1. ACTIVITIES OF GOVERNMENT, MINISTRIES AND STATE INSTITUTIONS
Task force for Viktor Lenac shipyard holds session
ZAGREB, July 2 (Hina) - A task force in charge of resolving the new situation in the Viktor Lenac shipyard held a session in the government headquarters in Zagreb on Monday and decided that teams of legal experts should be set up to consider all the relevant documentation about the Rijeka-based shipyard and a recent decision of the local High Commercial Court about the revocation of the proposed bankruptcy plan.Based on appeals filed by the shipyard's creditors, the High Commercial Court last Thursday quashed a ruling of the Commercial Court from March this year accepting the company's bankruptcy plan and decided to return the shipyard's bankruptcy plan to be drawn up anew.
Croatian Prime Minister Ivo Sanader attended the beginning of today's session to reiterate his cabinet strong support to the shipyard's employees.
According to a press release from the government, the Sanader cabinet offer all the available legal and material assistance so as to help the shipyard to pull itself from bankruptcy.
The task force is to hold another session next week.
Economic and Social Council supports draft revised budget for 2007
ZAGREB, July 2 (Hina) - The Economic and Social Council (GSV) unanimously adopted at a session on Monday a draft revised budget for 2007 and three bills regulating the issue of compensation for workers who suffered damage to their health due to exposure to asbestos.The revised budget envisages 1.7 billion kuna for the health sector, of which 1.2 billion will be spent to settle financial obligations. Another 500 million kuna will be set aside from the budget for the health sector, Finance Minister Ivan Suker said.
Later this week the schedule of payments to wholesale drug stores will be agreed, and all financial obligations in the health sector will be settled. In the next three to four months, health spending will be monitored and those in charge of the sector will propose appropriate measures, Suker said.
He said that the aim of the revised budget was to deal with inherited problems, including lawsuits filed by civil servants over the violation of collective agreements during the term of the previous government.
The funds intended for the Ministry of the Interior will be increased by 350 million kuna due to lawsuits filed over the failure to pay pension and health insurance and overtime, and over the violation of the Law on Areas of Special State Interest.
The Ministry of Science and Education will be granted an additional 290 million kuna for its new projects introducing free textbooks and transportation for secondary school students. The Agriculture Ministry will get an additional 250 million kuna.
Suker said that the budget of the Regional Development Fund would increase as well, and that the government would secure an additional 114 million kuna for the implementation of the Environmental and Fisheries Protection Zone (ZERP).
Deputy PM Jadranka Kosor said that the revised budget envisaged an additional 143 million kuna for an increase in the material rights of civil servants. Funds amounting to 107 million kuna have been ensured for child allowances, and funds have been ensured for veterans' rights, Kosor said, adding that the government would today send the revised budget to parliament.
The revised budget is aimed at further reducing the fiscal deficit and lowering the state deficit to 2.6 percent of GDP, Suker said.
The revised budget follows announcements by the Prime Minister and leader of the Croatian Democratic Union (HDZ), Ivo Sanader, that in two to three years the deficit of the central government budget would be reduced to zero or even turn into surplus, Suker said.
Suker recalled that the economic growth in the first three months of this year was seven percent and that all economic indicators showed a strong growth in the second quarter as well.
Ivica Mudrinic said the Croatian Employers' Association (HUP) supported the proposed budgetary revision, adding that it was principled and would further boost economic activity.
The leader of the Croatian Trade Union Federation (HUS), Ozren Matijasevic, said he was satisfied that the GSV had accepted three bills that would solve the problems of workers affected by asbestos.
Croatian government expects higher budget revenue
ZAGREB, July 2 (Hina) - This year's budget revenue is projected at HRK 108.5 billion, or HRK 5 billion more than originally planned, while expenditure is expected to increase by HRK 3.9 billion to reach nearly HRK 112 billion, according to a proposed revised budget for 2007 which the Croatian government sent to parliament on Monday.The increase in revenue will make it possible for the government to direct HRK 1.1 billion at reducing the deficit to HRK 3.5 billion, or 2.6 per cent of Gross Domestic Product.
Prime Minister Ivo Sanader reiterated that his government was firmly committed to reducing the deficit. "We want to reduce the deficit to zero over the next two years," he said at a government session.
Sanader announced the government would increase unemployment benefits from HRK 1,000 to 1,200 as of October 1 this year.
Finance Minister Ivan Suker said that in the first half of this year budget revenue was HRK 2.5 billion higher than planned as a result of economic growth, improved collection and increased employment.
Suker said that economic growth in the first quarter was seven per cent and that the growth rate in the first half of the year was expected to exceed six per cent.
