EN    EN EN 
 
EN    EN  EUROPEAN COMMISSION 
Brussels, 9.11.2010 
SEC(2010) 1326 final 
  
COMMISSION STAFF WORKING DOCUMENT 
 
Croatia 2010 PROGRESS REPORT  
 
  
accompanying the 
 
COMMUNICATION FROM THE COMMISSION 
TO THE EUROPEAN PARLIA MENT AND THE COUNCIL 
 
Enlargement Strategy and Main Challenges 2010-2011 
{COM(2010) 660 final} 
 
EN 2   EN TABLE OF CONTENTS 
1. Introduction................................................................................................................ .. 4 
1.1. Preface................................................................................................................... ....... 4 
1.2. Context ................................................................................................................... ...... 4 
1.3. Relations between the EU and Croatia......................................................................... 5 2. Political criteria .......................................................................................................... .. 6 
2.1. Democracy and the rule of law .................................................................................... 6 2.2. Human rights and the protection of minorities .......................................................... 10 2.3. Regional issues and international obligations............................................................ 15 3. Economic criteria ....................................................................................................... 17 3.1. The existence of a functioning market economy ....................................................... 17 3.2. The capacity to cope with competitive pre ssure and market forces within the Union
............................................................................................................................... ..... 24 
4. Ability to assume the obligations of membership...................................................... 26 4.1. Chapter 1: Free movement of goods .......................................................................... 26 4.2. Chapter 2: Freedom of movement for workers.......................................................... 28 4.3. Chapter 3: Right of establishment and freedom to provide services ......................... 28 4.4. Chapter 4: Free movement of capital......................................................................... 29 4.5. Chapter 5: Public procurement................................................................................... 30 4.6. Chapter 6: Company law............................................................................................ 31 4.7. Chapter 7: Intellect ual property law........................................................................... 32 
4.8. Chapter 8: Competition Policy................................................................................... 33 4.9. Chapter 9: Financial Services..................................................................................... 34 4.10. Chapter 10: Information society and media............................................................... 35 4.11. Chapter 11: Agriculture and rural development......................................................... 36 4.12. Chapter 12: Food safety, veteri nary and phytosanitary policy .................................. 36 
4.13. Chapter 13: Fisheries.................................................................................................. 37  
4.14. Chapter 14: Transport policy ..................................................................................... 38 4.15. Chapter 15: Energy .................................................................................................... 39 4.16. Chapter 16: Taxation.................................................................................................. 40 
 
EN 3   EN 4.17. Chapter 17: Economic and Monetary Policy ............................................................. 41 
4.18. Chapter 18: Statistics.................................................................................................. 4 1 
4.19. Chapter 19: Social Policy and employment............................................................... 42 4.20. Chapter 20: Enterprise and industrial policy.............................................................. 44 4.21. Chapter 21: Trans European Networks...................................................................... 45 4.22. Chapter 22: Regional policy and coordi nation of structural instruments .................. 45 
4.23. Chapter 23: Judiciary an d fundamental rights ........................................................... 46 
4.24. Chapter 24: Justice, freedom and security ................................................................. 54 4.25. Chapter 25: Science and research .............................................................................. 58 4.26. Chapter 26: Education and culture............................................................................. 58 4.27. Chapter 27: Environment ........................................................................................... 59 4.28. Chapter 28: Consumer and health protection............................................................. 60 4.29. Chapter 29: Customs Union....................................................................................... 62 4.30. Chapter 30: External relations.................................................................................... 62 4.31. Chapter 31: Foreign, Secur ity and Defence Policy.................................................... 63 
4.32. Chapter 32: Financial Control.................................................................................... 64 4.33. Chapter 33: Financial an d budgetary provisions........................................................ 65 
Statistical Annex .............................................................................................................. ........ 67 
 
EN 4   EN COMMISSION STAFF WORKING DOCUMENT 
2010 Progress Report 
1. INTRODUCTION  
1.1. Preface 
Since March 2002, the Commission has reported re gularly to the Council and Parliament on 
progress made by the countries of  the Western Balkans region. 
This report on progress made by Croatia on prep aring for EU membership largely follows the 
same structure as in previous years. The report: 
– briefly describes relations be tween Croatia and the Union; 
– analyses the situation in Croatia in term s of the political criteria for membership; 
– analyses the situation in Croatia on the basi s of the economic criteria for membership; 
– reviews Croatia’s capacity to assume the obligations of membership, that is the acquis 
expressed in the Treaties, the secondary legislation a nd the policies of the Union. 
This report covers the period from early October 2009 to the end of September 2010. Progress 
is measured on the basis of decisions taken, le gislation adopted and measures implemented. 
As a rule, legislation or m easures which are being prepar ed or awaiting parliamentary 
approval have not been taken into account. This  approach ensures equal treatment across all 
reports and permits an objective assessment. 
The report is based on information gathered and analysed by the Commission. Many sources 
have been used, including contributions from the government of Croatia, the EU Member 
States, European Parliament reports1 and information from various international and non-
governmental organisations. 
The Commission has drawn detailed conclusi ons regarding Croatia  in its separate 
communication on enlargement2, based on the technical analysis  contained in this report. 
1.2. Context 
The June 2004 European Council  granted the status  of candidate country to Croatia. 
Accession negotiations with Croatia were ope ned in October 2005. The Stabilisation and 
Association Agreement between Croatia and the EU was signe d in October 2001 and entered 
into force in February 2005. 
                                                 
1 The rapporteur for Croatia is Mr Hannes Swoboda.  
2 Enlargement Strategy and Main Challenges 2010-2011 (COM(2010) 660 of 9.11.2010). 
 
EN 5   EN 1.3. Relations between the EU and Croatia 
Croatia is participating in the St abilisation and Association Process. 
Accession negotiations with Croatia  have continued and are now entering their final phase. 
Negotiations have been provisionally closed on 25  out of 35 chapters and remain to be closed 
on competition; agriculture; fish eries; regional policy; judi ciary and fundamental rights; 
justice, freedom, security; environment; fore ign, security and defenc e policy; budget; and 
'other issues' . 3  
In December 2009, based on the Commission’s recommendation, a working group was set up 
to draft the Treaty of A ccession with Croatia. Work is progressing well.  
The political and economic dialogue between the EU and Croatia  has continued. Political 
dialogue meetings were held in Brussels in  March 2010 at minist erial level. Economic 
dialogue took place in a bilatera l meeting with the Commission and Croatian senior officials 
in June 2010. Moreover, the multilateral ec onomic dialogue between  the Commission, EU 
Member States and Candidate Countries in the context of the pre-accession fiscal surveillance 
continued, including a meeting at Ministerial level in May in Brussels. These meetings 
focused on the main challenges posed to Cr oatia by the Copenhagen political and economic 
criteria and reviewed the progress made towards fulfilling the Accession Partnership 
priorities. 
Implementation of the Stabilisation and  Association Agreement (SAA) has been mixed. 
Full liberalisation of short-term capital m ovements, which Croatia postponed in 2009 
invoking the safeguard clause in Article 60(4) , was achieved on 1 July 2010. With regard to 
State aid, the tendering procedur e for shipyards in difficulty was completed in June 2010. 
However, Croatia adopted safeguard measures on some types of semi-hard cheese and cheese 
supplements, in breach of WTO procedures. The measures on cheese supplements were 
revoked in November 2009, whereas those on hard  cheeses were confirmed and expired in 
January 2010. Certain tax provisions on coffee and coffee-based products have to be reviewed 
and amended. Croatia should also further liberalis e its agricultural sector , in accordance with 
Article 29, to pave the way for integration into the EU internal market upon accession.  
The EU is providing guidance to the aut horities on reform priorities under the  Accession 
Partnership . Progress on these reform priorities is encouraged and monitored by the SAA 
bodies. The SAA Council met in March 2010 an d the SAA Committee in December 2009. Six 
sectoral sub-committee meetings have b een held since November 2009. Based on the 
Accession Partnership, Croatia adopted its na tional programme for EU  accession in early 
2010. 
Financial assistance  has been provided under the Instrument for Pre-accession Assistance 
(IPA) since 2007. The 2010 IPA programmes tota lled €154 million. This assistance is focused 
                                                 
3 Negotiations have been provisionally closed on th e following chapters: science and research; education 
and culture; enterprise and industrial policy; external relations; economic and monetary policy; 
intellectual property law; information society; trans-European networks; customs union; company law; 
statistics; free movement of workers; financial services; energy; consumer and health protection; right of establishment and freedom to provide services; social policy and employment; free movement of 
goods; public procurement; taxation; food safety, vete rinary and phytosanitary policy; financial control; 
institutions; free movement of capital; and transport) 
 
EN 6   EN on institution-building and prep aring for implementation of the EU’s common agricultural 
policy and cohesion policy. In addition, Croatia continued to  benefit from regional and 
horizontal programmes, including an IPA crisis response package  created in 2008. The 
country has taken significant steps to addre ss weaknesses identified  by the Commission in 
Croatia’s management of pre-acc ession aid. These measures are meant to prepare the country 
for the next phase of decentral isation of management powers, namely the waiver of the EU 
Delegation’s ex ante  controls for IPA components I to IV. However, a track record of 
improved implementation is needed.  
EU financial support has been provided for development of civil society under the Civil 
Society Facility. In addition, a €16 million contribution under the cross-border cooperation programmes with Italy, Slovenia,  Hungary, Serbia, Montenegro and Bosnia and Herzegovina, 
combined with participation in European Re gional Development Fund (ERDF) programmes, 
will promote dialogue with loca l and regional authorities. Cr oatia’s participation in an 
increasing number of EU programmes (13) is al so a valuable opportunity to put civil society 
dialogue into action.  
Croatia participates in the following EU Programmes : 'Seventh Research Framework 
Programme'; 'Competitiveness and Innova tion Framework Programme' (including 
'Entrepreneurship and Innovation Programme',  'Information Communication Technologies 
Policy Support Programme' and 'Intelligent Ener gy Europe Programme'); 'Progress'; 'Culture'; 
'Europe for Citizens'; 'Fiscalis 2013'; 'Customs  2013'; 'Interoperable Delivery of European 
eGovernment Services to public Administrati ons Business and Citizens' (IDABC); 'Civil 
Protection Financial Instrument'; 'MEDIA 2007'; 'Community action in the field of health'; 
'Marco Polo II'; and 'Civil Protection Mechanism'.  
2. P
OLITICAL CRITERIA  
This section examines the progress made by Croatia towards meeting the Copenhagen 
political criteria, which require stability of institutions guaranteeing democracy, the rule of 
law, human rights and respect fo r and protection of minorities . It also monitors regional 
cooperation, good neighbourly relations with enla rgement countries and Member States and 
compliance with international oblig ations, such as cooperation w ith the International Criminal 
Tribunal for the former Yugoslavia (ICTY). 
2.1. Democracy and the rule of law 
Parliament Parliament functioned in accordance with its constitutional role. However, the capacity of 
parliament to scrutinise the legislative proce ss needs enhancing. It adopted amendments to the 
Constitution necessary for progress in the accession negotiations.  
The Presidential elections went smoothly and complied with OSCE standards. However, 
efforts are still necessary to address outstanding issues such as consolidating and harmonising the legal framework, reforming the election ad ministration and updating the voter register.  
Government 
The government continued to function effectivel y, including after the Cr oatian Social Liberal 
Party (HSLS) left the ruling coalition in Jul y. A number of cabinet reshuffles took place.  
 
