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20261012 063000 UTC
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[00:00:00] Moody's confirmed Croatia's credit rating at A3
[00:00:03] and maintained stable outlook, highlighting the quality
[00:00:06] of institutions, responsible fiscal policy and continued
[00:00:10] economic growth. What exact reforms is Croatia implementing?
[00:00:14] The guest of the new day is Zvonimir Savić, Prime Minister Plenković's advisor for
[00:00:17] economy.
[00:00:20] The scandal in Germany is growing, how did August Hening, the man
[00:00:24] who spent seven years at the head of Germany's most important
[00:00:27] intelligence service BND, where he... had
[00:00:30] these funds can continue access to the most strictly guarded state secrets, Srećko
[00:00:34] Germany for a new day. Matić speaks live from
[00:00:36] Matić.
[00:00:39] Public consultation on anchor prices begins, which activities
[00:00:43] will be excluded from the obligation to publish them. Minister
[00:00:47] of Economy Šušnjar said that nothing is set in
[00:00:50] stone. We are following the development
[00:00:52] of events.
[00:00:55] American President Trump suddenly announced that a ceasefire on energy
[00:00:58] infrastructure between Ukraine and Russia has been agreed upon, but there are
[00:01:01] no official confirmations from Kiev and Moscow. Ukrainian President Zelensky
[00:01:05] caught off guard, we are live in Kiev.
[00:01:30] representative break.
[00:03:55] Good morning and welcome once again to New Day. Prime Minister Andrej
[00:03:58] Plenković presented the planned budget rebalance at Friday's government
[00:04:02] session, which increases expenditures by
[00:04:04] 745 million to a total of
[00:04:07] 40.6 billion euros. Additional funds will be
[00:04:11] directed to pensions, social measures, healthcare, education, and
[00:04:14] the energy assistance package for citizens. Plenković emphasized
[00:04:18] that the budget deficit should remain at 2.9%
[00:04:22] of GDP. He announced that Croatia's GDP this year
[00:04:25] should exceed 100 billion
[00:04:28] euros for the first time.
[00:04:31] "The key message of this rebalance is
[00:04:34] that in circumstances of various pressures,
[00:04:37] uncertainties, external shocks, we
[00:04:39] continue to protect the standard of citizens, invest in development
[00:04:43] and security, and at the same time maintain
[00:04:46] stable public finances with
[00:04:50] responsible policy of their
[00:04:52] management,
[00:04:56] what we certainly have the opportunity to emphasize is the fact that..." economic
[00:05:00] activity this year 2026 in
[00:05:03] Croatia will be significantly higher than the European Union average. You had
[00:05:06] the opportunity to see, uh, according to reports in the first, first
[00:05:10] half, the first two quarters, that this lady. economic activity was on average
[00:05:14] 1.9% higher compared to the same period last year,
[00:05:17] however, we believe that the third and fourth quarters will bring its acceleration
[00:05:21] and uh crossing the 2% mark in any
[00:05:24] case.
[00:05:28] We heard, therefore, messages from the last government session, and over the weekend
[00:05:31] another confirmation of Croatia's high credit rating from Moody's
[00:05:35] with a stable outlook came. But
[00:05:39] we'll talk about that and everything that led to
[00:05:43] such an assessment and the general state of the Croatian economy with our first
[00:05:46] guest this morning, Mr. Zvonimir Savić, Prime Minister
[00:05:50] Plenković's advisor for economy. Good morning and welcome to our program.
[00:05:53] Good morning to you and everyone watching us. Let's start with
[00:05:57] this news that arrived, if I'm not mistaken, on
[00:06:00] Saturday, uh, Moody's, another
[00:06:03] confirmation, stable credit rating. Uh, that's
[00:06:06] right. Usually, rating agencies, in this case Moody's, one of the three largest
[00:06:10] in the world, at the end of the week, on Fridays and Saturdays, publish
[00:06:13] either rating changes or other information
[00:06:17] regularly. Thus, for Croatia, this news arrived that Croatia's very
[00:06:20] high rating of
[00:06:23] A3 with stable outlook was confirmed, which in
[00:06:26] translation actually means that Croatia is perceived as
[00:06:30] a stable country with relatively low risk, i.e., low
[00:06:33] risk for debt repayment.
[00:06:36] This is very good, very good news, because it actually confirms
[00:06:40] everything we've done so far, everything the government has done so far.