Croatia should aspire to be among top 40 competitive economies - council
ZAGREB, July 3 (Hina) - The National Competitiveness Council has presented an analysis of Croatia's competitiveness with emphasis on measures to be taken to push the country forward among the world"s 40 most competitive economies in the next three years.In the next three years, i.e. before it enters the European Union, Croatia should enter the Club 40 of the most competitive countries, and this means that it must be faster and better than it has been so far and that it must be more efficient in changes. We need a social consensus to enhance our country's competitiveness and a strong political will to embark on this road to the 40 most competitive economies, council chairman Darko Marinac said at the presentation of an annual review of Croatia's competitiveness in 2006, in Zagreb on Tuesday.
According to the World Economic Forum's global competitiveness index, Croatia is on an ascending curve.
According to the forum's report for 2006 covering 125 countries, Croatia moved forward by 13 places from the 64th place in 2005 to the 51st place last year.
Croatia has narrowed a gap between itself and some other transition countries such as the Czech Republic, Slovakia, Poland, Slovenia, Hungary and Estonia, but is still lagging behind.
The analysis also recommends in which sectors Croatia should make speedy headway so that this optimistic scenario of entering the club of the 40 most competitive countries could be realised.
Croatia should move from an economy based on efficiency factors to an economy based on innovation factors, Velimir Sonje said while presenting the report.
Apart from the continuation of the public sector reform, Croatia should strengthen the tertiary education system, advance market efficiency and increase its capability to absorb new technologies.
Parliament debates topics from financial security, energy and transport sectors
ZAGREB, July 4 (Hina) - Parliamentary clubs of the Croatian Party of Rights (HSP) and the Social Democratic Party (SDP) on Wednesday severely criticised a government-sponsored bill on financial security.MPs of the two parties said that the bill sent by the Ivo Sanader cabinet to be discussed under urgent parliamentary procedure would undermine Croatia's financial sovereignty.
They also insisted that the bill be discussed under regular procedure.
Pero Kovacevic of the HSP assessed that the bill would prevent the possibility to audit the ownership transformation and privatisation of Croatian banks which he said were owned by foreigners.
We allocated 15 billion euros for the financial rehabilitation of banks. They were sold for one billion and now their value is 40 billion euros. Irregularities in bank privatisation have not been entirely dealt with, Kovacevic said.
Financial Ministry State Secretary Ante Zigman refuted the criticism from the HSP and the SDP, claiming that the proposed bill would enhance legal security, strengthen the capital market and the entire financial system and facilitate cross-border transactions.
Later in the day, members of the parliament discussed amendments to three energy sector laws - the energy act, the electrical power market act, and the act regulating energy activities.
Clubs generally supported the amendments adjusting the Croatian legislation to the European Union's standards in this sector.
They also supported a final bill regulating the transport of dangerous substances.
MPs suggested that it would be better to transport dangerous substances mainly by rail and that road transportation should be limited to exceptional cases.
Transport Ministry State Secretary Drazen Breglec said that in 2005, 6.33 million tonnes of dangerous substances had been transported in the country by truck, by rail and by inland waterways. This made up about eight percent of the overall transport of goods by the above-mentioned modes in Croatia.
The Sabor today expanded its agenda to include several new items such as a draft revised budget for 2007.
The revision of the 2007 budget will be discussed on Thursday.
President, PM determined in fight against bribery, corruption
ZAGREB, July 4 (Hina) - Croatian President Stjepan Mesic and Prime Minister Ivo Sanader will not give up the determined battle against bribery and corruption and all forms of organised crime, regardless of attempts at media and intelligence manipulation by some groups from the intelligence underworld and criminal circles, read a joint statement.The president and the prime minister completely dismiss attempts to discredit top state officials and chiefs of rule of law institutions by those who evidently fear justice and the functioning of the rule of law, read the statement.
The state leaders' determination and political will have been expressed countless times through support to competent state bodies in the fight against all forms of corruption and organised crime, including through Operation Maestro, and President Mesic and PM Sanader will insist on further operations to be carried out by rule of law institutions, the statement said.
Maestro recently saw eight Croatian Privatisation Fund senior officials arrested for financial wrongdoing.
PM presents draft budget revision
ZAGREB, July 5 (Hina) - The government is continuing to reduce the fiscal deficit with this year's draft budget revision while retaining social rights and investing in development projects, Prime Minister Ivo Sanader said in parliament on Thursday presenting the draft.He said this year's budget and its revision were accompanied by positive macroeconomic indicators, notably a 7% GDP growth in this year's first quarter, while growing industrial output, retail trade, construction and tourism indicated that the economy would continue to grow in the second trimester as well.