EN 7   EN Public administration  
Limited progress can be reported with public ad ministration reform, which is a key Accession 
Partnership priority. The legal basis for buildi ng a modern and professional civil service is 
still incomplete. The Law on salaries of local and regional self-governme nt units has not been 
adopted. A unified approach to salaries through out the county has not yet been introduced. A 
civil service registry still has not been put in place.  
The revised General Administrativ e Procedures Act (GAPA) entere d into force. Its aims are 
to support establishment of service-oriented and professional admini strative practices and 
develop an administrative system based on si mplified and transparent procedures. However, 
implementation of the GAPA is at an early st age and there have been delays in harmonising 
the various sectoral legal acts related to it. 
The Law on administrative disputes  was adopted and is due to enter into force on 1 January 
2012. Closer coordination between the Ministry of Public Ad ministration (MoPA) and the 
Ministry of Justice will be needed to ensure  efficient implementation of the legal framework .  
As regards the civil service, a human res ources development stra tegy (2010-2013) and its 
associated action plan were a dopted. The strategy envisages new methods for recruiting and 
retaining a sufficient number of qualified ci vil servants in the public administration. 
Preparation of the reform of the remunerati on system in the public sector, including in 
agencies and institutions, has started. To identi fy inefficiencies, a detailed analysis of the 
functions of the public agencies is being pr epared. However, the human resources strategy 
covers only civil servants and not all state offi cials at both central a nd regional levels, thus 
limiting the impact of the reforms. Significant  further efforts in terms of adoption and 
implementation of underlying legal acts are required to establish a merit-based promotion and reward mechanism, to accelerate depoliticis ation, decrease employee turnover and attract 
qualified personnel. 
The capacity of public administ ration at central, regional an d local levels to manage 
decentralisation reforms has still to be signif icantly strengthened. A d ecentralisation strategy 
remains to be developed. The role of the Lo cal Democracy Academy in training local and 
regional government officials is  to be further strengthened. 
The MoPA, along with staff needed for EU accession, were exempt from the government 
Decision halting recruitment of new civil servan ts because of the economic crisis. However, 
the administrative capacity of the MoPA needs to be further improved so that it can implement efficiently the complex tasks rela ted to public administ ration reform. Although 
new staff have been recruited in the MoPA and across the entire administration to prepare for 
EU accession, considerable structural pr oblems of turnover and retention remain. 
The role and effectiveness of the People's Om budsman is being increased. However staffing is 
still insufficient. Greater attention need to be paid to the Ombudsman's recommendations to 
further enhance his role as an institutional c ounterweight defending the rights of citizens and 
combating maladministration. 
Continuous training throughout the State admini stration was provided by the Civil Service 
Training Centre of the MoPA. Ho wever, enhanced capacity to fulf il its key role in improving 
the professional knowledge, skil ls and performance of civ il servants is required.  
 
EN 8   EN Overall, limited progress can be reported on the public administration reform. In order to 
achieve tangible results, stronger political co mmitment and closer coordination between the 
key stakeholders at central, regi onal and local levels are requir ed. Considerable further efforts 
are needed to finalise the legal framework a nd to implement it efficiently across the board. 
Judicial system  
Implementation of judicial reform has contin ued, although the main expected results of the 
reform process are yet to be seen. The Ministry  of Justice underwent a major reorganisation to 
make it more efficient. 
Amendments to the Constitution along with a p ackage of related legislation strengthening 
judicial independence have been adopted. As a result, the appointment procedure to the State 
Judicial Council (SJC) has been improved and it  is now the SJC and no longer the Ministry of 
Justice which appoints Presidents of courts. The President of the Supreme Court will have 
greater control over court management, the five -year probation period for judges has been 
abolished and the Judicial Academy has been made  independent of the Mi nistry of Justice and 
seen an increase in its staffing. A new selecti on procedure and improved criteria for selecting 
judges and prosecutors have also  been introduced, including the establishment of a school for 
judicial officials.  
However, the new system has yet to be tested in practice. The same applies to transitional 
criteria applicable until the fi rst graduates from the school are appointed to judicial positions 
in 2013. Some criteria remain unclear and shortc omings remain in the functioning of both the 
SJC and the State Prosecutorial Council (SPC). Overall, it is important that these bodies 
demonstrate independence and accountability, esp ecially when performing their key functions 
in the area of appointments, discipline and career management, so that effective self 
regulation of the judicial profession is assured.  
Judicial efficiency has improved with the backl og of cases before the courts further reduced 
by 10%, including good progress on reduc ing the number of cases ol der than three years. The 
legal basis for a new system of administrativ e justice was introduced. However, the backlog 
of cases has been reduced unevenly across th e various courts and overall remains high. 
Problems with enforcement of court rulings continue to hamper the efficient working of the judicial system. The handling of administrative cases continues to pose particular challenges. 
The infrastructure and equipm ent of courts, including case management systems, remains 
underdeveloped.   
Croatia continued to try war crimes with approximately two dozen trials on-going in 
2009/2010. A more balanced approach to trials has continued. More cases involving Croat 
perpetrators, including members of the Croati an armed forces, were pursued. The State 
Prosecutor continued reviewing potentially questionable in absentia  verdicts from the 1990s. . 
Measures have been taken to protect witnesses. There have been some attempts to remedy misapplication of the Amnesty Law in cases which could be considered war crimes.  
However, impunity for war crimes remains a problem, especially where the victims were 
ethnic Serbs or the alleged perpetrators were members of the Croatian security forces. Many 
hundreds of cases remain to be investigated  and prosecuted, despite recent action by the 
police and prosecutors. Problems pers ist in certain localities. Insufficient use is being made of 
the specialised war crime courts, although an incr eased willingness to use this possibility is 
evident recently. Where convictions are obtaine d, sentences in war crimes cases are, in 
 
EN 9   EN general, considerably lighter than those imposed for the equi valent underlying crimes not 
classified as war crimes. Wo rk on reviewing questionable in absentia  verdicts from the 1990s 
should continue.  
Overall, the reform of the judiciary has c ontinued, but significant challenges remain, in 
particular application of objectiv e and transparent criteria for the appointment of judges and 
prosecutors, reduction of the case backlog, the excessive length of proceedings and 
enforcement of court decisions. 
(See Chapter 23 - Judiciary and fundamental rights) 
Anti-corruption policy  
There has been good progress in the fight ag ainst corruption. Implem entation of the anti-
corruption strategy and the related action plan  has continued. A specific anti-corruption 
programme for State-owned companies was adopt ed. Overall coordination of anti-corruption 
efforts has improved. The legal framework to co mbat corruption has been further improved. 
However, the anti-corruption sector is unders taffed and further coordination and pro-active 
follow-up of implementation issues are need ed. Legislation on prevention remains under-
developed.  
The Office for the Fight against Corruption a nd Organised Crime (USKOK) continued to be 
active and issued indictments in some importa nt cases. The overall number of cases being 
handled by USKOK has increased, despite the lack of additional resources. USKOK has begun to investigate possible high- level corruption involving seni or political figures. Other 
medium and high-level cases are under invest igation and prosecution, often involving state-
owned companies. The number of court verdicts  has increased. The first high level cases are 
before the courts. The Nationa l Police Office for the Fight ag ainst Corruption and Organised 
Crime (PNUSKOK) was reinforced. 
However, corruption is still prevalent in many areas. The recently upgraded legal and 
administrative structures have yet to be fully tested in practice, particularly the courts’ ability to handle the increased number and complexity of cases. The administra tive capacity of State 
bodies involved in the fight against corrup tion still needs improve ment. The increasing 
number of cases has highlighted some defici encies in PNUSKOK’s and USKOK’s capacity to 
deal with sophisticated fina ncial crimes. A culture of po litical accountability for the 
corruption cases which are coming to light is lacking.  
There has been limited progress in the prevention  of corruption. The office of the commission 
for the prevention of conflicts of interest has be en restructured to give  the commission further 
independence from Parliament. Legal provisi ons have been introduced to depoliticise 
appointments to supervisory boards of state-ow ned companies. However, these measures are 
not yet operational. There has been limited progress in preventing conflicts of interest and 
legal sanctions remain weak. There has been no improvement in applica tion of the legislation 
on access to information. Shortcomings remain in  the financing of political activities and 
election campaigns, particularly regarding transparency and i ndependent oversight. There is 
insufficient scrutiny of and transparency in the execution of public procurement contracts. 
Overall, good progress has been achieved in th e fight against corrupti on, which is receiving 
greater attention than in the past. However,  corruption remains prevalent in many areas. A 
track record of effective investigation, prosecution and court rulings remains to be 
 
EN 10   EN established, especially for high level corruption. Preventive measures such as improved 
transparency in public spendi ng need to be strengthened.  
(See Chapter 23 - Judiciary and fundamental rights)  
2.2. Human rights and the protection of minorities 
Observance of international human rights law As for ratification of human rights instruments , Croatia ratified the European Convention 
on the exercise of children’s rights. 
The ECtHR delivered 24 judgments on violat ed rights guaranteed by the European 
Convention on Human Rights (ECH R) concerning Croatia. A tota l of 912 new applications 
were made to the ECtHR since October 2009. In September 2010, 1,437 cases against Croatia 
were pending before the European Court of Human Rights  (ECtHR). The Court continued 
to find violations regarding the ri ght to a fair trial and length of proceedings under Article 6 of 
the Convention. It has also examined the length of enforcement proceedings. The ECtHR has found violations of Article 13 in  cases of a lack of an eff ective remedy. Such cases involved 
local courts failing to issue verdicts following pr evious judgments on violations of the right to 
a fair hearing and length of pr oceedings at the higher courts. The ECtHR concluded that the 
remedies provided in the domestic legal system in  the form of recourse to the higher courts 
were not effective in those cases. 
The ECtHR has also found violatio ns of Article 6 relating to access to court in cases of 
conflict of jurisdiction between municipal and administrative courts. The Court warned about 
the excessively formalistic approach taken by the administrative courts with regard to the applicant’s human rights. 
As regards promotion and enforcement of human rights  the government continued to take 
various measures to raise public awareness of human rights issues. However, enforcement of 
rights continues to be compro mised by the persisting shortcom ings in administration of 
justice, especially th e length of proceedings. 
Civil and political rights 
With regard to prevention of torture and ill-treatme nt and the fight against impunity,  the 
Ombudsman continued to receive numerous comp laints about police treatment of citizens, 
including excessive use of force. Transparent pr ocedures for establishing police responsibility 
and regulating police activitie s are still not in place.  
As regards impunity, many war crimes are still  unprosecuted, in particular those where the 
victims are ethnic Serbs. The issue of double ci tizenship in the region continues to create 
conditions for impunity. The amendment to the Agreement on mutual enforcement of sentences between Croatia and Bosnia and Herze govina is a significant step towards reducing 
impunity: the convicted person’s agreement is no longer necessary for a sentence delivered in 
one country to be executed in the other. Extrad ition agreements were signed with both Serbia 
and with Montenegro to allow extradition of thei r citizens who are indicted for certain serious 
crimes. These agreements are a significant cont ribution towards reducing impunity within the 
region. Their impact could be further increased in  due course by extending such agreements to 
war crimes. 
 
