Under the new legislation, entrepreneurs, who meet criteria of commercial banks and the Croatian Bank for Reconstruction and Development (HBOR), can count on state guarantees of up to 30 percent of the loan's amount with the upper limit of HRK 50 million.
The new law should remove obstacles for initiating many private sector projects, Finance Minister Martina Dalic told the government's session today, announcing the reduction of fees which entrepreneurs pay for guarantees.
The guarantee fund will be with a budget of one billion kuna, Prime Minister Jadranka Kosor said.
The government also proposed changes in calculation of coffee taxes, which would not alter the levy burden on producers, according to the finance minister.
A final bill on co-operative societies was sent to parliament, which would enable an increase in the number of founders of co-operatives and revoke the obligation of payment of membership fees in the Croatian association of co-operative societies.
Economy Minister Djuro Popijac said that Croatia's tradition in co-operative societies was 150 years long. Currently there are more than 2,600 co-operatives.
The Kosor cabinet today adopted an operational programme for the development of the wood processing, timber and furniture sector from 2011 to 2014, with subsidies planned in the amount of HRK 284.5 million.
Deputy Prime Minister and Regional Development and Forestry Minister Bozidar Pankretic said that the previous 2006-2010 programme had enabled the allocation of HRK 222.4 million for 717 investment projects in the sector.
Timber and furniture production accounts for 7 percent of Croatia's foreign trade and makes up 0.9 percent of Gross Domestic Product, employing 21,000 people.
This sector increased its export by 8 percent on the year in 2010, while imports went down by 18 percent.