Sanader said he expected the annual GDP growth to be 6-7%.
He went on to say that unemployment went down 8.3% from last year and that the lowest unemployment rate, below 10%, was expected by year's end.
The PM said the government wanted to provide for a balanced development of all parts of Croatia, so 87.5 million kuna would be set aside in the budget revision for the Regional Development Fund, namely for capital infrastructure projects and assistance to local government units in the drawing of European Union pre-accession funds.
The budget revision envisages 243.8 million kuna for farmers and fishermen, 114 million kuna for the Ecology and Fisheries Protection Zone in the Adriatic, and 290 million kuna for science and education.
Sanader said unemployment allowance would be increased from 1,000 to 1,200 kuna, 290 million kuna would be set aside for veterans and 107 million kuna for child's allowance.
He underlined that the government had earmarked more than one billion kuna so far to compensate for the failure to honour collective agreements under the previous government, and said that it set aside 440 million kuna for this purpose in the draft budget revision.
The revision envisages 1.7 billion kuna for the health sector, of which 1.2 billion to service outstanding liabilities and the remaining 500 million to prevent new debt accumulation by the end of the year.
Sanader said higher budgetary revenue would enable the government to earmark 1.1 billion kuna for further deficit reduction so that this year it could drop to 2.8% of GDP.
According to the government's draft budget revision, this year's revenue would be five billion kuna higher than initially projected, totalling 108.5 billion kuna, while expenditure would go up 3.9 billion and eventually total 112 billion kuna.
After Sanader's presentation, deputies debated the draft revision.
(EUR 1 = 7.3 kuna)
Govt. to issue KN3 billion bonds next week
ZAGREB, July 5 (Hina) - The Croatian government will issue KN3 billion bonds on 9 July, with the maturity date of 8 February 2017 and the interest rate of 4.75 percent.The Croatian government has decided on this move to reschedule other bonds that will be due soon, Finance Ministry Ante Zigman said at a government session in Zagreb on Thursday.
The issuance of new kuna bonds means that the government is focused on the domestic capital market. This has resulted in the reduction of the government's share in the overall foreign debt over the last three years, and the government's debt has been cut by 7.5 billion kuna since 2004, Zigman said.
At today's session, the government sent to parliament draft amendments to the Railways Act defining the construction, maintenance and modernisation of railway infrastructure as being in the interest of the Republic of Croatia. The changes will simplify and accelerate the resolution of property rights in this sector.
The changes put the construction and maintenance of railway construction on the equal footing with road construction and the construction of gas pipeline networks, Transport and Development Minister Bozidar Kalmeta said.
The government also sent to parliament a draft act on a rail services regulatory agency that should ensure equal and non-discriminatory access of all participants to the rail services market.
The government adjusted several laws to European Union standards, including laws regulating enhancement of health care quality and procedure for the accreditation of health institutions.
The draft law on exercising the right to legal aid was also adjusted to the acquis communautaire. This means that all citizens, regardless of their financial status and citizenship, are to be ensured access to courts.
Other adjusted laws include a new accounting act and a new act regulating the take-over and acquisition of companies.
Parliament amends several laws
ZAGREB, July 6 (Hina) - Croatia's Parliament on Friday wrapped up this week's sitting with the adoption of amendments to several laws, including the Defence Act, the Maritime Code, and the act regulating urban planning and construction.Under the changes in the Defence Act, as of 1 January 2008, potential conscripts will not be called to pass military training in the national service except in states of emergency or during war threats.
Women can voluntarily enrol in the military.
Under the changed urban planning legislation, no construction licences will be required for building houses of up to 400 square metres.
The Sabor amended the Energy Act, the Electricity Market Act and the act regulating energy activities, allowing physical entities to carry out energy activities under the same conditions as companies.
The parliament amended the Value Added Tax Act, making it possible for newspaper publishers to pay 10-percent VAT, instead of the rate of 22 percent.
MPs ratified several international conventions and treaties.
Voting on amendments to the Electronic Media Act was postponed at the proposal of the ruling Croatian Democratic Union (HDZ) that asked for additional consultations.
The parliament will resume the ongoing session next week.
2. MACROECONOMIC DATA
Croatia's investment risk indicator for July remains mild, says D&B
ZAGREB, July 3(Hina) - Croatia's risk indicator for July remains DB3d, which means that it is a country of mild risk for investors, according to the latest report by the Dun & Bradstreet agency, the BonLine credit rating agency from Zagreb said on Tuesday.In its July report, D&B focused on a report which an International Monetary Fund staff team made after visiting Zagreb in May, although D&B "is a little less pessimistic" than the IMF.
