The European Commission has also issued five recommendations to Croatia.

On Monday, the European Commission issued five recommendations to Croatia that are almost identical to those issued last year. They involve the areas of public finances and taxation, pensions, the labour market and social protection, salaries, public administration and state enterprises, as well as the service sector and the judicial system. The recommendations were published as part of the spring European semester package, in which the European Commission also recommended the closure of the excessive deficit procedure (EDP) for Croatia and Portugal, reports Poslovni.hr on May 22, 2017.

It was recommended that Croatia should exit from the excessive deficit procedure on the basis of the assessment of its stability and convergence programme, and after the reduction of the budget deficit and public debt last year. “This is very good news and a great acknowledgment for Croatia and Portugal,” said European Commission Vice President Valdis Dombrovskis and Economic Affairs Commissioner Pierre Moscovici.

In its first recommendation, the Commission demands the continuation of fiscal policies in line with the requirements of the preventive part of the Stability and Growth Pact, namely maintaining the medium-term budgetary goals in 2018.

The second recommendation involves discouraging early retirement, accelerating the transition to raising the retirement age, and the harmonisation of retirement provisions for certain categories with general retirement rules.

In its third recommendation, the Commission seeks to accelerate reforms of the education system and to improve the education system for adults, aimed particularly at the lower-skilled and longer-term unemployed.

The fourth recommendation includes the reduction of fragmentation and improvement in the functional allocation of competencies in the public administration sector, in order to improve efficiency and reduce territorial differences in the provision of public services. In consultation with social partners, the framework for salaries in the public sector and public services should be harmonised.

The fifth recommendation is to accelerate the privatisation of state-owned enterprises and other state assets and improve corporate governance in state-owned enterprises, to significantly reduce administrative costs for businesses, and to remove restrictions that hamper access to regulated professions. It also seeks to improve the quality and efficiency of the judicial system, especially in regard to the reduction of the duration of civil and commercial cases.

The European Commission experts working on the drafting of the recommendations say that they have not changed much in the last two years because there has not been much progress with their fulfilment so far. They express hope that the 2017 National Reform Programme and the Convergence Programme, which were adopted by the government on the 27th of April, 2017, would be largely implemented. “It is a matter of implementation, not of drafting programmes”, say the experts from the Commission.

They add that political stability is needed for the implementation of structural reforms, and that it is now a good time for reforms because they are always easier to implement when the economy is experiencing a good rate of growth, which is currently the case in Croatia.