EN 11   EN As regards access to justice , a new Law on Administrative Court disputes provides for 
introduction, with effect from January 2013, of f our first-instance courts with full jurisdiction  
for the purposes of Article 6 of the Europ ean Convention on Human Rights plus a Higher 
Administrative Court. The Law on legal aid has been implemented with mixed results. 
Measures have been taken to simplify the proce dure and to increase th e fees for lawyers to 
take on legal aid cases. However, procedures re main complicated and the overall level of aid 
provided is low.  
With regard to the prison system , legislation foreseeing a new system of probation from 2012 
was adopted. However, Croatian prisons remain overcrowded and provide inadequate health 
protection.  
Freedom of expression , including freedom and pluralism of  the media, is provided for in 
Croatian law and is generally respected. However,  editors and journalists continue to report 
undue political pressure. There has been limited progress with investig ating threats against 
journalists working on cas es of corruption and organised crim e, with the notable exception of 
one prominent murder case. Problems with the independence of local media remain. The 
public broadcaster HRT continue s to face serious managerial difficulties following several 
unsuccessful attempts by the HRT Programme Council to elect a new director of HRT. This is 
affecting HRT’s functioning. 
With regard to freedom of assembly and association , the overall situation is satisfactory. 
Civil society organisations  (CSOs) continue to play a prominent role in promoting and 
protecting human rights, democracy and minorities. The code for consulting the public in decision-making and the relevant by-laws and implementing procedures have been adopted. 
However, this has not led to significant change s, as CSOs tend to remain excluded from the 
policy-making process. Their participation in th e legislative process is mostly non-obligatory 
and the new system for including the public remains vague. With a few notable exceptions, 
the analytical and financial capacities of CS Os for monitoring political developments and 
government decisions remain weak. The Ministry  of Public Administration retains control 
over the registration and internal governance of  foundations. Efforts remain to be done to 
ensure the independence and sustainability of CSOs.  
There have been no particular problems with exercising the freedom of religion . 
Overall, civil and political rights  continue to be generally well  respected in Croatia. However, 
shortcomings remain with impunity for war crimes, access to justice and freedom of expression.  
Economic and social rights 
There has been some progress with women’s rights  and gender equality. The institutional 
mechanisms for gender equality at central and local government levels have been established. 
The Ombudsperson for Gender Equality contin ued implementing the Gender Equality Act. 
The capacity of the office is currently being strengthened.  
The legislative framework to combat family  violence has improved. The Act on protection 
against domestic violence is being implemente d. In general, the police continued to act 
appropriately in cases of family violence. There have been slight improvements in the work of 
social welfare centres. However, there has been an increase in the numbe r of cases registered, 
 
EN 12   EN including the number of women killed as a resu lt of family violence. Victims of family 
violence do not have sufficient access to in formation on their rights and entitlements.  
The position of women on the labour market has not changed significantly. There has been a 
slight decrease in the percentage of une mployed women. However, unemployment amongst 
women remains high and there are still persistent  gender wage differences. Widespread use is 
still made of fixed-term contracts for women on the labour market. Women continue to be 
under-represented in economic and political decision-making bodies. (See Chapter 19 - Social 
policy and employment) 
There has been limited progress with children’s rights . The Ombudsman for Children 
became more active in promoting and protecting children’s rights, dealing with 2,217 new cases in 2009, predominantly on family violen ce and violence against children. Cases of 
violence in educational institutions continue to occur and are not pr operly addr essed by the 
relevant authorities. Shortcomings in the judici al and social welfare systems, combined with 
the lack of programmes for prev ention of violence, are continui ng to have a negative impact 
on exercising children’s rights. The Ombudspe rson for Children lacks appropriate office 
space and staff to carry out its mandate. Th ere was only a marginal budget increase in 2010. 
There has been some progress on advancing the so cial inclusion of socially vulnerable groups 
and/or persons with disabilities. The capacity  of the Office of the Ombudsman for Persons 
with Disabilities is being strengthened but n eeds to continue, notably in view of extending 
representation in the re gions. There is, however, a lack of  information on social welfare, 
health care and pension insurance rights and entitlements. Criteria for establishment of 
entitlements are not equally applied and legisl ation regulating specific rights is fragmented. 
The transition from institutional care to co mmunity-based care services has progressed 
slowly.  
Public awareness of the rights of  persons with disabilities remains low, especially in rural 
areas, and there are not enough cam paigns against prejudice a nd stereotypes. Regulations 
ensuring physical access for persons with disabilities have been passed.  
Children with developmental difficulties rema in generally excluded from educational 
institutions. There is insufficient support in  the form of access, transport and teaching 
assistants. Persons with disab ilities still face discrimina tion in the labour market. The 
Professional Rehabilitation and Employment Ac t sets minimum quotas for employment of 
persons with disabilities. However, the quotas  set are not met by the public sector. Persons 
with disabilities are even more marginalised  in the private sector where employers lack 
information, in particular  on existing incentives ( See Chapter 19 – Social policy and 
employment).   
People with mental health problems generally rema in in psychiatric institutions which are not 
professionally regulated or ade quately equipped. There is insu fficient assistance to allow a 
greater number of patients to stay with their families or live independently.  
With regard to labour and trade unions rights, the climate for social dialogue has 
deteriorated as a result of the economic crisis. ( See Chapter 19 — Social policy and 
employment)  Trade union organisations have tempor arily suspended their work in the 
Economic and Social Council. Labour and trad e union rights are still adversely affected by a 
weak labour inspectorate and poorly functioning judiciary.  
 
EN 13   EN Implementation of the new Anti-Discrimination  Law has begun. Some steps have been taken 
to raise public awarene ss of the law. However, knowledge of its scope is limited among 
authorities and citizens and only a small number of discrimina tion complaints reach court. 
The People's Ombudsman still faces resource constr aints to fulfil all new functions envisaged 
by the law.  
There has been some progress with implemen tation of hate crime legislation. Awareness 
raising measures have been carried out and so me cases initiated. However, there has been no 
conviction for the criminal offence of instigatio n of racial or other hate crimes. LGBT people 
have faced threats and attacks, with  limited follow-up by the authorities.  
Property rights  are generally safeguarded. However, some cases of delayed repossessions 
and problems with compensation for use of priv ate property taken unde r the war legislation 
from the 1990s persist.  
Overall, legal protection for economic and soci al rights is largely guaranteed. However, 
implementation of women’s and children’s ri ghts and protection against all forms of 
discrimination requires further attention.  
Respect for and protection of minorities, cultural rights 
There has been some progress with respect for and protection of minorities, cultural 
rights . High-level public expression s of commitment to the rights of minorities, reaffirming 
their place in Croatian society, have continue d. A more positive focus on minority issues can 
be reported in a context of im proved relations in the region, pa rticularly between Croatia and 
Serbia. The revised Constitution now explicitly lis ts all 22 national minorities. Provisions of 
the constitutional law on the rights of national minorities on minority representation in parliament were strengthened. Training has been  provided for the media and the police with 
the aim of improving the portrayal of minoriti es and raising awareness of the relevant 
legislation respectively. The Roma minority has continued to receive attention, with 
improvements in pre-school education in par ticular. The level of funding available for 
minority organisations has only been marginal ly reduced, despite the austerity measures.  
However, many problems remain for minorities. Croatia  needs to continue to foster a spirit of 
tolerance towards the Serb minority in particular and to take appropriate measures to protect those still potentially exposed to threats or acts of discrimination, hostility or violence. 
Minorities continue to face particular difficulti es in the area of employment, in terms of 
under-representation in the State administration, the judiciary a nd the police and in the wider 
public sector. There has been no improvement in the level of employment  of minorities in 
bodies covered by the Constitutional Law on the rights of national minorities. Monitoring of 
implementation of recruitment plans for national minorities has been weak. Legal provisions and programmes need to be implemented with more determination and adequate monitoring 
ensured, especially in the case of employment. The Roma minority still faces particularly difficult living conditions. Challeng es also remain in the areas of education, social protection, 
health care, employment and access to personal documents. 
Despite increased financial support, the counc ils for national minorities are not sufficiently 
recognised as advisory bodies by the majority of  local authorities. They remain financially 
dependent on the local authorities, affecting th eir independence and influence. The statutes of 
certain local self-government bodies have not be en aligned with the Co nstitutional Law. Little 
progress has been made with pr oduction and/or broadcasting of programmes for minorities in 
 