D&B based its optimism on fiscal policy guidelines for the 2007-09 period approved in 2006, noting that they are realistic as they are based "on continued expenditure restraint and ongoing structural reforms, especially in the areas of pensions, health care and the reduction of subsidies paid to (...) shipbuilding and steel manufacture".
With its DB3d risk indicator, Croatia came ninth in July's ranking of 25 countries. Slovenia was ranked first with a DB2b indicator of small risk for investors. The other countries above Croatia are Estonia, Hungary, Slovakia, the Czech Republic, Latvia, Lithuania, and Poland.
In the Eastern Europe regional risk indicator, Croatia was ranked better than new European Union countries Bulgaria and Romania.
Average annual household spending in Croatia: HRK 69,457
ZAGREB, July 8 (Hina) - Croatian households on average spent HRK 69,457 on personal consumption last year, slightly less than in 2005, a survey of household spending conducted by the Central Bureau of Statistics shows.Just as in previous years, most of the household budget went on food and soft drinks -- HRK 22,600 or 32.63%, followed by housing and energy bills (13.68%) and transport (11.4%).
Then came expenditures for clothing and footwear (8%), other goods and services (7.73%), recreation and culture (6.21%), furniture and maintenance (5.12%) and communications (5.11%).
Other items, such as alcoholic drinks, tobacco, hotels and restaurants, accounted for less than four per cent in personal spending.
At the bottom of the list were health (2.5%) and education (a mere HRK 466 or 0.67%).
3. BANKING AND FINANCE
Zagreb Holding bonds sold on London Stock Exchange within few hours
ZAGREB, July 3(Hina) - After a year of negotiations with foreign banks, the Zagreb Holding issued the first, EUR 300 million tranche of bonds on the London Stock Exchange on Tuesday, and according to media reports, the bonds were sold within a few hours.Nearly EUR 300 million was raised through the sale of corporate bonds, and investors were mainly banks and various funds.
The sale process was managed by Deutsche Bank, which fixed an interest rate for the investors at 5.5 per cent. The bonds mature in ten years' time.
Zagreb Holding officials said that the Holding had managed to secure extremely favourable conditions thanks to the good ratings awarded by the world's two major credit rating agencies, Moody's and Standard & Poor's.
Before London, Zagreb Holding bonds had been presented in other major European cities.
Zagrebacka Banka selected as agent for sale of 7% of INA shares
ZAGREB, July 3(Hina) - Zagrebacka Banka has been chosen to act as an agent for the sale of seven per cent of INA's shares to current and former employees of the national oil company under favourable conditions, the Government's Public Relations Office said in a statement on Tuesday."After examining the submitted bids, the Commission has concluded that Zagrebacka Banka dd Zagreb is the most favourable bidder," the statement said.
4. COMPANIES
Jamnica decreases losses
ZAGREB, July 2(Hina) - In this year's first three months, the Jamnica company registered 4.35 million kuna in losses, which was down 6.1 million kuna from the corresponding period in 2006, according to a financial report released by the Zagreb Stock Exchange.Revenue amounted to 157.43 million kuna, up 20.3%. Operational revenue went up from 128.65 million to 156.01 million kuna.
Domestic sales revenue went up from 114.19 million to 133.12 million kuna, while foreign sales revenue went up from 13.24 million to 20.8 million kuna.
Forty-two per cent of all revenue was generated by mineral water sales, 22% from spring water sales, 25% from fruit juice sales, and the rest from the sale of commercial goods.
Expenditure in this year's first three months was a little over 159 million kuna, up 18.2% from the same time last year.
Operational costs were lower than planned but higher than at the same time in 2006 due to a higher output and stronger investment, marketing and sales activities. The company also highlighted the importance of its rebranding campaign.
(EUR 1 = HRK 7.3)
Ledo's business losses 11.07 million kuna
ZAGREB, July 2(Hina) - Croatia's ice cream and frozen food producer Ledo suffered 11.07 million kuna in business losses in this year's first three months, which is less than in the same period last year when business losses amounted to 11.3 million kuna.Losses are smaller than planned because of income was higher, according to the company's financial report, published at the Zagreb Stock Exchange.
Ledo's total income in the first quarters of 2007 rose by 12.1 percent to 146.59 million kuna.
The company's business income when up from 126.7 million to 144.6 million kuna. Domestic sales income also recorded a significant growth - from 103.6 million to 119.2 million kuna. Foreign sales income rose from 19.9 million to 20.9 million kuna.
According to the financial report, the business results growth is in line with the company's plan.
