Andre Plenkovic – Croatia, the War, and the Future

Croatian Government Intervenes in Cost of Living Crisis

September 17, 2023 by inavukic 11 Comments

With concerning level of inflation hovering around 12% in Croatia during the first quarter of 2023 and in August around 7.8% government attempts to curb it further have been the main topic of Croatian newsworthiness during the past week. With the peak tourist season ending, when prices of goods and services saw a great deal of runaway increases, particularly in the coastal region of Croatia, and given that tourism is among the main industries Croatia depends on for revenue it is somewhat odd and concerning that the government had not stepped in to interfere in prices with a similar force and determination before the tourist season began, i.e., when inflation was much higher. If one were to rely on media reports in Croatia this summer, then it is blatantly clear that high prices will most likely deter many tourists from returning to Croatia for holidays in 2024.

Cost of living crisis has been growing faster than before for more than eighteen months in Croatia with energy prices skyrocketing (as elsewhere in the world) during the post-Covid pandemic global energy crisis, 2021 – 2023, food prices as well, and especially just prior and post the adoption of euro as official currency at the beginning of 2023. But wages and pensions failed to follow suit and domestic food production saw a serious slump due to floods, other inclement weather events and pig diseases etc. Certainly. the supply of food was significantly lower than the demand, regardless of whether it was produced domestically or imported.

Governments will usually impose price ceilings when they believe that the equilibrium price in the market is too high and undesirable (e.g., weak consumers cannot afford a necessity, etc.). Good examples of markets where maximum prices could be imposed are food and housing. Food is a necessity and in countries such as Croatia where masses are on low incomes, many people might be unable to afford the quantities required for survival. Hence, governments could impose price ceilings on certain foods.

Last week in Croatian politics has seen the government capping the prices of a limited array of common products, as well as the introduction of the fifth package of economic measures aimed at alleviating the inflationary pressures felt by both the general public and business entities.

As from Monday 18 September 2023 the price freeze for the basic 30 products starts and will be returned to the level before January 1 of this year. All products whose prices will be limited will be marked with a special logo, a new label “Restricted Price“(Ograničena cijena). The decision to freeze prices for about 30 products in such a way was presented as part of a new package of economic measures devised by those in Croatian government and primarily aimed at aiding both individuals and business entities going forward. The package was voted in unanimously by the government.

“According to an already very good and established procedure, we consulted with partners, trade unions, employers, chambers of commerce and trade, pensioners, associations of cities and counties, representatives of the largest banks and retail chains in Croatia. This package is the result of government consultations with many actors “, Prime Minister Andrej Plenkovic said and then commented on the announced price freeze.

“The price freeze will guarantee more favourable prices for certain foodstuffs and will have the effect of slowing down inflation,” said the Prime Minister. “This package primarily aims to maintain a low price of electricity for all citizens, institutions, and businesses. It is a message of economic stability,” Plenkovic said, adding that the package contains measures for both pensioners and families.

“During talks with the government, the retail chains decided to make certain products cheaper, and I am sure that some of them will return some prices to the levels from the end of last year. I expect cooperation from them,” he said, adding that they had agreed with the banks that they would increase interest on deposits.

The price of electricity for households remains the same, but the semi-annual threshold is raised from 2,500 to 3,000 kWh. The price of electricity for the public sector and small businesses remains the same as well. There is no measure for large businesses; that is, electricity supply is to be contracted according to market conditions.

There appears to be a consensus in Croatia, particularly from pensioner umbrella organisations. that the price freeze is welcome, however, they are adamant that freezing prices of only 30 products does not go very far to alleviate living standard crisis especially since many essential products remain at old prices and insist that a much larger number of products would need to be included to make a meaningful mark for those on low incomes.(HRT TV Dnevnik news bulletin 15 September 2023)

Inflation is near a historical high since 1991 independence status of Croatia (during 1980’s inflation in former Yugoslavia exceeded 1000%). Central banks around the world have for a few years now been promising to intervene. However, a critical factor that is driving up prices remains largely overlooked: an explosion in profits. During the last decade, profit margins around the Western nations especially post-pandemic have reached levels not seen before and a number of corporate businesses in Croatia have not been lagging far behind. Bottlenecks in supply and demand chain caused by the Covid pandemic call for rather sudden or fast restructuring of production and I hope producers of food in Croatia will reap the benefits of this situation and not be restricted by EU quotas. Large corporations with market power have used supply problems as an opportunity to increase prices and scoop windfall profits. It would seem obvious that what is needed is a serious conversation about strategic price controls – just like it was after the Second World War. Croatia’s government has last week made a step in that direction, however small.