EN 14   EN their own language by public radio and TV sta tions, as envisaged und er the Constitutional 
Law. With regard to cultural rights, the education provisions of the Constitutional Law and other laws relevant to minorities are generall y continuing to be implemented satisfactorily. 
Negative stereotyping of national minorities in the media has decreased. The broadcasting of 
anti-minority slogans on national television duri ng a football match highlighted the lack of a 
reflex to condemn such attitudes. 
With regard to the Serb minority , there have been fewer reports of ethnically motivated 
attacks. However, cases of vandalism against monuments for war victims have been reported 
in 2010. Police investigations into such incide nts have improved, although few cases end in 
prosecution. Many cases remain unreported for lack  of confidence in the authorities. Members 
of the Serb minority, both returnees and those w ho remained in Croatia during the war, face 
difficulties gaining access to employment, especia lly in the war-affected areas. Discrimination 
continues, particularly in the public sector at local level.  
As for the Roma minority , improvements in education, partic ularly in pre-school education 
have been made. Some infrastructure improve ments to Roma settlements have continued. 
Problems remain, however, with participatio n by the Roma community in the education 
system, even when specific programmes are ava ilable. Segregation persists in some schools. 
Progress towards ensuring Roma children comp lete primary and seco ndary education has 
been modest.  
Access to adequate housing, social  protection and health care re main persisting problems for 
Roma. Unemployment remains extremely high, de spite measures such as adult vocational 
training for young Roma women. The living c onditions of Roma communities in some 
suburban areas need to be improved by pr oviding adequate housing and infrastructure. 
Coordination between Roma groups remains lim ited, as does their expertise for effective 
implementation of measures in their favour. Ma ny Roma still face the problem of unresolved 
status (residence and citizenship) which creates  difficulties when it comes to provision of 
services, notably access to educati on, health care and free legal aid.  
There has been some progress on the va rious outstanding issues regarding refugees . Refugees 
continued to return to Croatia, with the Cr oatian authorities having  now registered over 
132,600 returnees in total belonging to th e Serb minority, which corresponds to 
approximately half of those who fled the country up until 1995. Some progress was made 
with regard to housing issu es. The government met its self-imposed 2008 benchmark of 
providing 1,400 housing units to former occupa ncy and tenancy rights holders, partially by 
transferring cases to reconstruc tion programmes. A revised acti on plan has been adopted for 
faster implementation of the 2009 target of providing 2,070 accommodation units, with the aim of full implementation in 2011. Administrati ve monitoring has been improved, including 
with the involvement of the United Nationa l High Commissioner for Refugees. A purchase 
option under favourable conditions for housing care beneficiaries outside the areas of special 
state concern has been introduced. Progress wa s made with reconstructing damaged houses 
and with processing the substa ntial backlog of appeals agains t rejected applications for 
reconstruction assistance. Some 900 houses  were included in the 2009/2010 programme. 
Implementation of the decision on validating pension rights has continued. Monitoring to 
address inconsistencies in implementation be tween different regional offices has improved. 
However, many problems remain for refugees and returnees. Lack of housing remains a key 
obstacle to sustainable return. Progress to wards meeting the 2009 benchmark has been 
delayed with implementation at around 31%. Mo reover, 2-3,000 applications not covered by 
 
EN 15   EN the action plans have yet to be fully processe d and housing units made available to returning 
refugees. Sufficient budgetary  funding should be made available accordingly. Some 6,000 
appeals for housing reconstruction are still  pending. The current rejection rate of 
convalidation applica tions is still high at 44%. A more c onsistent approach by regional offices 
is required. Efforts to create the economic and social conditions necessary for sustainable 
returns of refugees n eed to be stepped up. 
Overall,  the position of minorities in Croatia is continuing to improve. However, many 
problems remain for the Serb and Roma minor ities. Some progress was made on outstanding 
refugee return issues, but effort s to provide housing and ensure the sustainability of returns 
need to be accelerated. 
(See Chapter 23 - Judiciary and fundamental rights)  
2.3. Regional issues and international obligations 
Compliance with the Dayton/Paris and Erdut Peace Agreements  has been ensured, overall. 
Croatia continues to cooperate with the International Criminal Tribunal for the former 
Yugoslavia (ICTY). This is a key Accession Partnership priority. Problems with access to 
important documents remain. The special ta sk force set up by the government needs to 
continue its work to locate or determine the fa te of missing artillery documents requested by 
the Office of the ICTY Prosecutor. 
The Supreme Court confirmed the verdict in th e Ademi/Norac war crimes case, the first ICTY 
trial transferred to Croatia. However, it re duced Norac’s prison se ntence, taking his war 
record as a mitigating factor, despite a nother separate conviction for war crimes. 
Croatia’s policy regarding the International Criminal Court (ICC)  is aligned with the EU 
Common Positions on the integrity of the Rome Statute and related EU guiding principles.  
Fresh impetus was given to the Sarajevo Declaration process  following the ministerial 
meeting in Belgrade in March 2010. This brought  together Bosnia and Herzegovina, Croatia, 
Montenegro and Serbia which agreed to work toge ther to clarify refugee statistics. They also 
committed themselves to work towards solutions to a number of outstanding issues by the end of the year. However, there are a number of diff icult issues, in particul ar that of occupancy 
and tenancy rights, which still need to be tackled with the objectiv e of finding mutually 
acceptable solutions.
 The Sarajevo Process was initia lly launched through the Sarajevo 
Declaration of January 31, 2005. Bosnia and Her zegovina, Croatia, Montenegro and Serbia 
cooperate within this process to find solutions  for refugees and other persons which were 
displaced as a result of the arme d conflicts in ex-Yugoslavia 1991 - 1995. 
In August 2010, a total of 14,631 persons were still missing as a result of the conflicts in the 
region. Of these 10,402 cases were  related to the c onflict in Bosnia and Herzegovina; 2,392 
cases to the conflict in Croatia and 1,837 cases to the conflict in Kosovo according to figures provided by the International Committee of th e Red Cross (ICRC). The process for solving 
these cases has been very slow. Only 110 cases pe r year have been solved in the past three 
years in Croatia. Solving the remaining cases within a reasonable time limit is essential for the reconciliation process. In  Croatia, exhumations at known gravesit es are still to take place. The 
number of unidentified cases remains high. More e fforts need to be made in matters related to 
DNA analysis. The Commission on Missing Pers ons – a bilateral forum set-up between 
 
EN 16   EN Belgrade and Zagreb to deal  with the issue – meets only irregularly. The fate of 1,024 
Croatian citizens who are still missing from the 1991-1995 conflict remains to be ascertained. 
Regional cooperation and good neighbourly relations  form an essential part of Croatia's 
process of moving towards the European Union. Croatia continued to participate actively in 
regional initiatives, including the South-East  European Cooperation Process (SEECP), the 
Regional Cooperation Council (RCC) , the Central European Free Trade Agreement (CEFTA), 
the Energy Community Treaty and the European Common Aviation Area Agreement (ECAAA). The newly-elected Croa tian President has been taki ng a pro-active approach to 
regional cooperation. He also participated, with  his counterparts from Serbia and Montenegro 
and the Chair of the Presidency of Bosnia and Herzegovina in the summit of the Igman 
initiative, held in Sarajevo in May. This year marked the 10
th anniversary of the initiative, 
involving more than 140 NGOs from the region a nd aimed at promoting and facilitating local 
and regional cooperation. Croatia participat ed in the EU-Western Balkans High-Level 
Meeting in Sarajevo on 2 June 2010. 
Bilateral relations with other enlargemen t countries and neighbouring EU Member 
States  are continuing to develop.  Progress has been made towa rds settlement of the border 
disputes, which is a key Accessi on Partnership priority. Croatia has contributed to progress in 
tackling organised crime in the region, inter alia  through amendments to its constitution 
allowing extradition of its nationals.  
Croatia continues to ha ve good relations with Albania  and the former Yugoslav Republic of 
Macedonia .  
Bilateral relations with Bosnia and Herzegovina  remain stable and contacts have intensified. 
The Croatian President visited Bosnia and Herzegovina three times. A joint session of the 
Bosnia and Herzegovina Council of Ministers and the government of Croatia was held in 
June. Croatia and Bosnia and Herzegovina signed an amendm ent to the Agreement on the 
mutual enforcement of court decisions in crimin al matters in February. The aim was to close 
the impunity gap and prevent citizens holding dual citizenship evade justice in one country by 
seeking the protection of the ot her. A bilateral agreement on po lice cooperation was signed in 
September. Some progress was made on border issues with the Inter-state Cooperation 
Council meeting in July for the first time in several years. Howeve r, there has been no 
progress on ratification of the 2005 Agreement on demarcation of the land and river borders, 
the Pelješac bridge project and the Ag reement on use of the Port of Plo če. Other unresolved 
issues include property and refugee return and the lack of ratification by Bosnia and 
Herzegovina of the agreement on dual citizenship.  
Croatia continues to have good relations with Montenegro . A bilateral extradition agreement 
was signed in September, enabling the two countri es to extradite their nationals to each other 
for criminal proceedings or enforcement of prison sentences in cases of organised crime and corruption. A political agreement with Montenegro  on joint submission of the Prevlaka border 
delimitation issue to the International Court of Justice has not yet been followed up by a formal agreement on the terms of the subm ission. Nevertheless, the temporary border 
arrangement, settled by the 2002 Protocol , is continuing to function smoothly. 
Relations with Serbia  have gained new impetus with the taking of office of the new Croatian 
President. There have been a number of meeti ngs of the two Presidents and other senior 
officials. A Serbian parliamentary delegation visited Zagreb in February 2010 and a return 
visit was made by the Croatian parliament in June 2010. The Croatian President visited Serbia 
 
EN 17   EN in July 2010. Croatia and Serbia signed agreem ents on military coop eration and on inland 
water navigation. A Police Cooperation Agreement entered into force in May 2010. Croatia and Serbia signed an extradition agreement in June, enabling the two countries to extradite 
their nationals to each other for criminal proc eedings or enforcement of prison sentences in 
cases of organised crime and corruption. The Inter-State Border Commission set up to delimit the border met again in April after seven years of inactivity . In December 2009, the Serbian 
government lodged a counter-suit against Croatia before the Internationa l Court of Justice on 
genocide allegations. The issue of missing persons is still problematic. 
Diplomatic relations were officially established with Kosovo
4 and embassies were opened in 
Pristina and Zagreb respectively. 
Croatia continues to have good relations with Hungary and Italy.  
Relations with Slovenia  have improved significantly, in par ticular following the signing of the 
Arbitration Agreement on the border in Novemb er 2009. Both parliament s have ratified the 
agreement. Contacts at the highest level have  been on-going aimed at resolving other open 
issues. Concerning the Ljubljanska Banka/SFR Y Succession Agreement (guarantee of foreign 
currency deposits), Croatia agre ed to continue negotiations on the issue at the Bank of 
International Settlements in Basel. 
Relations with Turkey  intensified as a result of the establ ishment of regular tripartite meetings 
between Croatia, Turkey and Bosnia and Herzegovina, the first of which was held in January 2010. 
Overall,  Croatia is continuing to cooperate with  the ICTY, although problems with access to 
important documents remain. Croatia is con tinuing to participate actively in regional 
cooperation. Relations with neighbouring countries have  improved, although outstanding 
issues remain, in particular settlement of border disputes, property issues and returns of 
refugees.  
3. E
CONOMIC CRITERIA  
In examining the economic developments in Croatia, the Commission’ s approach was guided 
by the conclusions of the Eur opean Council in Copenhagen in June 1993, which stated that 
membership of the Union requires the existe nce of a functioning market economy and the 
capacity to cope with competitive pressure  and market forces within the Union. 
3.1. The existence of a functioning market economy 
Economic policy essentials Croatia is participating in the EU pre-acce ssion fiscal surveillance procedure. The Pre-
accession Economic Programme (PEP) for 2010-2012, submitted in January 2010, presented a sufficiently comprehensive and consistent macr oeconomic and fiscal framework for economic 
policies. In April 2010, in res ponse to the continuing recessi on, the government launched the 
'Economic Recovery Programme' consisting of some fiscal measures and comprehensive 
structural reforms to be implemented over ten years. Broad political consensus on the 
                                                