[00:06:43] What is important to emphasize to our viewers is that Moody's, one of
[00:06:47] the three leading agencies in the world that assign ratings,
[00:06:51] has been doing so for a hundred years and is completely independent in its
[00:06:55] assessments. What is good is that they highlight some things
[00:06:58] that are good for Croatia, because otherwise it wouldn't have such a good, such a good
[00:07:02] rating. They emphasize three things, you also
[00:07:06] touched on some of them, so the first
[00:07:09] important thing they assess our institutions, i.e., Croatian
[00:07:13] institutions as highly efficient, which is
[00:07:16] best reflected in the implementation of our national recovery and
[00:07:18] resilience plan, secondly a stable, i.e., solid
[00:07:22] fiscal position, i.e., maintaining
[00:07:25] the budget deficit below 3% of GDP
[00:07:28] and a decrease in the share of public debt in GDP, and
[00:07:31] the third thing is strong economic growth, i.e., the
[00:07:35] movement of our GDP which for several
[00:07:38] years in a row has been practically twice as fast as
[00:07:41] the average. growth of the European Union and two to three
[00:07:45] times faster than the average growth of the Eurozone,
[00:07:48] such a, such a tendency will continue, so we
[00:07:51] believe that in the foreseeable future, not only will this high, high
[00:07:55] rating be maintained, but over time it will
[00:07:58] be increased, what exactly does this rating mean
[00:08:01] for the citizens of the Republic of Croatia in
[00:08:05] the context of financing and refinancing state
[00:08:08] obligations? Yes, that's a very good question, what I would also like to
[00:08:11] say about the rating is the trend of Croatia's rating in this case the Moody's agency
[00:08:15] and this maintaining of a high level, I would first like to point out that
[00:08:18] Croatia since the corona virus pandemic, i.e. since February
[00:08:22] 2020, has even increased its credit rating by five
[00:08:26] levels, why am I saying this, because in that period,
[00:08:29] i.e. from February 2020 until today,
[00:08:33] only 37 countries in the world recorded any rating growth,
[00:08:37] only 11 European Union countries recorded
[00:08:40] rating growth at all in that time.
[00:08:42] And Croatia is only one of two countries in the world
[00:08:46] that has recorded a growth of five levels in those five years.
[00:08:49] It is also important to say that Croatia with this
[00:08:53] rating we now have is in a situation where 11
[00:08:56] European Union countries have the same or lower rating than
[00:08:59] we do. And what does that bring to citizens? It brings the following:
[00:09:03] The rating is a perception of the stability
[00:09:06] of the state to repay debt. If the perception is better, the risk of debt repayment
[00:09:09] and the probability of default is much lower. This actually means lower
[00:09:13] interest rates, lower borrowing. Croatian, uh, when
[00:09:17] you look at the market, Croatian ten-year bonds
[00:09:20] have a so-called spread, uh,
[00:09:24] compared to other European Union countries, it's quite good,
[00:09:27] so one Poland borrows more expensively than us, Romania, Bulgaria,
[00:09:31] Hungary, uh, borrows more expensively than us,
[00:09:34] Slovenia slightly more favorably, we are exactly at the same level as
[00:09:38] France, what does that mean for our citizens, first, the state. borrows
[00:09:41] more favorably, i.e., cheaper, that means in the future a smaller amount
[00:09:45] of funds must be allocated to debt repayment, a larger amount
[00:09:48] of interest, which actually spills over into a more favorable situation in
[00:09:52] the budget, savings of certain funds, so that the state can finance
[00:09:55] other needs that are important to all of us and important to all of us, so more
[00:09:58] money remains for our needs, mm, what does that, on the other
[00:10:02] hand, mean as a signal to foreign investors, so when a state has
[00:10:06] a rating like Croatia has, is that
[00:10:10] a signal? to foreign investors to rush
[00:10:13] into such a state, of course, there is a good investment climate and how
[00:10:16] Croatia stands in terms of direct foreign investments, so-called FDIs,
[00:10:20] yes, Croatia is doing well there, so you have already given. part of the answer,
[00:10:24] so the perception of risk is low, which means that investors who seek
[00:10:28] security and stability for their investments, especially in these
[00:10:31] times of uh geopolitical instability, actually
[00:10:35] direct their funds to countries that are safer. It is true that this brings lower
[00:10:38] returns, but in these times it is important for investors
[00:10:41] to achieve returns. Croatia is doing well here, as an