It is a known fact that leading world economists are divided into two opposing thoughts on the inflation question: one thought promotes the idea that we ought not to worry about inflation since it will soon go away while the other urges for fiscal restraint and a raise in interest rates. But a third option is sticking its neck out: the government could target the specific prices that drive inflation instead of moving to austerity which risks a recession.

“To use a metaphor: if your house is on fire, you would not want to wait until the fire eventually dies out. Neither do you wish to destroy the house by flooding it. A skilful firefighter extinguishes the fire where it is burning to prevent contagion and save the house. History teaches us that such a targeted approach is also possible for price increases.”

All said, price fixing (and wage fixing) can be harmful at any time and under any conditions because it spells out a large step toward a dictated, regimented, and authoritarian economy. Aside from prices, in reality, the main culprit of inflation is in increases in the supply of money and credit. Without a doubt, this is always brought on, directly or indirectly, by governmental policy—especially by governmental deficits which lead to an increase in the supply of money and credit. Croatia’s economy has not been the one to boast of sound operations and directions and people appear to have been living in a constant economic crisis for the past two decades at least. The current HDZ government bears large responsibility for the crisis and, hence, if not directly then indirectly or through “back room dealings” bears responsibility for price increases. Budget deficits and rising foreign debt had become a second skin to Croatia’s national operations, and funds from the European Union have plugged some holes since 2013, but not enough. The new package of economic measures announced by the Croatian government last week for the next six months is worth 464 million euros, in addition to the existing 551 million euros, which is the total value of the measures from the previous package that are in force for one year. The package includes various subsidies to business and additional payments to pensioners on low income, child support payment increases etc. How much of this package will be effective in reducing the supply-demand gap that drives the prices and how much will contribute to budget deficit and national debt is yet to be seen. Certainly, efforts to curb inflation are praiseworthy, but only if they produce positive results for the people truly struggling with the cost of life crisis every day. Ina Vukic

Filed Under: Uncategorized Tagged With: Andre Plenkovic, ceiling prices, Controlling inflation in Croatia, Croatis. Inflation in Croatia, Government measures to reduce inflation, Price control, Price freeze, Restricting prices

Croatia: Major Corruption Scandal Silenced, Judiciary Paralysed

July 24, 2023 by inavukic 8 Comments

The just passed three-day slot, 21, 22 and 23 July 2023, was a historic moment for the Croatian Parliament in that for the first time in more than 30 years of its existence the President of the country (Zoran Milanovic) has called for, convened an extraordinary session of Parliament, making this a precedent of modern Croatian parliamentarianism.

Insults, “hits below the belt”, recriminations, and even grubby personal offences hurled across the chamber of the Croatian Parliament. While hopes for clear resolutions were widespread among the people it was clear from the start that this was not going to solve anything for the better for the people or the country, especially given that President Zoran Milanovic and Prime Minister Andrej Plenkovic have done nothing jointly for the nation except cause distress and alarm due to their inability and/or unwillingness to work with each other as a matter of constitutional protocol and people’s expectations. For the first two days of the extraordinary session insults against the government flew at the empty seats usually occupied by the ruling HDZ party and their coalition parliamentary representatives. Then on Sunday 23 July 2023, in the morning part of the sitting these seats were occupied, almost every one of them and insults hurled both ways – it was when voting on the opposition motion, behind which President Zoran Milanovic stood, was to occur. The vote was for the furthering of clarification of culprits in the massive corruption affair of state-owned HEP selling gas reserves ridiculously cheaply: “that the Government undertake to determine within 15 days who is responsible in the ‘gas for a cent’ affair”, and, “that the government ensures the orderly functioning of the judiciary”. Of course, the vote did not go in favour of the motions or conclusions of the proponents – majority of HDZ and coalition partners came to vote and then go back to sunbaking on some beach or swimming pool.