Konzum makes 20.7 million kuna in net profit
ZAGREB, July 2(Hina) - The Konzum food store chain made a 20.7 million kuna in net profit in the this year's firth three months, which is 7.8 percent less than in the same period the year before, according to the company's financial report, published by the Zagreb Stock Exchange.Konzum's overall income rose by 18 percent reaching 2.26 billon kuna. The company's business income rose from 1.9 billion to 2.26 billion kuna.
Domestic sales income also rose from 1.77 billion to 2.1 billion kuna, while foreign sales income rose from 8.59 million to 20.7 million kuna.
Retail sales rose by 17 percent while whole sale went up 23 percent, according to Konzum's business report.
Financial income, however, went down from 5.49 million kuna to 2.72 million kuna.
Material and sales expenses rose from 1.6 billion to 1.9 billion kuna, while staff expenses went up from 147.8 million to 168.7 million.
Atlantic Grupa takes over Macedonian company
ZAGREB, July 3 (Hina) - Atlantic Grupa, a Croatian multinational company with its headquarters in Zagreb, has acquired Macedonia's Viciski Komerc firm, one of the main distributing companies in that southeastern European country.According to a press release issued on Tuesday by Atlantic Grupa, this leading producer of instant vitamin drinks, sports food, cosmetics and personal care products and a leading distributor of fast moving consumer goods in the region has expanded its distribution network in southeastern Europe by the latest acquisition.
Atlantic Grupa is planning to increase by 20 percent this year's turnover in Viciski Komerc, which is as of now called Atlantic Trade Skopje.
Earlier this year, Atlantic Grupa, that employes 1,400 workers, took over Fidifarm, a producer of vitamin products and food supplements that owns Dietpharm brand, a leading brand in this category at the Croatian market. This acquisition cost 83 million kuna and the group also acquired Serbia's Multivita for six million euros in 2007, too.
The group's consolidated revenues in the first quarter of 2007 were 372.5 million kuna.
Emil Tedeschi, the president and CEO, and the Tedeschi family, hold almost 90 percent of the stock in Atlantic Grupa. The German development bank, DEG Invest, which became Atlantic Grupa's shareholder in November 2006, holds 8.24 percent.
MOL: We're not selling our stake in INA
ZAGREB, July 4 (Hina) - Hungarian oil company MOL has dismissed speculation about the possibility of it selling its stake in Croatian oil company INA."With regard to rumours of MOL selling its stake in INA, our company's policy is not to comment on market hearsay or speculation. MOL's financial position remains one of the strongest among the regional oil and gas companies, so we have no reason to sell any stakes for financial reasons," MOL Group Vice-President Ferencz Szabolcs said in a statement.
The statement came following media speculation that the Hungarian company might sell its stake in INA (25 per cent plus one share) to gain the capital needed to fend off a takeover bid from Austria's OMV.
Zvijezda vegetable oil, Vegeta spice ranked Croatia's strongest brands
ZAGREB, July 4(Hina) - The Zvijezda vegetable oil and the Vegeta spice were the leading brands in Croatia in this year's first half, according to a survey conducted by VALICON, a company dealing in market counselling and research.The index of a brand's success was the result of five main indicators measuring a brand's strength - recognition, experience, consideration, use and loyal use.
The Kras company's Dorina chocolate jumped from last year's eighth to this year's third place, pushing Coca Cola to number five.
Franck coffee jumped from nine to number four, replacing the Cedevita beverage, which dropped to sixth place.
The Zvijezda mayonnaise remained at number seven, while the Ariel detergent was ranked eighth. Gillette razors were ranked ninth and Orbit chewing gums tenth among Croatia's 10 strongest brands.
5. INTERNATIONAL COOPERATION
Utilisation rate of CARDS 2004 funds 94.6 percent
ZAGREB, July 2 (Hina) - A State Secretary at the Finance Ministry, Ante Zigman, has said that 94.6 percent of funds from the CARDS 2004 programme have been used so far, which proves progress and competence of Croatian institutions in implementing tenders in line with EU standards on public procurement.The signing of contracts for the EUR 46.57 million CARDS 2004 programme ended last week and Croatia agreed on projects worth EUR 44.06 million, Zigman told a news conference.
The announcement of tenders and the signing of contracts for projects from the CARDS 2004 programme was carried out independently by the Finance Ministry and the 90% rate of utilisation of the funds is a very good result, because the procurement procedure was carried out in line with EU regulations, Zigman said.
Along with those projects, the EC Delegation to Croatia carried out, within the CARDS 2004 programme, procedures for projects worth EUR 30.42 million, of which 30.41 million or 99.96 percent was used, Zigman said.