[00:10:45] example, the cost of borrowing
[00:10:48] uh compared to Germany, why Germany, Germany has benchmark bonds on
[00:10:51] the market before... two years ago
[00:10:55] the difference between the price of Croatian borrowing and German
[00:10:58] borrowing was approximately 1.2% in basis points,
[00:11:01] three years ago it was 1.9% in basis points,
[00:11:04] now currently on the market that difference is 0.4, that
[00:11:07] means that Croatia is perceived safely, and this credit
[00:11:11] rating which has been confirmed by Moody's, by
[00:11:14] definition it is above average quality
[00:11:17] rating and low risk, so according to their
[00:11:21] definitions with stable outlook. What I would like to emphasize,
[00:11:24] Moody's is not the only credit rating agency,
[00:11:28] Standard & Poor's and Fitch, so the other two, also keep
[00:11:31] Croatia roughly at that, roughly at that level, so in that
[00:11:35] context, and you see when Croatia borrows on international markets,
[00:11:38] all our issues are actually consumed, fully bought, that
[00:11:42] is also proof of the perception of foreign investors, and
[00:11:46] also every time the state issued securities and
[00:11:50] the public and population bought them, the interest was always much
[00:11:53] higher than the need, which also confirms
[00:11:57] what Moody's stated, that is
[00:12:00] the efficiency and stability of institutions, that Croatian
[00:12:04] institutions, which are actually all of us, you and I,
[00:12:07] everyone who watches, people work somewhere in those institutions, such a
[00:12:11] good perception and the result of that is more favorable borrowing, and as I said
[00:12:15] later, it spills over into greater available
[00:12:18] budget funds to finance some of our public needs, does that lead
[00:12:22] to foreign investors entering Croatia, not only through
[00:12:26] the financing of state bonds and through
[00:12:28] state finances, but truly in the sense of, therefore,
[00:12:32] how direct public, sorry, direct foreign investments are usually perceived,
[00:12:35] i.e., I don't know, some investor comes and builds
[00:12:39] a factory and employs 200, 300, 500 people, is that
[00:12:42] directly causally, consequentially linked? It is partly linked, so
[00:12:46] such rating agencies, their reports and the monitoring of a given
[00:12:49] country are taken into account by foreign investors, so.
[00:12:53] it is important for them, among other things, to have predictability of some
[00:12:56] policies that the government and state implement and tax policies and
[00:13:00] policies for investors, in such a way they get information
[00:13:04] about the safety and stability of the country, of course, that is not the only decision, of course,
[00:13:07] investors also look at traffic connectivity, location
[00:13:11] of a certain country, transport costs, they look, in
[00:13:14] the end, at the potential of the population, so in which area they will
[00:13:17] invest, but this is an important element because in many investments,
[00:13:21] especially large ones, it is... to some extent a decisive element, if
[00:13:25] a country has a certain level of risk, some
[00:13:28] investments, some companies, some activities will not even
[00:13:31] come to that country, will not even consider that, no, they don't consider it. Similarly, when
[00:13:35] investing, for example, at a certain rating level, there are
[00:13:38] investors or central banks that do not invest in
[00:13:42] the securities of a country that is below a certain rating
[00:13:45] level, especially if that country has a non-investment rating.
[00:13:48] We were on a non-investment rating a few years ago, but
[00:13:52] the current one. actually, I repeat, it increases
[00:13:56] the uh fund or space for investors who want to invest and
[00:13:59] develop in Croatia.
[00:14:03] Let's move on to what you said was partly the reason for
[00:14:07] this credit rating, among other things, that is the national
[00:14:10] program of uh recovery and resilience, that is, the implementation
[00:14:13] of reforms related to
[00:14:16] NPO. How is Croatia doing there, where is Croatia in relation to
[00:14:19] other EU countries? Yes, this is a good question for comparison, because it's always good
[00:14:23] to see how we stand among others. So, very briefly, our national recovery
[00:14:27] and resilience plan, that's a mechanism from
[00:14:30] the European Union from which we use funds just like any
[00:14:34] other European Union country. This is a consequence of
[00:14:38] the coronavirus crisis, and countries were given certain funds
[00:14:41] to invest in public investments to prevent
[00:14:45] future crises or mitigate them, or to make the country more resilient.