With majority 77 votes, President Milanovic’s motion/conclusion (presented to parliament via government opposition parties) was rejected by which the Government would undertake to immediately, and within 15 days at the latest, take all necessary measures to ensure the orderly functioning of the judiciary in Croatia. The motion of the President of the Republic, which would oblige the Government to determine within 15 days which institutions and persons are responsible for the financial damage caused to HEP, the state-owned power utility, in the implementation of the Regulation on eliminating disturbances in the domestic energy market, was also rejected.

The conclusions of the ruling majority were, of course (!), accepted, stating adamantly that the convening of an extraordinary session by the President of the Republic of Croatia was unnecessary because the Government is taking all necessary measures to ensure the orderly functioning of the judicial authority, as well as all necessary measures to determine the circumstances in the implementation of the Decree on eliminating disturbances on the domestic energy market. Parliament also rejected the conclusions proposed by the entire opposition, that the Government should be tasked with making a decision by which civil servants and employees will be paid for all days spent on strike, and that within three working days, the members of the HEP board, the members of the HERA board (Croatian Energy Regulatory Agency), the HROTE board (Croatian Energy Market Operator), and the State Secretary for Energy in the Ministry of Economy, Ivo Milatic, would be dismissed. The opposition proposal to pay the strikers wages for the days on strike received 67 votes, and 74 voted against. Unlike the voting on other points, three representatives of the SDSS (Independent Democratic Serb Party) did not participate in the voting for this proposal at all.

As I wrote in my last article, a huge corruption story implicating the involvement, either by omission or active role, of government officials or ministers in the abominably damaging low-price sale of surplus gas reserves by government-owned HEP mainly to private company PPD, seemingly enjoying government favouritism and, hence, destroying any changes of a truly free trade in Croatia, is shaking Croatia. To add to this crisis is the standstill or paralysis of the judiciary amidst unresolved claims for higher wages is also shaking Croatia, the rattling of a massive political crisis seeking the demise of those from the government responsible for this situation. The judiciary is already swamped with hundreds of thousands of unprocessed cases, causing the notoriously frustrating and unreasonable delay of ten to fifteen years in the processing of claims and this standstill due to industrial action of protests will surely list Croatian judiciary as the worst bastion of inefficiency and corruption in a democratic country’s judiciary operations. For months now the protest of the judiciary has lingered on with untold damage to the people and economy. Only matters of life and death are being heard by the courts and everything else is at a standstill for months, even thousands of applications for new business registrations!

During the marathon debate that ensued in the parliament at the weekend, the opposition stated that the Government satisfied judges’ and doctors’ claims for higher wages, while ignoring judicial officers’ and administrative staff ‘ claims without whom the judiciary cannot function. It was pointed out that they work for miserable wages on which they cannot survive, and that Prime Minister Andrej Plenkovic “trains strictness on the weakest, tramples women on strike, that he doesn’t care”. The opposition claims that the judiciary is paralysed, the rule of law does not work, that Croatia now has a constitutional crisis, and that the situation is extraordinary.

As expected, HDZ party members, on the other hand, emphasised that the situation is neither extraordinary nor true that the judiciary is not functioning. Their frequent criticism was that President Milanovic did not appear at the session, even though he is the proposer, calling him a coward and that he aligned himself with the opposition. They defended the government that in recent years it has continuously increased wages and that it is not true that the government is doing nothing or that it has no will to pursue resolution of the judiciary strike situation. They are convinced that the Government will resolve the situation as it has until now and ultimately increase the salaries of civil servants by adopting the new Law on Salaries in Public Administration and regulations.

Government defending its actions was to be expected but the significant unity achieved at this extraordinary session of parliament was not in the votes against President Milanovic’s motions delivered by the ruling HDZ party and its coalition but rather in the almost perfect government opposition unity on display. Rarely has almost the entire Croatian government opposition been united in the past thirty years on issues that are important to citizens and the country as a whole: anti-corruption and the functioning of the judiciary. While the fact remains that Croatia is, ahead of the 2024 mega elections year, well into the pre-elections campaigning, the accentuation of intolerable markers of corruption at high levels in the country as well as the disfunction of the judiciary that must be addressed remain pressing topics for Croatia that is still and visibly struggling to transition fully from communist Yugoslavia.

