parts of the small fighting forces of the Georgian breakaway province of South Ossetia have been placed under Russian military control, Russian Defence Minister Sergei Shoigu said on Friday.

Czech Republic's Pilsner Urquell beer is now Japanese

Japanese brewing company Asahi completed its takeover of the Czech brewery Pilsner Urquell on Friday, Asahi said in a statement.

Judge approves 25-million-dollar settlement of Trump University case

A US district judge on Friday approved a 25-million-dollar settlement of lawsuits and state fraud allegations against Trump University, the US president's now-defunct business venture.

Former Thai premier Thaksin to junta on reconciliation: 'Cut me out'

Former Thai prime minister Thaksin Shinawatra on Friday announced that he is not interested in the junta-led reconciliation process, three days after the junta handed him a half-a-billion-dollar tax bill for his past business deal.

Dalic: We welcome possible deal between Agrokor and banks

The government welcomes the possibility of an agreement being concluded between the Agrokor food company and creditor banks, and the bill on vitally important companies is not a fallback plan but the result of the government's care for the overall economic and financial stability of Croatia, Deputy Prime Minister and Minister of Economy Martina Dalic told a press conference in Zagreb on Friday.

Croatia, China sign action plan for cooperation in agriculture

The Croatian and Chinese ministries of agriculture on Friday signed an action plan for cooperation in the field of agriculture for the period 2017-2018, the Croatian ministry said in a statement.

ZSE indices up, Agrokor shares in focus of investor interest

The Zagreb Stock Exchange (ZSE) indices on Friday rose by more than 1.8%, with stocks of the Agrokor food and retail concern being in the focus of investor interest again.

Berlin police defend handling of Berlin market attacker

Berlin police defended themselves on Friday against accusations that they stopped surveillance on Berlin Christmas market attacker despite knowing in June 2016 he was dangerous.

Croatia, creditors tailor emergency measures to save tottering giant

Croatia's tottering retail and food giant Agrokor reached an agreement with its creditors, putting its debts standby and allowing it to continue working during emergency restructuring, the Croatian branch of Austria's Erste Bank said Friday.

Agrokor's creditors say standstill agreement to go into force today

A standstill agreement regarding the Agrokor concern's existing financial obligations to banks will take effect on Friday, additional capital will be injected into the concern in the coming days and the concern will be actively restructured, which includes a change of its management, it was said on Friday after a meeting between Agrokor's suppliers and creditor banks.

Palestinians, UN slam Israel's new settlement plan

Palestinians, Israeli activists and the UN lambasted the government of Israeli Prime Minister Benjamin Netanyahu on Friday, a day after it gave the go-ahead for the first new West Bank settlement in a quarter of a century.

South Sudan rebels release three abducted foreign oil workers

South Sudanese rebels have released three foreign engineers they abducted in early March in the oil-rich Upper Nile region, Foreign Affairs Ministry official Mawein Makol Arik said on Friday.

Turkish opposition: Imprisoned party chief has gone on hunger strike

The head of Turkey's pro-Kurdish opposition party has launched a hunger strike from prison.

European leagues threaten Champions League schedule clashes

The European Professional Football Leagues (EPFL) on Friday threatened schedule clashes on Champions League matchdays in an ongoing dispute with the governing body UEFA.

Danish court revokes citizenship of IS volunteer

A Danish appellate court on Friday stripped a man of his Danish citizenship for volunteering to fight for the extremist Islamic State in Syria.

Banks and Agrokor agree on key elements of standstill agreement

Member banks of the coordinating committee of financial creditors and representatives of the Agrokor food company have in principle agreed on key elements of a standstill agreement, which is expected to be signed later today, announcing changes in the company's management team, Erste Bank said in a statement on Friday afternoon.

Syrian man on trial in Sweden; mosque attack labelled terrorism

A Syrian man went on trial Friday in the southern Swedish city of Malmo, charged with terrorism and arson after an attack last year on a building used as an assembly hall by Shiite Muslims.