The Croatian Employers' Association (HUP) is concerned about the current economic situation in the country and the scope and effectiveness of measures that have been undertaken by the government to kick-start the economy, the HUP said in a statement on Monday.
The HUP welcomed the initial government measures aimed at raising the competitiveness of the national economy, attracting investment and cutting costs, but warned of the lack of real and fundamental reforms that would create conditions for economic recovery and long-term sustainable growth.
What has been done so far is not and will not be enough to stimulate growth and improve the investment and business climate. Quite the contrary, some steps are having a negative effect on the investment climate and economic growth, such as higher taxes that create additional risks and legal insecurity, employers said.
The HUP was particularly concerned about the lack of coordination between the measures of the central government and those of local authorities and and public companies, which it said only made it more difficult for entrepreneurs.
At the time when the central government tries to reduce the overall tax burden by cutting contributions and parafiscal levies, the local government in Zagreb decided to increase public transport fares for employees, increasing the obligations of local companies by a total of 309 million kuna (40 million euros) annually, the HUP said.
The association complained that labour and capital in Croatia are overtaxed, labour legislation is bad and inflexible, the education system is not coordinated with labour market needs, the justice system is slow and ineffective, and state administration is inefficient.
The HUP said it considered its cooperation with the new government insufficient, stressing that dialogue and cooperation among the social partners could produce better and more effective measures.