[00:14:49] In this context, Croatia has 10 billion
[00:14:51] euros available. So far, if you look at the last few years,
[00:14:55] Croatia has always been among the top three EU countries in implementation, so
[00:14:59] I'm not saying that, nor is the government, the European Commission says
[00:15:03] it. This means, in translation, that in order for Croatia to be able to use those 10
[00:15:07] billion euros, it must implement certain reforms across
[00:15:10] the entire spectrum of policies
[00:15:12] and implement investments. So far, Croatia
[00:15:16] has received 7.3 billion euros in payments
[00:15:19] from these 10.10 billion euros in eight
[00:15:22] installments based on the implementation of all,
[00:15:26] I repeat, all 100% of reforms and 100%
[00:15:29] of investments, which are the basis for us to receive these 7.3
[00:15:32] billion euros so far. Compared to other
[00:15:35] countries, Croatia is doing very well. As I already mentioned, Croatia has received eight
[00:15:39] installments of these 7.3 billion euro payments, and Croatia is
[00:15:43] the only EU country that has received 100% of the first eight installments
[00:15:47] requested from Brussels for payment, which is actually
[00:15:50] a motivation for the government, and ultimately for the ministries that
[00:15:53] implement it, because the funds come to Croatia, and investments are implemented
[00:15:57] that are related to education,
[00:16:00] healthcare, energy, infrastructure, this is
[00:16:04] a great added value so that
[00:16:07] to be drawn, and the implementation
[00:16:11] of reforms is important. Moody's in its
[00:16:13] report confirmed the following, that Croatia has successfully implemented
[00:16:17] all reforms in the last few years and at an intensity that is higher than
[00:16:20] expected. This is actually somewhat encouraging, not only for the government,
[00:16:23] but actually for the institutions that implement all of this.
[00:16:27] Reforms have been implemented in the healthcare
[00:16:31] sector, in the education sector. I would highlight the education
[00:16:34] and science sector as the most important, because
[00:16:38] a reform related to adaptation for single-shift,
[00:16:41] i.e., all-day schooling, is being implemented. That is a huge reform, it is something that has not been seen for the last
[00:16:45] over 100 years, so that our entire system is reoriented and
[00:16:49] adapted so that our children in elementary school can have classes in
[00:16:53] one shift and all day. So, in order for
[00:16:56] that to be achieved, i.e., that reform, it is necessary, of course,
[00:16:59] to invest in facilities, currently contracts have been signed for
[00:17:03] approximately 1900 classrooms in Croatia that must be
[00:17:06] ... either built or renovated or equipped,
[00:17:10] and also the reforms were related
[00:17:12] to uh to the system of education and upbringing
[00:17:16] in kindergartens, for example, so many kindergartens have been built
[00:17:20] to increase the number of places, i.e., capacities by
[00:17:23] 21,000, we have reforms related to
[00:17:26] entrepreneurship, Croatia has implemented four action plans
[00:17:30] in which it reduced parafiscal and administrative
[00:17:33] charges, there are exactly 493 measures
[00:17:37] which are... targeted with uh with an amount
[00:17:40] of reduction, a total reduction of burdens, I repeat
[00:17:43] administrative and parafiscal by approximately 600 million
[00:17:46] euros annually for entrepreneurship, these are some examples, Croatia has
[00:17:50] successfully done that, that is actually a goal we want to achieve, which is to
[00:17:54] continue this recovery and resilience plan to the end, ultimately
[00:17:57] for Croatia to consume all the available amount.
[00:18:01] How important is it in such reforms, like this one on
[00:18:04] education that you just mentioned as an example. It is important and possible
[00:18:08] to take into account a kind of balance between hardware
[00:18:12] and software, so hardware on one side, let's colloquially call it
[00:18:15] schools, classrooms, equipping classrooms,
[00:18:18] uh, enabling capacities for conducting single-shift
[00:18:22] classes, on the other hand software would probably be people,
[00:18:25] i.e. teachers, professors, their working conditions, their
[00:18:29] salaries, uh, their level of education, curriculum quality and so
[00:18:32] on and so forth, do both enter the national
[00:18:36] program in... the reforms you are talking about or are they
[00:18:40] primarily focused on hardware? Good that you asked, it does, it does
[00:18:43] that, so it does in several ways, first how much it
[00:18:46] must, must be prepared, i.e., adapted, adapted so that
[00:18:50] our children can even be in single-shift classes, look now on average, our
[00:18:54] children in elementary school go home around 12 o'clock, what happens
[00:18:57] in the afternoon, either they engage in tutoring, children are free,
[00:19:01] they have nothing to do, parents are worried, so the goal is for children to be in
[00:19:05] school longer, have a few extra hours. during which, among other things, they would
[00:19:09] write homework, sports and school activities would increase, that's
[00:19:12] one thing and the other thing, the reform covers,
[00:19:16] i.e., a new pay model in public administration has already been implemented, so
[00:19:20] the new pay model also covers education,
[00:19:24] salaries have significantly increased, so in that way and ultimately
[00:19:27] motivates teachers and educators who do this,
[00:19:31] all with the aim that our children, as time goes on and
[00:19:34] due to better working conditions for both teachers and children.