In Croatia, which was created independent by 94% people vote at May 1991 referendum and the consequent bloody Homeland War that defended such a strong people vote from Serb and Yugoslav Army aggression, nothing significant has changed in relation to the government-owned companies’ management model that what was had in the one-party communist system of former Yugoslavia. The corruption scandals that keep plaguing the public space in Croatia all these years since the secession from communist Yugoslavia have uncovered repeated chaos and robbery in public goods, repeated attempts to bury corruption scandals before they are unravelled and culprits punished – all in all, chaos, and robbery in public administration appear at all levels. If such an odious track record is to continue then the summer break, until parliament sitting restarts in September, will do nothing to address and answer the question people, not just government opposition, are asking: who is responsible for the shocking loss to the public purse due to the perversely cheap sale of government surplus gas to private companies and what are the consequences for the culprits? Whose hands, if anyone’s, have exchanged cash under the table? Ina Vukic

Filed Under: Uncategorized Tagged With: Andre Plenkovic, Communist Yugoslavia, corruption, corruption scandal, Corruption scandals in Croatia, Croatia, Croatia news, Croatian Homeland War, Croatian independence referendum, News, paralysed judiciary, transition from Communism, Zoran Milanovic

Croats Abroad Seeking Correction of the Croatian Constitution

June 7, 2020 by inavukic 8 Comments

Croatian Constitutional Court Building in Zagreb

It’s General Elections time for the Croatian Parliament once again! General Elections will be held on 4^th and 5^th of July 2020. As in previous election campaigns the Croatian and the public in general will hear many promises people want to hear from the previously alternating HDZ (Croatian Democratic Union) and SDP (Social Democratic Party) governments. Be aware and be wary! Bitter and disappointing lessons from their promises have hopefully been learned and Croatian voters, by voting them out, will have the power to reel in real positive changes for the Croatian people.

Real positive changes are needed in processes to stamp out the suffocating corruption in Croatia, which has seen the economy tumbling and hundreds of thousands of young and middle-aged people leaving Croatia in search for a fairer and better life; they have in the past decade gone to Ireland, to Germany, to the UK, to the USA, Canada, Australia… The show of false willpower to deal head-on with corruption around the times of general elections has become as predictable as clockwork when it comes to HDZ and SDP! The latest is the theatrical arrest on 30 May of some 12 people (some leading HDZ figures such as Josipa Rimac, theatrically expelled from the party a couple of days ago) associated with long-standing bribery, lucrative contract recipients favouritism and influencing, illegal dealings, etc., within Croatian Forests (Hrvatske Šume)the government funded and propped company).

Another example of HDZ and SDP former government, since 2010, malfeasance is related to official Croatia’s diaspora and its rights as citizen of the country. Not only has the number of parliamentary seats representing Croats of Bosnia and Herzegovina and the Croatian diaspora been cut from 12 to only 3, but the reasonable ease of access to polling booths at times of elections has been drastically bastardised. Polling places limited to largely inaccessible diplomatic-consular missions and those within community settings such as clubs – banned! Then comes the accessibility issue related to electronic and postal voting.

“Nothing doing!” Nothing is happening!

One of SDP’s leading politicians Arsen Bauk stated recently (April 2020) that SDP is against electronic/postal voting, that it will not support electronic and postal voting for Croatian citizens abroad “because that would increase the influence of Croatians living outside Croatia on election results…”!

HDZ’s Croatia’s Prime Minister Andrej Plenkovic, on the other hand, said a couple of weeks ago that there isn’t enough time now to introduce electronic/postal voting. And yet, he and HDZ party, as part of their election promise for 2016 elections promised to introduce electronic/postal voting!

Do not believe in promises given at elections by HDZ and SDP because the proven fact remains that they do not keep their promises to voters!

Both HDZ and SDP during their past government mandates could have instigated a crucially relevant examination of the relevant parts of the Constitution of the Republic of Croatia affecting Croatians living abroad and their voting rights. They did not! Nor will they because the less Croats living abroad vote, the more powerful are their cronies within Croatia. Regardless of difficult accessibility to polling booths abroad I do trust Croatian citizens living abroad will vote in large numbers at the coming elections.