 
4 Under UNSCR 1244/1999 
 
EN 18   EN fundamentals of a market economy was maintained. Overall , consensus on the fundamentals 
of a market economy was maintained, but effort s need to be intensified to implement the 
necessary structural reforms. 
Macroeconomic stability 
The global financial and economic crisis hit the Croatian economy most se verely in the first 
quarter of 2009, when real GDP dropped 6.7% year-on-year. For 2009 as a whole, GDP 
declined 5.8% compared to 2.4% annual growth  in 2008. GDP-per-capita in current prices 
rose to 43.2% of the EU-27 average in 2009 fr om 42.5% a year before. Private consumption 
fell sharply (from 0.8% growth in 2008 to a dr op by 8.5% in 2009) and investments fell even 
more (from 8.2% growth in 2008 to a drop by 11.8% in 2009). In comparison, the deceleration of public consumption was relativel y mild (from 1.9% growth in 2008 to 0.2% in 
2009). As economies contracted worldwide, expor ts from Croatia suffere d a sharp contraction 
(from 1.7% growth in 2008 down to -16.2% in 2 009). The decline in im ports was even more 
pronounced (from 3.6% growth in 2008 to a drop by 20.7% in 2009). As a consequence, the contribution of net exports to growth turned positive which offset much of the negative contribution from domestic demand. The decline in economic activity eased in the course of 
2009, but output was still contracting in the firs t half of 2010. Real GDP is estimated to have 
been 2.5% lower year-on-year in both the firs t and second quarters of 2010. Similarly to GDP, 
the downward trend in industrial production star ted to flatten out in mid-2009 following a 
10% decline in the preceding twelve months . In August 2010 industrial production was only 
0.7% lower year-on-year. Overall , economic recovery had not yet taken hold by mid-2010 
although the rate at which the economy was contracting had receded over the preceding 
twelve months. 
The government launched the Economic Recovery Programme in April 2010 when incoming 
data showed that the economy was not yet recovering from th e recession and fiscal trends 
were more unfavourable than expected. Apart fr om some fiscal measur es, the programme is a 
package of structural reforms which seek to address the structural weaknesses of the economy 
and aim to create an environment encouragi ng sustainable economic gr owth. It encompasses 
basically all existing strategy papers and development documents and provides a new basis 
for economic policy in the country. The programme  includes 131 measures in ten areas to be 
implemented over ten years. Among other things , it aims at reducing the number of public-
sector employees, privatising state-owned ente rprises and cutting non-tax revenue, but it also 
includes a vast number of measures in other fi elds such as labour market policy, education 
and science policy, social security, export and investment promotion, government asset 
management, environmental protection, etc. Overall , the contribution which the Economic 
Recovery Programme makes to improving the ec onomy’s growth potential and international 
competitiveness will depend on its effective implementation. 
The current account deficit narrowed to 5.4% of GDP in 2009 from 9.2% in 2008. This was 
driven by an improving balance of trade in goods. Since the recession led to a stronger decline 
in imports than in exports of  goods, the trade deficit in goods fell from 22.8% of GDP in 2008 
to 16.3% in 2009. The trade surplus for services (mainly tourism a nd transport) declined from 
14.7% of GDP in 2008 to 12.5% in 2009. The deficit in the income balance increased slightly, 
from 3.3% of GDP in 2008 to 3.9% in 2009. Like in 2008, this mainly reflects higher debt 
servicing costs in an environmen t of tighter external financing constraints and lower foreign 
revenues. In the first half of 2010, the current account deficit c ontinued to narrow as imports 
of goods and services decrease d by 6.6% year-on-year while e xports increased by 6.2%. The 
recent turnaround in exports reflects the recovery in major export markets. In the 12-month 
 
EN 19   EN period to the end of June 2010 the current  account deficit amounted to 3.1% of GDP. Overall , 
the current account deficit has been narrowing in  the recession mainly as a result of lower 
demand for imported goods, but recently  also thanks to rising exports.  
Net capital inflows recede d in 2009 and the first half of 2010 as a coro llary of the declining 
current account deficit. Excluding changes in in ternational reserves, they fell from 11.7% of 
GDP in 2008 to 9.2% in 2009. In the 12-month pe riod to the end of June 2010 they amounted 
to 3.7% of GDP. This decline is to a large extent accounted for by a sharp fall in inward foreign direct investments (FDI), but borrowing ab road has also decreased, particularly in the 
first half of 2010. Inward FDI al most halved in absolute term s and, as a share of GDP, fell 
from 8.8% in 2008 to 4.7% in 2009. Outward FDI remained stable at 2.0% of GDP over the 
same period. While net FDI flows covered 74% of the current account deficit in 2008, this 
figure fell to 49% in 2009. The structure of  FDI remained unchanged, i.e. dominated by 
equity investments, including some recapitalisations  in the banking sector. In the first half of 
2010, FDI inflows declined by 32.0% year-on-y ear. The total stock of FDI stood at €24.4 
billion (around 54% of GDP ) at the end of March 2010. Overall , in the context of a declining 
current account deficit, sufficient external fi nancing was secured despite lower net capital 
inflows.  
The heavy external debt burden continued to increase in 2009. The stock of external debt 
went up by €4 billion to €43.1 billion (excluding round-tripping transacti ons), equivalent to 
95.0% of GDP compared with 82.6% at the end of 2008. The rise in ex ternal indebtedness 
was mainly driven by corporate borrowing, but the central government also increased its 
foreign debt by around €1 billion. The fact th at the non-tradable sector accounts for around 
40% of gross foreign debt remain s a cause for particular concern. Overall , the high and 
growing level of external debt and the relativel y large exposure of the non-tradable sector to 
currency risks remain key external vu lnerabilities of the Croatian economy . 
The average annual unemployment  rate was 9.1% in 2009. The qua rterly data from the labour 
force survey show that the unemployment rate started rising in the last quarter of 2009 and 
reached 12.4% in the second quarter of 2010, up from 8.7% in the third quarter of 2009. Data 
on the number of people registered as unemployed confirm this change of  trend. This measure 
of the unemployment rate rose from 13.2% in 2008 to 14.9% in 2009 and stood at 16.4% in 
August 2010. Total employment was 4.8% lower yea r-on-year in the se cond quarter of 2010 
according to the labour force survey. The Croatian labour market continues to suffer from major structural weaknesses, such as low empl oyment and participation rates along with high 
rates of youth and long-term unemployment. The employment and participation rates declined 
to 56.6% and 62.4%, respectively, wh ile the youth unemployment ra te increased to 25.1% in 
2009. The effective retirement age remained lo w and significant labour supply disincentives 
persisted, including generous ear ly retirement rules and the predominance of categorical 
social welfare benefits. Employment has be en negatively affected by Croatia's limited 
progress on improving incentives stru ctures and the combination of flexibility and security in 
the labour market. As a result, labour turnover remained low,  suggesting limited re-allocation 
of labour resources. Wage movements reflected the weakening of the labour market. Average 
gross wages still increased by 3.0% from 2008 to 2009, but then recorded a year-on-year 
decline of 0.6% in the first ha lf of 2010. In real terms, aver age gross wages increased by 0.6% 
in 2009, but fell by 1.3% year-on-year in the first half of 2010. Overall , the labour market 
situation deteriorated signifi cantly as a result of the recessi on. Major structural weaknesses 
persist in the labour market. 
 
EN 20   EN Monetary policy continued to be oriented towa rds a tightly managed kuna/euro exchange rate 
with little variability, but wit hout a formal peg to the euro. This monetary policy framework 
anchors inflation expectations and reduces exchange rate-rela ted credit risks in a highly 
euroised economy. Under the recessionary conditions of 2009, with intermittent upward 
pressure on the kuna, it allo wed a slight easing of moneta ry policy. The central bank 
expanded domestic kuna liquid ity in line with available foreign exchange resources. It 
released significant foreign exchange liquidity  to the domestic banking system by removing 
the 12% annual credit growth lim it and by relaxing reserve and liquidity requirements. The 
central bank intervened in the foreign excha nge market on six occasions between October 
2009 and July 2010 to counter appreciation pr essures on the kuna, purchasing a total of 
around €869 million. Overall foreign excha nge operations in 2009 increased gross 
international reserves by 13.8% to €10.4 billion at the end of  2009. Their rise continued in 
2010, reaching €11.4 billion at the end of August wh ich is equivalent to  around seven months 
of imports of goods and services. The average daily exchange rate fluctuated within a 
relatively narrow range between 7.19 and 7.33 kuna per euro. Overall , the central bank has 
adopted an accommodative monetary policy stance during the recession, while maintaining exchange rate and financial stability. 
The growth rate for domestic m onetary and credit aggregates fell sharply in 2009. Growth of 
domestic credit to the privat e sector decreased from 10.5% in 2008 to -0.6% in 2009. Lending 
to private households was sign ificantly lower (-2.9%) whereas lending to the corporate sector 
still increased (2.0%). These di verging trends continued in th e first seven months of 2010. 
While loans to households remain ed stagnant, corporate loans s howed a mild recovery with 
an annual increase of 5.4% at the end of July. Al most half of the recent increase in corporate 
loans was related to the government's programme  to stimulate corporate financing through the 
State Development Bank (HBOR). Lending to the government sector has increased markedly. 
Overall , credit growth to private households has fallen to close to zero, lending to the 
corporate sector has shown signs of recovery , and the structure of credit has continued 
shifting towards government financing. 
Average annual inflation fell sharply from 5.8% in 2008 to 2.2% in 2009. The disinflationary 
process was primarily driven by the growing slack in the use of resources transmitted to price- 
and wage-setting. Additional reasons were the collapse in oil prices between mid-2008 and 
the second quarter of 2009 a nd the worldwide decline in food prices. The slowdown in 
inflation in 2009 was mitigated by significant in creases in the regulated prices for gas, 
tobacco products and medical services. Core  inflation, as defined by the central bank, 
declined from 5.7% in 2008 to 2.8% in 2009. Notwithstanding a rebound in energy prices, 
disinflation has continued in 2010. The July readings of overall consumer price inflation and 
core inflation stood at, respectivel y, 1.0% and -1.4% year-on-year. Overall , inflation has 
practically vanished in the c ontext of the prolonged recession. 
Public finances continued to be under pressure from  weaker-than-expected economic activity 
in the final months of 2009 ev en after three budget revision s earlier in the year. Although 
current spending was cut at short notice, the target for the 2009 general government fiscal 
deficit was missed by a wide margin (-4.1% of GDP compared with -3.4% in the third budget 
revision). Revenues continued to fall short of gove rnment projections in the first half of 2010 
as the recession dragged on for longer than ex pected, forcing the govern ment to increase its 
borrowing programme. The 2010 budget adopted in  December 2009 had projected a general 
government fiscal deficit equiva lent to 3.3% of GDP, but it so on became clear that the deficit 
would rise rather than fall compared with  2009. In addition to the prolonged recession, a 
number of fiscal measures adopted in the firs t half of 2010 were projected to have the net 
 