[00:19:38] by increasing the number of hours spent in the education
[00:19:40] system, we reach a situation where we start to improve in
[00:19:44] terms of, i.e., in the ranking of PISA tests, so we do everything in
[00:19:48] such a way that this is not unknown in
[00:19:51] the world, what created a problem for us and why we even decided
[00:19:55] on such a mechanism of all-day
[00:19:58] schooling, the reason is simple, our children in elementary school
[00:20:01] spend approximately 50% less time
[00:20:04] in the education system than the European Union average,
[00:20:08] that is something we don't want, so we want to prepare our children
[00:20:12] for growth and for continuing education, and ultimately
[00:20:15] to be ready for the labor market, uh,
[00:20:19] critics when talking about the reform program, the national program, and
[00:20:22] the implementation of reforms say, a significant part of these reforms is being implemented
[00:20:26] "on paper", so to speak, laws are being passed, regulations are being passed,
[00:20:30] something is being organized at the level of bureaucracy, administration,
[00:20:34] but actually tangible concrete changes on the ground are not
[00:20:37] happening or are not happening enough, and healthcare is often
[00:20:41] taken as an example, there are still large debts to
[00:20:44] wholesalers, pharmacies, waiting
[00:20:47] lists, money draining from the system on all sides, are these criticisms
[00:20:50] justified, how much does the national recovery
[00:20:54] and resilience program, i.e., the reforms being implemented
[00:20:57] concretely change the situation on the ground? If the criticisms are
[00:21:00] directed at the implementation of reforms that were defined in the recovery
[00:21:04] and resilience plan, which was defined back in 2020-
[00:21:07] 2021, they absolutely and completely do not stand, I don't
[00:21:11] have to say that, let them just look at the European Commission's report,
[00:21:14] because Croatia has committed to implementing
[00:21:18] 78 reforms at some intensity, I know that
[00:21:21] the reform fund cannot cover absolutely everything that our country
[00:21:24] needs, however the level of reform was
[00:21:28] incredibly ambitious, again I'm not saying that, the reports of the European
[00:21:32] Court of Auditors say that, which a couple of years ago conducted an
[00:21:35] analysis of our recovery plan and the plans of other countries,
[00:21:39] they found that Croatia has largely covered
[00:21:42] the necessary and needed reforms. The 78
[00:21:46] reforms listed in the recovery and resilience plan
[00:21:50] have been fulfilled according to the Commission's assessment. Based on that, we also received funds
[00:21:54] from the recovery plan, 100% fulfillment,
[00:21:57] among other things, waiting lists were covered, so at the beginning
[00:22:01] we realized that one of the problems in healthcare, I repeat one of, so
[00:22:05] the recovery plan we detected things that we must
[00:22:09] solve that are important, for example, waiting lists, I know because I personally looked at it and
[00:22:12] followed it, we established a certain fund, i.e., a certain
[00:22:16] number of average days for
[00:22:19] a particular type of examination. We had to wait, we defined
[00:22:23] the number of days and then the entire system adapted to that, so
[00:22:26] the Ministry of Health, like a wave in
[00:22:30] hospitals, you might remember, a year or two ago, there were many reports from hospitals
[00:22:33] that organized and reorganized, they worked
[00:22:37] on Saturdays, directors of some hospitals were on your TV from
[00:22:40] the north of Croatia to the south, where
[00:22:43] by increasing the number of hours or additional engagement, and
[00:22:46] telemedicine, they influenced the reduction of the number of
[00:22:50] days of waiting for certain diagnostic
[00:22:53] examinations, that's number one, because a lot is related to actually
[00:22:56] reorganizing work, and number two, where
[00:23:00] equipment or devices were missing, we financed
[00:23:04] and purchased them. For example, in Croatia,
[00:23:07] over 20 linear accelerators were purchased, so
[00:23:10] quite expensive diagnostic equipment for six, i.e.,
[00:23:13] seven hospitals in Croatia, so from Zagreb to
[00:23:17] Zadar, where in such a way, so... with this expensive diagnostic
[00:23:21] equipment, the goal was to reduce the number of days in diagnostic
