The agency reported on Wednesday that the Croatian government's proposed reduction of budget expenditure for this year was encouraging, but that the planned cuts were less than previously projected, adding that it would conclude its review of the Croatian rating by the end of the first quarter.

In light of the fact that many European economies have seen a decline in their credit rating, this is an opportunity for Croatia "to take a break and regroup" before embarking on the road towards a more active and dynamic position, Milanovic said at the government's meeting at which his cabinet decided to reduce different non-tax fees in order to make it easier for entrepreneurs and investors to do business in Croatia.

A 50-percent reduction in forest environment and water supply fees will make economies of 300 million kuna annually, and the annulment of monument annuity will save an additional HRK 50 million.

A set of para-fiscal levies is a huge burden on the efficiency of the economy, and the additional reduction of non-tax fees proves the government's intention to ease the burden on the economy and help it to raise its competitiveness, Finance Minister Slavko Linic said.