EN 21   EN effect of widening the deficit somewhat. On th e revenue side, the 2% special crisis levy was 
lifted and tax rates were lowered, partly offset by the abolishment of numerous tax exemptions. On the expenditure side, several benefits were reduced (including privileged 
pensions and supplementary health insurance bene fits paid from the budget). In view of the 
worsening fiscal outlook, a budget revision was a dopted at the end of August, this time based 
on the assumption of a 1.6% decline in re al GDP in 2010. The revised budget lowered 
projected revenues of general government by 4.5% of GDP and increased expenditures by 
0.3% of GDP compared with the original budg et. The projection for the general government 
deficit was raised by 1.9 percen tage points to 5.2% of GDP. As  part of the budget revision, 
excise taxes on tobacco and petr ol were raised, increasing annu al revenues by 0.15% of GDP. 
Furthermore, it was decided that total budget expenditures in 2011 and 2012 would not 
exceed the revised expenditure level for 2010. According to the latest data submitted by 
Croatia in September 2010, the stock of general government consolidated gross debt increased 
significantly from 29.3% of GDP at the end of  2008 to 35.4% at the end of 2009 and 37.0% in 
mid-2010. When outstanding state guarantees and the debt of the State Development Bank 
(HBOR) are included, the level of public de bt amounted to 53.5% of GDP in mid-2010. 
Overall , the authorities made limited efforts to contai n the continuing rise of the fiscal deficit. 
Weaknesses remain in budget planning, posing a risk that budget outcomes will continue to 
diverge significantly from budge t projections. Ensuring medium-t erm fiscal sustainability 
remains a key challenge. 
Limited progress has been made on rationalis ation of public spending, which is a key 
Accession Partnership priority. Some further hea lth reform measures have been adopted as a 
major step towards addressing the sector’s fi nancial difficulties. Thes e include streamlining 
the hospital network and the supplementary hea lth insurance system. No specific action has 
been taken so far to achieve better targeting of social support, but th is is now planned under 
the Economic Recovery Programme. Some mandat ory benefits have been reduced, but they 
still account for the large major ity of social spending. A first st ep has been made on reforming 
the pension system with th e adoption of a law on priv ileged pension reduction. Overall , apart 
from some key measures to reform health care, little progress has been made towards 
increasing the efficiency of public spending.  
Implementation of a comprehensive treasury reform strategy has continued with a view to 
further improving expenditure management and budget control systems following the entry into force of the 2008 Budget Law which has impr oved the legal basis for strategic and multi-
annual budget planning. Progress continued on e nhancing the instituti onal and analytical 
capacity for setting up medium-term macroeconomic  and fiscal frameworks. However, further 
progress on streamlining procedures is needed to link the policy priori ties set to the budget 
planning process more effectively. The fiscal  notification was submitted in April 2010, but 
little progress was made towards bringing this re porting more in line with ESA95 standards. 
Fiscal transparency remains a concern, due to  the non-inclusion in the general government 
accounts of some quasi-fiscal operations (the  State Development Bank and the Motorway 
Company) and a large numb er of municipalities. Overall , analytical and institutional capacity 
on public finance has continued to improve, bu t strategy-based budget planning needs to be 
strengthened further.  
Overall, the short-term macroeconomic policy re sponse has, by and large,  been appropriate to 
address the domestic consequences of the gl obal economic and financial crisis. Within the 
constraints ensuing from the high degree of euroisation, monetary policy succeeded in 
preserving exchange rate and financial stability while alleviating liquidity pressures. Fiscal 
policy has, to a limited extent, tried to contai n the negative budgetary consequences of the 
 
EN 22   EN recession. To achieve medium-term fiscal sust ainability, key challenges remaining are to 
improve the budgetary process an d discipline and to enhan ce the efficiency of public 
spending.  
Interplay of market forces 
Privatisation of assets held under the State Pr ivatisation Fund made only limited progress. As 
regards the shipbuilding sector which generates revenues equivale nt to about 2.5% of GDP, a 
restructuring and privatisation is ongoing ( see also Chapter  8). The only significant 
privatisation executed in  the reporting period was the sale of a food-processing enterprise. A 
number of calls for tenders have not been suc cessful, partly due to la ck of interest among 
potential investors and, in some  cases, rather unrealistic sale conditions. The portfolio of the 
Privatisation Fund still comprised 768 companies, w ith the state keeping a majority holding in 
79 of them. The overall size of the Fund’s portfolio has remained virtually unchanged. Since 
the remaining holdings of the Fund consist pred ominantly of highly indebted and loss-making 
companies, finding strategic partners is a lengt hy process, requiring several stages prior to 
declaring bankruptcy or li quidation. However, adoption of the Economic Recovery 
Programme and the transfer of all the state’s minority share-holdings (below 25%) to the 
Privatisation Fund should help to  speed up the privatisation pro cess. Also, some initial steps 
have been taken to restructure the Fund into a new Property Management Agency that would 
combine and ensure better management of all st ate property. The private sector’s share of 
employment has remained at around 70% and its  share of GDP is also estimated at around 
70%. Overall , very limited progress has been made to wards reducing the large role of the 
state in the economy. 
Market entry and exit 
Company registration procedures  were further simplified in November 2009. Nevertheless, 
preliminary data indicate that the number of newly registered companies declined by 14% in 
2009 year-on-year and the number of active businesses remained practically unchanged 
compared with a 12% growth rate in the pr eceding year. The regulatory impact assessment 
authority came into operation in late 2009 and a set of measures to improve the investment 
climate have been adopted as part of the Economic Recovery Programme. The investment 
climate, however, still suffers from diffic ulties in obtaining necessary licences, building 
permits and other authorisations . In addition, a large number of para-fiscal taxes at national 
and local levels still burden entrepreneurs although some of them have been reduced in 
tourism, forestry and the cultural heritage sect or. The business environm ent also continues to 
suffer from inefficiencies in the public administ ration. Foreign direct investment is held back 
by the various shortcomings in the business environment. Overall , further progress has been 
made on simplifying company registration, but th e investment climate continued to suffer 
from a heavy regulatory burden and numerous  para-fiscal taxes. Improving the business 
environment remains a key Accession Partnership priority.   
Legal system 
Further progress was made in speeding up c ourt procedures. However, the length of 
proceedings before the courts remains generally excessive and problems persist with enforcement of court decisions. The weaknesses of  the judicial system continue to undermine 
effective enforcement of creditor and propert y rights. Land registra tion has improved, but 
remains incomplete in parts of the country. In vestors still suffer from lengthy procedures to 
register property. Corruption is  being tackled more vigourosuly but still affects the business 
 
EN 23   EN environment. Overall , the judicial system has been improved although the enforcement  of 
property rights is still weak. The business envi ronment is also affected negatively by other 
remaining inefficiencies. 
Financial sector development 
The financial sector continued to be domi nated by banks which held around 77% of total 
assets of financial intermediari es in 2009. The banking sector is almost completely privatised 
with 91% foreign ownership in terms of net assets. Out of 32 banks (down from 33 in the 
previous year following the merger between  two banks), two remained state-owned. The 
market share of the four largest banks re mained at around 65% by March 2010. Market 
concentration has remained at a moderate level and has generally not hindered market 
competition.  
Banking sector assets continued to grow, but at a slower pace,  and the structure of assets 
changed considerably. This is due to a reduction of banks’ foreign assets and reserves with the 
central bank, as a result of regulatory chan ges. Lending to the private sector slowed, 
particularly to households, reflecting lower dema nd and higher risk awareness on the part of 
banks in the context of the globa l financial crisis. However, le nding to the government sector 
increased strongly, more than offsetting the overa ll decline in le nding to the private sector and 
resulting in 2.3% growth in total bank lending over 2009. In te rms of GDP, total bank lending 
rose from 72.1% at the end of 2008 to 75.8% at  the end of 2009. In the first seven months of 
2010, total bank lending increased  by 4.7% although lending to hou seholds remained almost 
stagnant. Overall , the largely private and foreign- owned banking sector remained the 
dominant part of the financial sector as a whole, with a moderate degree of market 
concentration.  
The banking sector remained well capitalised  as a result of previous prudential and 
supervisory measures to address potential m acro-financial vulnerabi lities. The capital 
adequacy ratio increased from 15.9% in mid-2009 to 19.2% in mid-2010. This was partly caused by the adoption of Basel II standards regard ing the calculation of the capital adequacy 
ratio and partly a consequence of the relative shift in lending from the private to the government sector. The profitability of banks d eclined in parallel with business conditions 
and pre-tax income was 20% lower year-on-year  in the first half of 2010. The share of non-
performing loans increased significantly from 4.9% at the end of 2008 to 7.8% by the end of 
2009 and 9.5% in mid-2010. At the same time,  the banking system continued to face 
considerable interest- and currency-related credit  risks as the majority of loans are based on 
variable interest rates and denominated in (or indexed to) foreign currencies, predominantly the euro. Developments affecting the stability of the financial sector have been kept under 
close watch by the central bank, which enhanced it s institutional and anal ytical capacity to 
produce assessments of the stability of the sector. Overall , the banking sector remained 
relatively resilient to shocks, but significant ri sks are posed by largely un-hedged liabilities of 
the non-financial private sector.  
The share of non-banking financial sector assets in  total financial sector assets declined from 
26% at the end of 2008 to 23% at the end of 2009. This was larg ely due to the poor 
performance of investment funds which su ffered significant share price falls and cash 
withdrawals in the context of the global financia l crisis. At the same time, leasing companies 
and the insurance sector gained in both absolute and relative terms. After losing almost 70% in 2008, the stock market index re covered by 16% in 2009.  Over the first ni ne months of 2010 
the index has declined by about 4%. Market capit alisation of shares list ed on the Zagreb stock 
 