[00:23:25] examinations for the most seriously ill patients, that's just one, just one example, I know that
[00:23:29] there are a whole series of reforms that still need to be implemented, but I repeat, everything
[00:23:32] that is defined in the recovery and resilience plan, where it
[00:23:36] can be defined by a precise concrete figure of what has been
[00:23:39] done, has actually been fulfilled, which I think is very good
[00:23:42] and that it is somehow an obligation, if I may say so freely, to us in the government,
[00:23:46] and to all actors in the ministries, to continue
[00:23:50] at such a pace, at such a pace. What about
[00:23:53] the other usually the most frequently mentioned reform
[00:23:56] when talking about Croatian reforms in the broadest sense, that is, of course, pension
[00:24:00] reform, to what extent is it covered by the
[00:24:03] reform program and to what extent has the reform program affected that
[00:24:07] famous ratio, we know that Croatia at one point almost reached
[00:24:10] a one-to-one ratio, that is, working population and
[00:24:13] retired population, what is the situation here regarding pension
[00:24:17] reform, pension reform in many European Union countries
[00:24:21] was such that they didn't even want to include any
[00:24:24] elements of pension reform in the recovery and resilience plan, primarily
[00:24:28] the French, for example, we did include some measures,
[00:24:31] but we also decided that we couldn't put everything into the
[00:24:35] recovery and resilience plan, because there was no longer a need, or rather, there weren't enough
[00:24:39] funds from the European Union to be able to
[00:24:42] draw on, so we decided to do it nationally,
[00:24:45] nationally. This ratio you mentioned is actually a consequence of some
[00:24:49] past times. But also the fact that
[00:24:52] on average a Croatian pensioner
[00:24:55] retires significantly earlier than the average
[00:24:59] in the European Union, so the difference in our
[00:25:02] average pensioner's age when they retire,
[00:25:05] that is, for a full old-age, or
[00:25:08] age, age pension, is about 10 or 12 years less
[00:25:11] than that of some pensioners who are in Nordic countries,
[00:25:15] so that's something that takes a long time, a long time to
[00:25:18] change. Also, we are burdened by the fact that a relatively
[00:25:22] small percentage of pensioners are those who are
[00:25:26] retired either due to years of service
[00:25:29] they worked, or due to reaching the age
[00:25:33] of life, that's about 12 to 15% of pensioners, and of course, that
[00:25:37] creates a great burden on the pension system, however
[00:25:40] Croatia has long developed the second, second and third
[00:25:43] pillar of pension, so in that way, it tried to do something, what
[00:25:47] the government can do, so it's exactly the pension system,
[00:25:50] index, index pensions, but also
[00:25:54] discourage early retirement, that is,
[00:25:57] encouraging longer, longer service, these are some things we can
[00:26:01] already do. Something has been done, for example, at the
[00:26:04] request of the employer people can request an extension of service, if
[00:26:08] I can put it that way, or, say, stay for one, two or three more years after the age
[00:26:12] limit for retirement, of course, if both sides agree, so pension
[00:26:15] reform is something that is burdening
[00:26:18] the system now, but in the future, however, everything we can
[00:26:22] do legally, because I repeat, the biggest problem is that relatively
[00:26:25] large number of pensioners in relation to the active working
[00:26:29] population, uh, none of this, or at least... "a significant
[00:26:32] part of this would not have happened without European funds, European
[00:26:36] money, the NPO, and of course everything that follows
[00:26:39] from it, and how that
[00:26:42] multi-year budget will look is being defined now, the Irish
[00:26:46] presidency came out with a proposal a few days ago
[00:26:50] on Thursday, if I'm not mistaken, we have a meeting of
[00:26:53] the European Council where it will be on the table and where such councils usually last
[00:26:57] until the early hours, uh what does the Irish
[00:27:00] proposal bring us?" "The Irish proposal, sorry, and what does that proposal
[00:27:04] mean for Croatia? Well, you've already given half the answer, so exactly, the Irish were
[00:27:08] diligent, so they actually published it on Saturday, it's the so-called
