Croatia has almost a complete legislative framework for market competition, and it now has to adopt another two decrees to fully adjust the national legislation to the acquis communautaire, experts from the Croatian European Integration Ministry told Hina recently.
They stress that the acquis communautaire is something which constantly undergoes changes, and a possibility cannot be ruled out that Croatia will have to do some more adjustments until its admission to the European Union.
The market competition policy is one of 29 chapters of the acquis communautaire which are the topics of entry talks between a country-candidate and the European Union. That chapter comprises the required anti-trust policy and control over state support.
The legislation of a country-candidate in the anti-trust policy must be fully harmonised with the EU standards before the country in question enters the European bloc, as this is seen as a key element of the functioning of the internal market of the concerned country.
Croatia adopted the first law on its market competition policy in 1995, but this act was not harmonised with the EU's acquis, although it included rules for market competition.
Upon signing the Stabilisation and Association Agreement (SAA), with the EU, Croatia assumed the obligation of the full harmonisation of the rules in question with the acquis. The Sabor adopted a new law on the matter in July 2003, the enforcement of which began on 1 October the same year.
The text of the new law was reviewed by German consultants as well as by Croatian law and economics professors. At the end of this process, the European Commission also okayed the new law, the ministry's experts said.
A number of by-laws and decrees have been adopted in order to enhance the implementation of the said law, and now Croatia needs to pass another two decrees by early 2005 to complete the legislative framework in this field.
The Agency for the Protection of Market Competition, as an independent body, has a pivotal role in the implementation of the law. During the negotiations with the EU, Croatia will have to find a solution in connection with this agency which, according to the national system, now can only point out irregularities in the market competition but has no powers to impose fines on perpetrators, what is still within the jurisdiction of relevant courts.
Croatia has even much work to do in the field of state subsidies. The European Union does not allow the granting of state support only for the purpose of saving ailing companies and maintaining jobs. The state support can be justified only if this is in the interest of the EU or when the company or the sector have good prospects on the market.
Last year, the Croatian parliament passed a law and decree on state subsidies which meet European norms. There are differences, however, in the amount and the structure of subsidies in the country and the EU.
According to figures released by the Agency for the Protection of Market Competition, in 2003 state support accounted for 3.2 percent of Croatia's Gross Domestic Product as against 0.39 percent of GDP in the EU.
The differences are even bigger in the structure of the state support, as in the Union support for horizontal goals (research and development, environment protection, small and medium-sized businesses, employment and training) made up 51 percent of all sorts of subsidies, while in Croatia this kind of state support made up only 6.9 percent.
Croatia's subsidies for specific economic sectors such as transport, tourism or shipbuilding accounted for 51.2 percent of all subsidies as against 21 percent in the EU.
That's why a lot of work should be done in Croatia to adjust the structure of state aid to the EU norms so as to be able to grant 'lower and more efficient subsidies' which the EU regards as an important part of the effective market competition.