EN 24   EN exchange totalled 53% of GDP at the end of 2009 compared with over 100% before the 
financial crisis. Market capitalis ation of all listed bonds rose fr om 10% of GDP to 11% in the 
course of 2009, as a result of a slight incr ease in bond prices and some new bond issues. 
Overall , notwithstanding the growth of some market segments, fi nancial intermediation by the 
non-banking sector remained relatively modest. The stock market has onl y partially recovered 
from the sharp losses during the financial crisis.  
3.2. The capacity to cope with competitiv e pressure and market forces within the 
Union 
Existence of a functioning market economy The policy response to the global economic and financial crisis has, by and large, been 
appropriate. A prudent response by the monetary  authorities and efforts, albeit limited, to 
contain the fiscal deficit have helped to anc hor the expectations of economic operators and 
supported market mechanisms. The count ry has a functioning market economy. 
Endowment with human and physical capital 
Educational reforms have continued under the 2005-2010 development plan for the education 
system. Further steps were taken to improve the quality of education at all levels, including in 
the form of training of teachers. Additional efforts have been made to develop a national 
qualifications framework. Higher education has been  further aligned with the principles of the 
Bologna process, although tertiary education generally conti nues to suffer from inefficiencies, 
poor governance and lack of funding. Further pr ogress has been made towards developing a 
knowledge-based economy. The ICT infrastructure is relatively well developed, with high 
internet and broadband penetration rates. 
The government continued to implement labour market policies on the basis of the National 
Employment Promotion Plan. Measures includ e training and employme nt subsidies for young 
people without work experience, the long-te rm unemployed, older persons and vulnerable 
groups. On top of this, a set of measures  were adopted under the Economic Recovery 
Programme to make the labour market more dynamic. Some of these have already been 
implemented by May/June 2010, for example the introduction of a syst em of volunteering, 
apprenticeships, work practice and internships. However, structural problems persisted, as 
indicated by the high rate of youth unemployment and low em ployment and participation 
rates. Overall , in spite of various  policy measures, structural weaknesses in the labour market 
remain major challenges. 
Investment declined sharply in  2009 and in the first half of  2010, mainly due to a slowdown 
of construction activity. As a share of GDP, investment fell from 27.6% in 2008 to 24.7% in 
2009. The decline in investments in processing  and manufacturing industry has harmed the 
prospects for faster technologi cal change, a more diversifie d production struct ure and higher 
export potential. Public investments slowed down a little, but remained significant, in 
particular in the motorway network. The larges t share of cumulative FD I inflows is accounted 
for by the financial sector (37%), followed by manufacturing (25%) and wholesale and retail 
trade (16%). The long-standing shor tage of greenfield FDI remains. Overall , investment 
declined in the context of the recession a nd continued to concentrate on transport 
infrastructure and the services sector.  
Sector and enterprise structure 
 
EN 25   EN Restructuring the shipyards in difficulty is a key Accession Partnership priority. The tendering 
procedure for the yards was completed in  May 2010. Implementation of the National 
Restructuring Programme (NRP) for the steel sector has been disr upted by the global 
economic crisis. Therefore, the NRP, as well as  individual business plans, will have to be 
revised (see Chapter 8) . Very limited progress has been made with restructuring the large 
loss-making railway company and pr ivatising subsidiaries. Only two out of eight subsidiaries 
were privatised and one underwent bankruptcy pr ocedures. The railways continue to receive 
high levels of budget support. Overall , although the tendering of the shipyards for 
privatisation has proceeded, considerable furthe r work will have to be done by the state to 
restructure or liquidate the yard s that are no longer viable. Sustained effo rts are required to 
complete the restructuring of the steel industry a nd railways to ensure th eir long-term viability 
and competitiveness.  
The telecommunications industry was further li beralised. The Croatian Telecommunications 
Agency continued activities aimed at stimulating competition by improving market access to new service-providers. This led to  further price reductions and to  a larger choice of tariff 
packages for customers. Liberalisation of the energy sector continued gradually and network 
rules for gas transport and distribution have been enacted. However, gas and electricity 
markets remain dominated by single suppliers, preventing effective competition. The 
restructuring of the large electr icity company has not advanced. Overall , despite further legal 
and regulatory adjustments, competition in  network industries remains constrained by 
dominant incumbent suppliers. 
The already large services sector increased its share of total gross valu e added from 65.0% in 
2008 to 66.0% in 2009, the share of industry fell from 20.2% to 19.1%, the share of 
construction decreased slightly from 8.3% to 8.0% , and the share of agriculture, forestry and 
fishing increased from 6.4% to 6.7%. While th e share of construction in total employment 
remained practically unchanged at just below 9%, the share of industry declined from 21.6% 
to 20%. Agriculture’s share of employment increased slightly from 13.6% to 14.1%.  
In 2009, small and medium-sized enterprises (SME) accounted for around 40% of the 
corporate sector’s total assets, 66% of total employment and 46% of total investment. SMEs 
generated 55.7% of GDP
5 and more than 42% of total expo rts. Except for investment where 
the share declined from 65%, those indicators  remained virtually unc hanged compared with 
the previous year. In order to support the SM E sector, the government adopted an operational 
plan for 2010 and a set of measures under the Economic Recovery Programme. The State 
Development Bank (HBOR) was further strengthened  financially to increase lending to SMEs 
on more favourable terms. Still, the sector con tinued to suffer from a cumbersome regulatory 
framework and inefficiencies in public ad ministration. Access to longer-term financing 
remained difficult, particularly for newly established businesses. Overall , while the SME 
sector continued to benefit from significan t government support, its share in the overall 
economy has not increased.  
State influence on competitiveness 
The role of the Competition Agency in m onitoring and controlling state aid has been 
strengthened. Administrative capacity and enforcement of competition policy continue to improve. Public subsidies remained unchanged at  the high level of 2.4%  of GDP in 2009 and 
                                                
 
5 Measured according to the Croatian definition of SMEs, this share is 44%, unchanged from last year. 
 
EN 26   EN a large share still went to loss-making companies. Although horizontal aid has increased 
relative to sector-specific aid, it still accounts for only a small share of total subsidies. Overall , state intervention in the enterprise sector remained substantial.  
Economic integration with the EU 
Croatia is an open economy with total trade in goods and services accounting for around 75% 
of GDP in 2009. This ratio declined significan tly from 92% in 2008 due  to the worldwide 
contraction of trade. Apart from  exports of machinery and tran sport equipment (mainly ships), 
tourism remained the biggest source of e xport revenue, generating 14% of GDP in 2009. The 
EU has continued to be Croatia’s  largest trading part ner. Its share of to tal Croatian exports 
and imports remained at around 60% and 63% re spectively. CEFTA countries accounted for 
10.5% of all Croatian trade in 2009, but this share decreased to 9.7% in the first seven months 
of 2010. Over this period, CEFTA countries gene rated 5% of total impo rts into Croatia and 
18% of all exports from Croa tia. Around 95% of FDI inflows originate from EU Member 
States. Overall , integration with the EU in the areas of trade and investment remained high.  
The average nominal effective exchange rate  for the kuna was 2.7% lower in 2009 than in 
2008 mainly due to a significant fall in the av erage exchange rate be tween the kuna and the 
US dollar. However, since in flation was higher in Croatia than among its main trading 
partners, the nominal depreciation was not turned  into a noticeable, if any, improvement in the 
international competitiveness of the Croatian economy. In annual average terms, the kuna’s 
real effective exchange rate was 0.5% lower year-on-year wh en using consumer prices as 
deflator and 2.8% higher when  using producer prices. Unit labour costs suggest a slight 
depreciation of the kuna in real effective terms in 2009. Overall , standard indicators point to 
no significant change in Croatia’s international price competitiveness. 
4. A
BILITY TO ASSUME THE OBLIGATIONS OF MEMBERSHIP  
This section examines Croatia’s ability to assume the obligations of membership – that is, the 
acquis as expressed in the Treaties, the secondary legislation and th e policies of the Union. It 
also analyses Croatia’s administ rative capacity to implement the acquis . The analysis is 
structured in accordance with the list of 33 acquis chapters. In each sector, the Commission's 
assessment covers progress achieved during the reporting period, and summarises the 
country's overall level of preparations. 
4.1. Chapter 1: Free movement of goods 
Good progress can be reported towards alignment on general principles . Croatia has almost 
completed implementation of its action plan for compliance with Articles 34 to 36 of the Treaty on the Functioning of the European Union (TFEU).  
In the area of horizontal measures , good progress can be reported. Adoption of a revised Act 
on technical requirements for products and on conformity assessment further aligned the 
Croatian legislation with the acquis . Further improvements are necessary to align the Croatian 
legal framework fully with the new horizontal acquis .  
As regards standardisation, good progress can also be reporte d. The Croatian Standards 
Institute (HZN) has transposed nearly all Euro pean standards (ENs). The HZN became a full 
member of the European Committee for St andardisation (CEN) a nd of the European 
Committee for Electrotechnical Standard isation (CENELEC) in January 2010.  
 
EN 27   EN In the field of conformity assessment , no further developments can be reported. 
Good progress has been made in the area of accreditation . The Croatian Accreditation 
Agency (HAA) has so far accredited a total of  193 conformity assessment bodies. In April 
2010, HAA became a signatory to the European  Cooperation for Accreditation Multilateral 
Agreements (EA MLA) in the eight main fields.  
Alignment with the acquis  in the area of metrology  is advanced. Collaboration has been set up 
between the State Office for Metrology and th e new National Metrology Institute (NMI). 
Transferring responsibility for scientific metrology to the NMI remains the main outstanding 
issue in this field.  
Regarding market surveillance , there has been further progre ss with the State Inspectorate’s 
administrative capacity and enforcement measur es. Activities on market surveillance have 
intensified. An e-register system is compulsory  for inspectors. Training  has been provided to 
inspectors. Alignment in the field of market surveillance is well advanced. However, further 
measures are still needed to fulfil all th e market surveillance requirements of the a cquis . 
Overall, as regards horizontal measures, basic structures for harmonisation with EU 
legislation are in place.  
There has been good progress in relation to the old approach product legislation, with the 
adoption of a number of regulations. As regard s medicinal products, Croatia has continued to 
transpose the acquis . It has adopted implementing legisla tion establishing the procedures and 
criteria on price-setting, inclusion of medici nal products in the reimbursement lists and 
marketing authorisation. These ordinances, wh ich entered into force in January 2010, provide 
for alignment with the procedural obligations imposed by the acquis . Further efforts are 
needed to achieve full alignmen t and implementation of the legi slation (in part icular in the 
fields of textiles, footwear, pre-packaging and aerosol dispen sers) and proper implementation 
and to ensure the necessary administrative capacity.  
Alignment with the new and global approach product legislation  is well on track. 
Regulations have been adopted in many areas. However, furt her efforts are still needed, 
particularly on toy safety, machinery, recreatio nal craft, non-automatic weighing instruments 
and eco-design requirements for energy-using products.  
Some progress has been achieved on procedural measures , for which alignment is advanced. 
The Regulation on notification procedures in the field of standards, technical regulations and 
regulations on information society services was revised. This fu rther transposed key elements 
of the acquis.  A central contact point has been establ ished within the Ministry of Economy, 
Labour and Entrepreneurship to facilitate coope ration between the ministry and other central 
State departments and operators. Alignment of procedural measures is advanced, but further 
efforts are still needed to transpose fully the acquis  governing acquisition and possession of 
weapons .  
Conclusion 
Good progress has been made in the field of free movement of goods. Alignment with the 
acquis  in this chapter is well advanced. However, further efforts are necessary, particularly on 
conformity assessment, metrology and specific le gislation on product safety. Croatia needs to 
 