The overall utilisation rate of the CARDS 2004 programme is 96.71 percent, Zigman said, dismissing objections Opposition deputies made in a parliamentary debate in April on whether the government should be called to account over the low utilisation rate of EU funds.
Zigman said that the first data on the utilisation of funds could be released only after the expiry of the deadline for the signing of contracts, while complete data would be released only after the contracts were implemented.
The deadline for the drawing of funds from the CARDS 2004 programme is the end of 2009, Zigman said.
Most of the funds for the agreed projects from the CARDS 2004 programme refer to the procurement of commodities (EUR12.26 million) and twinning projects (EUR 10.38 million), and most funds were granted to the Ministry of the Sea, Tourism, Transport and Development (EUR12.15 million) and the Ministry of the Interior (EUR10.36 million).
A new pre-accession fund, IPA, has been available in Croatia since the start of this year and it will replace the CARDS programme, as well as the PHARE, ISPA and SAPARD programmes.
A total of EUR 589.9 million is intended for Croatia within the IPA programme in the 2007-2010 period.
The first operational programmes within IPA have already been sent to Brussels and they are expected to be approved in September and October, while the first contracts and the drawing of funds are expected next year, the Finance Ministry said.
Moldavian, Croatian presidents hold talks on political and economic topics
ZAGREB/CHISINAU, July 3 (Hina) - Croatian President Stjepan Mesic and his Moldavian host, President Vladimir Voronin, agreed during their talks in Chisinau on Tuesday that their countries had good bilateral relations and that they should improve their economic cooperation.The Croatian head of state arrived in Chisinau on Monday evening for a three-day official visit.
At their meeting on Tuesday morning, the two presidents also discussed European aspirations of their countries. Mesic acquainted Voronin with the situation in Croatia's accession negotiations with the European Union. Voronin thanked Mesic for Croatia's support to Moldavian European ambitions.
The two officials also discussed some burning issues in these parts in Europe, including Kosovo and Transnistria. Voronin and Mesic agreed that these two problems were not identical as Transnistria had never had any form of autonomy or special status inside Moldova.
Mesic added that every country had the right to its territorial integrity and stressed that a soplution to problems must be sought by peaceful models, i.e. through negotiations.
It is better to negotiate ten years than to wage a war ten days, the Croatian President said.
As regards the economic bilateral cooperation, Mesic said that Croatian companies could to be engaged in seismic search for possible oil deposits in Moldova, and Voronin added that his country was interested in shipping Moldavian goods along the River Danube up to Croatia and further.
After the presidential meeting, delegations of the two countries signed a memorandum of understanding between the Moldavian bureau for combating white-collar crime and the Croatian Finance Ministry's money laundering suppression office. The document will regulate cooperation in exchange of data on money laundering and financial terrorism.
After that Mesic laid a wreath at the monument erected in tribute to Moldavian founder Stefan cel Mare si Sfint, who lived in the turn of the 15th century.
On Monday evening, Mesic was a guest at the dinner organised by Moldavian Deputy Prime Minister and Foreign Affairs Minister, Andrei Stratan.
On Wednesday Mesic will fly to Kazakhstan from Moldova.
Croatian president meets Moldovan deputy PM
ZAGREB/CHISINAU, July 3 (Hina) - Croatian President Stjepan Mesic met Moldovan Deputy Prime Minister Zinaida Greceanii in Chisinau on Tuesday for talks on Croatian-Moldovan economic cooperation.Greceanii was interested in Croatia's experience in tourism and agriculture, notably the production of ecological food.
The two officials also discussed a Moldovan passenger and cargo terminal on the Danube, whose construction is nearly over and which Croatian companies are interested in using.
Mesic said Croatian business people were interested in cooperating with Moldovan enterprises and state, and reiterated Croatia's support to Moldova in the EU integration process.
Mesic is due to wrap up his three-day visit to Moldova on Wednesday, when he will meet again with his counterpart Vladimir Voronin, hold talks with Parliament Speaker Marian Lupu and visit the Capriana monastery.
Croatia signs loan agreement with World Bank to modernise tax authority
ZAGREB, July 3 (Hina) - Croatian Finance Minister Ivan Suker and the head of the World Bank Office in Zagreb, Andras Horvai, on Tuesday signed a EUR 50 million loan agreement for the modernisation of the Tax Authority.The purpose of the project is to increase the efficiency, transparency and responsibility of the Tax Authority. The loan is to be repaid over ten years, with a grace period of five years.
Since the overall project is worth EUR 93 million, the remaining funds will be secured from EU pre-accession funds and the national budget.
