Focus areas

Liberalisation and privatisation

Negotiations for Croatia’s accession into the European Union are in progress but with delays.

Some progress has been made in the privatisation of the main shipyards – the key issue in the country’s EU accession negotiations and for the economy more generally. The privatisation of oil company, INA, has progressed over the past year, elsewhere however the progress with privatisation remains slow.

Business environment and competition 
Doing business in Croatia can still be difficult. Businesses regard problems in the labour market, tax rates and administration, competition from the informal sector and government regulation to be the main obstacles. Croatian government is working on simplifying the regulations and introducing a new competition policy.

Infrastructure

A number of large public infrastructure enterprises continue to receive significant state subsidies, putting a strain on public finances during the recession.

Financial sector

T he financial sector has managed to weather the global financial crisis fairly well. The banking system is well-capitalised and liquid, and foreign banks have remained strongly committed to supporting their subsidiaries. The authorities responded promptly to the crisis by reducing reserve requirements, eliminating the marginal reserve requirement on banks’ foreign borrowing and increasing the guarantee on bank deposits. Consolidation of the banking sector is desirable and is likely to happen over the medium term.

Last updated 21 April 2010