[00:27:11] negotiating box, which means the Irish presidency, now it's their
[00:27:15] turn, the negotiating box that actually defines in more detail
[00:27:19] the concept of the future European budget, specifically
[00:27:22] with numbers, when I say numbers, that implies
[00:27:26] uh the European budget for the seven-year period from
[00:27:29] 2028 to 2034,
[00:27:33] negotiations on that multiannual financial framework, that is, the European
[00:27:36] Union budget, will last a little over a few months, certainly deep into
[00:27:40] next year, we as a country and government are already
[00:27:43] involved in that, of course, exactly at the end of this week there will be another
[00:27:47] meeting, a meeting in Brussels. The Irish
[00:27:50] conceived it in such a way that they
[00:27:52] reduced the total MFF, that is, the multiannual
[00:27:56] financial framework, i.e., the European Union budget compared to
[00:28:00] the initial proposal of the European Commission from
[00:28:03] 2025, they reduced the entire volume by about
[00:28:06] 8%, which is a significant amount,
[00:28:09] so it, of course, cascades down to
[00:28:13] all policies that are financed. What is most important to us as
[00:28:17] a country is the so-called regional, or
[00:28:20] cohesion policy and agricultural policy, these are the two most important
[00:28:23] things for us, I say this because Croatia from the beginning, not only
[00:28:27] Croatia, but exactly 16 other countries strongly
[00:28:30] advocated for the preservation of
[00:28:32] funds for cohesion, that is, for
[00:28:36] regional policy, i.e., for funds from which we will later, or in
[00:28:39] the future, receive funds from European Union funds,
[00:28:43] that part has also been affected by a certain, certain
[00:28:46] reduction, our intention, intention and goal is for that reduction
[00:28:50] for Croatia to be as small as possible, for now, according to
[00:28:54] the Irish proposal, if it is taken into account, we have to some extent
[00:28:57] succeeded, so we have managed, let's say, in quotation marks, to save
[00:29:01] it for now. In these negotiations, the amount
[00:29:05] allocated to Croatia is approximately, that's number one, and
[00:29:08] number two, due to the reduction of the total
[00:29:11] budget, the reduction, or the proposal for a reduction of the total
[00:29:14] budget by these 8% that I mentioned, it also
[00:29:18] proportionally reduces the contributions
[00:29:22] that countries should pay to the European budget, so in that
[00:29:25] context, compared to the initial proposals, Croatia should
[00:29:28] contribute somewhat less, negotiations are not over, it will take some more time.
[00:29:33] Our goal, and I believe that we will succeed in it, is
[00:29:37] to retain and increase the fund of resources allocated
[00:29:41] to cohesion, i.e., regional policy, so that in the future
[00:29:44] in this studio, whether it's me or someone else in a few months or a year, we can
[00:29:48] talk about the topics of how many resources Croatia has
[00:29:51] at its disposal, I repeat, there will be significant resources,
[00:29:54] we will fight for it, European funds will not run dry, it's just
[00:29:58] a question of the amount we will have at our disposal from
[00:30:02] 2028 onwards, then we will talk about where
[00:30:06] we will direct these funds, we just briefly talked about the recovery
[00:30:10] and resilience plan, which is an instrument that
[00:30:14] Croatia, as I emphasized several times earlier, not according to my
[00:30:17] words, but according to the commission's estimates, Croatia uses it very well
[00:30:21] on that wave of good use of funds that we direct to
[00:30:25] healthcare, to education, to
[00:30:28] justice, to education, ultimately
[00:30:31] to the reconstruction of the city of Zagreb. So energy efficiency,
[00:30:34] transport, for example, the new trams that run through the city of Zagreb, all of that
[00:30:38] is financed from the recovery and resilience plan, so that's the recovery
[00:30:41] and resilience plan, new buses that will run through the city of Zagreb, through
[00:30:45] Virovitica and other cities, all of that is financed from the recovery
[00:30:48] and resilience plan, i.e., European funds, and bearing in mind that
[00:30:52] the Croatian administration, government ministries have experience in implementing the recovery
[00:30:56] and resilience plan, I believe, I hope that Croatia, i.e., all of us in the end.