OECD Investment Compact office opened in Zagreb
ZAGREB, July 4 (Hina) - The OECD Investment Compact Office was opened in Zagreb on Wednesday to promote cooperation between Croatia and the Organisation for Economic Cooperation and Development.Investment Compact is the OECD's programme aimed at improving the investment environment and promoting the development of the private sector in Southeast Europe and is being implemented under the aegis of the Stability Pact.
Croatia has had very successful cooperation with the OECD, and the opening of the Investment Compact Office will make it possible to further enhance their cooperation and everyday communication, Economy Ministry State Secretary Vladimir Vrankovic said.
OECD Deputy Director for Financial and Enterprise Affairs Reiner Geiger said that the opening of the Investment Compact Office was important for Croatia on its path to EU membership.
The Office will cover Croatia and Bosnia and Herzegovina, and its opening was made possible thanks to a donation from the Austrian government.
Croatia's APIU, Spain's ASECAM sign cooperation agreement
ZAGREB, July 5 (Hina) - Croatia's Export and Investment Promotion Agency (APIU) and the ASECAM business association form the Spanish region Valencia signed on Thursday a cooperation agreement that paves the way for investment in energy, tourism, logistics and other areas.APIU manager Slobodan Mikac said Spanish investors were mostly interested in investing in the exploitation of renewable energy sources, high quality tourist resources and the development of logistics centres.
He announced that the Spanish company Green Fusion might participate in the construction of a solar plant in Split-Dalmatia County which could be worth one billion kuna.
Mikac also announced that Spanish partners would cooperate in the building of logistics centres, of which the biggest one is in Zagreb, worth 300-400 million euros, and said that APIU might open an office in Spain.
According to Croatian statistics, Spain's share in Croatia's foreign trade is 1.31%. Last year's export to Spain was US$ 72.2 million while import was US$ 343.8 million.
(EUR 1 = 7.3 kuna)
Croatian president and Kazakh PM discuss promotion of economic ties
ZAGREB/ASTANA, July 5 (Hina) - Croatian President Stjepan Mesic, currently on a two-day visit to Kazakhstan, met Prime Minister Karim Massimov and Parliament Speaker Kasym-Zhomart Tokayev on Thursday to discuss ways of promoting economic ties between the two countries.Massimov expressed his readiness to ensure the speediest possible implementation of joint economic projects which Mesic discussed earlier in the day with his host, President Nursultan Nazarbayev.
"Our economy is intensively developing and in the next five years we plan to build more than 50 million square metres of residential space," Massimov said.
The Kazakh prime minister showed an interest in Croatian companies building a construction material factory in Kazakhstan since the construction industry in that country is not sufficiently developed. He also said he expected the major involvement of Croatian companies in the construction of a highway network.
Speaking of the pharmaceutical industry in Kazakhstan, Massimov said that domestic production met only 10 per cent of the country's needs and that Kazakhstan annually imported EUR 1 billion worth of medicines. In this context he said he saw a possibility for the construction of a factory for Kazakh needs.
Mesic said he was pleased with the great interest of the Kazakh government in the involvement of Croatian companies in the oil sector, construction and the pharmaceutical industry.
After the meeting, the governments of the two countries signed an agreement on cooperation in combating organised crime, trafficking in psychotropic drugs, terrorism, and other illegal activities.
During the meeting with Parliament Speaker Tokayev, the good cooperation between the two countries at bilateral and multilateral levels was cofirmed and the need was reiterated for stronger economic ties.
Tokayev said he was confident that Croatia would soon become a full member of the European Union and that consequently cooperation with Croatia would become even more important for Kazakhstan's foreign policy.
Both Mesic and Tokayev stressed the importance of parliamentary cooperation for the further promotion of bilateral relations.
WIIW expects Croatia to join EU in 2010 and enter Eurozone in 2012
ZAGREB, July 7 (Hina) - Croatia should become a European Union member in 2010 and enter the Eurozone in 2012, according to the Vienna Institute for International Economic Studies (WIIW).According to the WIIW latest report headlined "The Current Situation In And Forecasts For Central, Eastern and Southeast European Countries", Croatia is the first country to join the EU next.
Macedonia will follow in 2013, while Albania, Bosnia-Herzegovina, Serbia and Montenegro will join the bloc in 2015, WIIW said.
Bulgaria is the first country to adopt euro next which, according to WIIW, is expected in 2009. Romania will follow in 2012 when Croatia is also expected to adopt the European currency. Macedonia will implement euro in 2015, WIIW said.
The institute expects Albania, Bosnia-Herzegovina and Serbia to enter the Eurozone in 2017 and Turkey will follow in 2020.