For about a year now, a group of Croatians, mainly living abroad, has been working on a project designed to bring about changes to the Constitution by the Constitutional court’s examining of the legislation (Act) relating to the election of Parliamentary Representatives for Croatians living outside Croatia. The leading organisers and instigators of this project are the Croatian Academy of Sciences and Arts in Diaspora and Homeland (HAZUDD) with dr Josip Stjepandic as its president and Croatian World Congress (CWC) with Vinko Sabljo, president. Represented by attorney Mato Knezovic from Zagreb the signatories to the case filed in the Constitutional Court in Croatia include members of HAZUDD Board (Josip Stjepandic [president], Ina Vukic [Vice-president], Emilija Herceg [Secretary]), members of CWC Board (Vinko Sabljo [president], Igor Lackovic [Main Secretary] and Diana Vukusic [Treasurer]) and 24 other Croatians living abroad and in Croatia.

We aim to show the grotesque injustice in Article 45 of the Constitution of the Republic of Croatia:

Article 45: “All Croatian citizens who have reached the age of eighteen years (voters) shall be entitled to universal and equal suffrage in elections for the Croatian Parliament, the President of the Republic of Croatia and the European Parliament and in decision-making procedures by national referendum, in compliance with law.

In elections for the Croatian Parliament, voters who do not have registered domicile in the Republic of Croatia shall be entitled to elect three representatives in compliance with law.

In elections for the Croatian Parliament, the President of the Republic of Croatia and the European Parliament and in decision-making procedures by national referendum, suffrage shall be exercised in direct elections by secret ballot, wherein voters who do not have registered domicile in the Republic of Croatia shall vote at polling stations in the premises of diplomatic-consular offices of the Republic of Croatia in the foreign countries in which they reside.

In elections for the Croatian Parliament, the President of the Republic of Croatia and the European Parliament and in decision-making procedures by national referendum, the Republic of Croatia shall secure exercise of suffrage for its citizens with registered domicile in the Republic of Croatia who are outside of its borders during elections such that they may vote in diplomatic-consular offices of the Republic of Croatia in the foreign countries in which they located or in some other manner as specified by law.”

Press release 20 May 2020 issued by the attorney Mato Knezovic on behalf of the 30 Croatians before the Constitutional Court in Croatia included the following:

“Today, 30 Croatian citizens from 6 European countries, as well as Canada, the USA and Australia, submitted to the Constitutional Court of the Republic of Croatia a Proposal for the assessment of Art. 6 and 8 of the Act on the Election of Representatives to the Croatian Parliament with the Constitution of the Republic of Croatia, international treaties and EU anti-discrimination provisions.

Among them are leading members of the Croatian World Congress and the Croatian Academy of Sciences and Arts in the Diaspora and the homeland.

As is a well-known fact, Croatian citizens who do not reside in the Republic of Croatia have the right to 3 members of the Croatian Parliament, and their polling stations are exclusively diplomatic and consular premises of the Republic of Croatia abroad. The Ministry of Administration has 883,042 registered voters who do not reside in the Republic of Croatia. Their percentage is 19.15%, and they elect only 3 Representatives, or 1.98% of the total number of Representatives.

At the same time, the Czech and Slovak national minorities elected a member of parliament from only 1,590 voters. The proposal, which is based on an expert analysis of three professors of constitutional and public law (Marc Gjidara, Zvonimir Lauc, Mato Palic), points to several decisions of the Constitutional Court and the European Court of Human Rights on discrimination against these Croatian citizens.

It also shows the illegality and unconstitutionality of other provisions of the said law. Since the said law and constitutional provisions, which limited the number of representatives of the said Croatian citizens to 3, have no basis in the basic constitutional principles and international legal acts, the applicants consider that they are severely discriminated against and that such a law indicates the illegitimacy of the entire electoral process, basic constitutional principles, European acquis communautaire and international treaties to which the Republic of Croatia is a signatory.

By this act, Croatian citizens who do not reside in the territory of the Republic of Croatia show that they are not willing to accept the constant harassment, insult and change of laws to their detriment, but also to the detriment of overall Croatian national interests and rights…”

We hope to succeed in this application to the Constitutional Court in Croatia since HDZ and SDP governments have not moved a finger to remove the grotesque injustices towards Croatians living abroad. Wish us luck! But in any case, we will have a reply from the Constitutional Court as to why if our application is not successful. Then, we can move onto the next platform available within the European Union and pursue justice. It is not just a matter affecting Croatians living abroad, it is, more to the point, a matter for all Croatian people as Croatia is for years seeking to rely on Croats from abroad to return to Croatia and thus help it become a better place to live in. Ina Vukic