WIIW expects Croatia to mark a five percent GDP growth in 2007 and 2008. Inflation in 2007 should amount to 2.8 percent and drop to 2.3 percent in 2008.
According to WIIW forecasts, Croatia's unemployment rate in 2007 should amount to 10.8 and 10.3 percent in 2008.
6. UNIONS
Government, trade unions agree purchase terms for 7 pct of INA shares
ZAGREB, July 4 (Hina) - The government and trade unions of workers in the INA oil company on Wednesday agreed terms under which INA's former and current employees will be able to buy seven per cent of the company's shares and an agreement to that effect is expected to be signed next week, sources close to the negotiators said.The reference price of a share will be 1,690 kuna, the same price at which INA shares were sold to members of the public in a public offer.
INA's former and current workers will be able to buy the shares at a five per cent basic discount and an additional one per cent discount per year of service.
Shares will be bought in the first half of September in two rounds. The lock-up period will be between six and 12 months, depending on years of service.
(EUR 1 = 7.3 kuna)
7. ASSOCIATIONS
Croatian Tourism Board satisfied with course of tourist season
ZAGREB, July 4 (Hina) - The course of this year's tourist season, with two million arrivals and six million overnight stays, is better than planned and indicates another excellent tourist season, the Minister of the Sea, Tourism, Transport and Development, Bozidar Kalmeta, said at a convention of the Croatian Tourism Board (HTZ) on Wednesday.The session marked the 15th anniversary of the establishment of the HTZ system in Croatia.
Commenting on the good results of the tourist season, Kalmeta said that this year Croatia could expect tourism revenue exceeding last year's 6.3 billion euros, an increase of 3-5%.
The HTZ convention was preceded by a session of the HTZ Tourism Council, which pointed to problems such as a drop in the tourist turnover in Dubrovnik County, an inadequate price policy in some destinations and for some types of accommodation, and the failure to privatise some hotel companies.
HTZ Council member Pave Zupan Ruskovic said that this year's decline in the number of charter flights in Dubrovnik County by 200 would result in a drop in the tourist turnover that would be difficult to compensate for in the peak season.
Ruskovic said that the government should urgently do something to subsidise and encourage the arrival of tourists by plane to that area.
A member of the Council from Istria, Veljko Ostojic, pointed to the problem of a drop in the arrivals of German and British tourists in Istria.
As for prices, the Council pointed to the problem of excessive prices at camping sites and in the private accommodation sector, as well as to the failure to privatise hotel companies in some resorts.
8. FAIRS, CONFERENCES
New regulations to stimulate electricity generation from renewables
ZAGREB, July 3(Hina) - Sub-legal normative regulations in the energy sector, that took effect on 1 July, will create new possibilities for entrepreneurs and investors in the renewable energy sector, according to a conference that was held in Zagreb on Tuesday.These new regulations relating to the Energy Act and the Electricity Trading Act were welcomed by participants in the conference called "Energy: Alternatives, Potentials and Possibilities".
Croatia is expected to do much in the renewables sector in light of the fact that European Union is planning that renewables should cover 20 percent in the European energy consumption in 2020.
Croatia is planning that until 2010, 5.8 percent of electricity be produced from renewable energy sources and that this percent would not include the contribution from hydro power plants.
As of 1 July, Croatian electricity buyers pay 0.89 lipa per kiloWatthour (kWh) as the source for collecting funds for stimulating the electricity generation from renewables.
9. SUNDRIES
Adriatic Project being implemented according to plan
SPLIT, 6. srpnja 2007. (Hina) - The national water management company Hrvatske Vode has reported on the progress of the HRK 280 million Adriatic Project which includes the construction and upgrading of drainage and water purification systems in Croatia's coastal areas.Seven sub-projects for waste water drainage are being implemented in the Central and Northern Adriatic, in which HRK 233.5 million will be invested, project director Dinko Polic said at a press conference in the southern city of Split on Friday.
Hrvatske Vode, in cooperation with local authorities and utility companies, has made all the necessary technical preparations, carrying out feasibility studies, environmental impact studies and other preparatory studies.
The greatest investment in the Central Adriatic will be made in the waste water management systems in the Zadar and Biograd areas, a total of HRK 186 million.
The second stage of the 10-year project will last from 2008 to 2012, when some 15 sub-projects are to be completed in the Southern Adriatic.
The construction of the systems in Zadar, Opuzen and Makarska will continue this summer, but the work will be stepped up in the second half of September, after the peak tourist season.
The Adriatic Project has been launched by the Croatian government, Hrvatske Vode and the World Bank.
(1 euro = 7.3 kuna)