EN 28   EN complete alignment with the acquis  and to strengthen its capacity in order to ensure effective 
implementation and enforcement of the acquis  upon accession.  
4.2. Chapter 2: Freedom of movement for workers 
Croatia largely fulfils the acquis  requirements on access to the labour market .  
Continued good progress can be reported to wards future participation in the EURES  
(European Employment Services) network. As re gards services related to mobility and free 
movement of labour, the organi sational structure of the Croatian Employment Service (CES) 
is being adjusted and administrative capacity  strengthened. Various  training activities – 
including on language skills – for EURES advise rs have been organised. The CES is also 
intensifying the activities of its Migrant Information Centre. In this area, Croatia is well on track.  
Good progress has continued in the area of coordination of social security systems . Further 
efforts have been made to strengthen th e administrative capacity to apply the acquis  in this 
field. An interinstitutional work ing group has been established Cr oatia is participating as an 
observer in the preparations for the EESSI proj ect (on electronic exchanges of data under the 
new EU regulations) and has nominated a coordina tor. Training is systematically provided to 
staff from the State admini stration. Preparations in this area are well on track. 
Preparations are being made for introduction of the European health insurance card  upon 
accession. 
Conclusion 
Good progress has been made on this chapter. Additional efforts are needed to strengthen 
administrative capacity, in particul ar with regard to coordination of social security systems. 
4.3. Chapter 3: Right of establishment and freedom to provide services 
Limited progress can be reported on the right of establishment,  as Croatia’s legislation is 
largely already aligned with the acquis . However, several restri ctions to the right of 
establishment, such as authorisation system s and the one-office-rule are still in place.  
There has been little progress on freedom to provide cross-border services . Progress has 
been made on implementation of the Services Directive. In October,  an action plan for 
implementation of the directive was adopted. Further work is needed to complete the 
exhaustive screening of national legislation in time. Sectoral le gislation to complete alignment 
with the Services Directive remains to be adopt ed. More administrative resources need to be 
allocated to this task.
 Two additional staff were employed in the Chamber of Commerce to 
work on establishing the Point of Single Contact foreseen in the Services Directive. Work on 
administrative cooperation has been initiated and needs to continue. Progress on 
implementation of the Services Directive needs to be intensified. Croatian legislation still 
contains rules contrary to  Article 56 of the TFEU. 
Further progress has been made in the field of postal services , where alignment of the 
legislation with the acquis is well advanced. Implementing le gislation regulating provision of 
universal postal services was adopted. In January 2010, Croatia fu rther reduced its price limits 
and narrowed down the scope of the reserved area to items of correspondence (not more than 
 
EN 29   EN 50 g), in line with the requirements of the Seco nd Postal Directive. However, full alignment 
with the acquis (the Third Postal Directive) has not yet been achieved. 
To develop Croatia’s post al policy further and provi de legal certainty, it is important to ensure 
coherence in the regulatory practice of the co mpetent authorities. The Croatian Post, the 
designated universal service- provider, adopted a business plan, based on its strategic 
framework, aimed at preparing for full liberalisation of the market. The number of staff in the 
Postal Services Department of the independe ntly financed Croatian Post and Electronic 
Communications Agency (HAKOM) and their pr ofessional qualificatio ns are appropriate. 
Thanks to the interconnection between the Postal  Services Department, the Legal Department 
and the Department for User Protection in  HAKOM, the administrative capacity is 
satisfactory. However, additional training is nece ssary, in particular on separation of accounts.  
Good progress has been made on mutual recognition of professional qualifications . The 
Act on regulated professions and recognition of foreign pr ofessional qualifications was 
adopted in October 2009. Amendments to the Legal Profession Act and the Ordinance on 
conditions to engage in activitie s not relating to direct exposur e to dangerous chemicals were 
adopted, removing most of the rema ining inconsistencies with the acquis in those areas. Good 
progress was made on the work on curricula for nurses. Professional and academic titles in the 
dental profession have been aligned with the acquis . However, further action is required to 
align the minimum training requirements for th e remaining medical pr ofessions with the 
acquis . Amendments to the Midwifery Act and rema ining adjustments to the Legal Profession 
Act have yet to be adopted. A national co ordinator for the approximation with the 
professional qualifications dir ective has been nominated and the Agency for Science and 
Education was appointed as the national contact point. 
Conclusion 
Progress has been made, in particular on mutual  recognition of professi onal qualifications and 
on postal services. Overall alignment with the acquis is satisfactory. Increased efforts are 
required to complete alignment, in particular in  the area of mutual r ecognition of professional 
qualifications, and to transpose the Services Dir ective. Further work is also needed to set up 
the Point of Single Contact. Work on improvi ng administrative capacity needs to be 
continued.  
4.4. Chapter 4: Free movement of capital 
Further progress has been made on free movement of capital, where Croatia’s legislation is 
largely already aligned with the acquis . Restrictions remain on acquisition of agricultural land 
and land in protected nature reserves by EU nationals, on deposit transactions by residents 
abroad and on special government rights.  
Croatia has abolished provisions of the Fore ign Exchange Transactions Act regulating 
protective measures by the Croati an National Bank with effect from Croatia’s accession to the 
EU. On 1 January 2010, Croatia li beralised transfers abroad, rangi ng from gifts and grants to 
transactions with derivatives, use of loans from abroad via accounts abroad, payments and 
collection in foreign cash, taking cash into or out of the country, tran sfers of ma terialised 
securities into or out of the country and tr ansactions on foreign exchange markets abroad.  
Granting of short-term financia l loans to residents was fully liberalised on 1 July 2010. The 
amendments to the Act on housing savings and State investment for housing savings removed the remaining discriminatory provision concerning use of assets in building societies. With 
 
EN 30   EN effect from Croatia’s accession to the EU, any physical person resident in Croatia will be 
allowed to be a buildin g society depositor (and, consequent ly, recipient of a housing loan). 
Croatia has further postponed liber alisation of deposit transactions by residents abroad until 
January 2011.  
As regards the special government rights in pr ivatised companies, Croatia has revoked the 
Law on privatisation of HEP (the State electr icity company), includi ng the provision allowing 
the State to retain 51 % ownership of the company. Howeve r, the ‘golden shares’ which the 
government still retains in some privatised companies also need to be abolished by the date of 
accession.  
Substantial progress can be  reported as regards payment systems. The new Payment Systems 
Act and implementing legislation have been adopted. This legisl ation transposes the Payment 
Services Directive into Croatia’s  national legislation. The act will  come into force in January 
2011, with the exception of the pr ovisions regulating the functioni ng of the Croatian payment 
system as an EU Member State, which will ap ply with effect from Croatia’s accession to the 
EU.  
Some progress can be reported on anti-money-laundering  (AML) measures. The new Act on 
organisation of games of chance and other AML- related implementing legislation entered into 
force. Cooperation between the Croatian Fi nancial Intelligence Un it (FIU) and reporting 
entities on supervision activities is now sup ported by detailed statistics. Joint training 
activities have been held with the reporting entities. Supervision and monitoring of anti-
money-laundering obligati ons have been tightened up, but more  needs to be done, especially 
outside the banking sector. Inte r-agency cooperation has improve d, but also still requires 
further strengthening. 
Conclusion 
Further progress has been made as regards the acquis on payment services, liberalisation of 
capital movements and anti-money-laundering . Overall, alignment is advanced. Continued 
efforts are needed to complete liberalisati on of capital movements and to consolidate the 
enforcement of the AML legislation. 
4.5. Chapter 5: Public procurement 
There has been good progress as regards general principles . Under the Public Procurement 
Act (PPA), the relevant implementing legislat ion was adopted, largely aligning the Croatian 
legal framework with the acquis . Apart from Act on Maritime Domain and Seaports, all the 
necessary sector regulating acts have been adopted.  
With regard to administrative capacity , the Department for the Public Procurement System 
(DPPS) in the Ministry of Economic Affair s, Labour and Entrepreneurship (MELE) has 
considerably improved inter-institutional coor dination. This has ensured more efficient 
implementation of public procurement policy. The Strategy for the Devel opment of the Public 
Procurement System is still being implemente d successfully, based on an updated action plan. 
Transparent and timely exchanges of informati on and data with all registered procurement 
entities are ensured. Enforcement of the PPA is monitored by the DPPS to fight irregularities 
and prevent corruption. In July MELE signe d with USKOK a co-operation agreement on 
exchange of information and training. 
 
EN 31   EN Good progress has been made on award of public contracts . Since 1 January 2010, at least 
one person who has completed a new specialis t training programme and passed an exam on 
procurement must be involved in each procur ement procedure exceeding a set value. An 
intensive training programme c overing public administration at central and local levels is 
under way. It is also open to  economic operators and NGOs. However, the capacity of the 
contracting entities to apply the public procur ement legislation correctly, efficiently and 
transparently needs to be further enhanced.  
The capacity of the Ministry of Finance ha s been improved by deve loping and applying the 
relevant methods and regulating the definitions of concessions, calculations of contract value, 
fiscal impact and risk assessment. The Ministry of Finance continued to provide support to all 
concession donors. The concession registry is functioning well. The process of improving the 
overall performance of the Agency on Pub lic-Private Partnershi p (APPP) continued. 
Implementing legislation and guidelines have been drafted for supe rvising, monitoring and 
facilitating evaluation, contracting a nd implementation of PPP projects.  
The Central Public Procurement Office (CPPO ) was established as a government office 
carrying out procurement tasks for central State bodies. The head of the office was appointed 
and recruitment of staff started. The CPPO publis hed the notice launching the first centralised 
public procurement procedure. However, further e fforts need to be made to achieve efficient 
operation of the CPPO.  
Progress can be reported in the remedies system. The new Act on the State Commission for 
the Supervision of Public Procurement Pro cedures came into force in February 2010. The 
State Commission (SC) considerably improve d its capacity to manage remedies on 
concessions and PPPs. However, the effectiveness of the remedies system is still hampered by 
the long delays in judicial review, by the Admini strative Court, of decisions taken by the SC.  
Conclusion 
Good progress can be reported, in particul ar on improving the cap acity of the main 
stakeholders to coordinate and implement  public procurement po licy. The political 
commitment to the reforms needs to be main tained. The capacity to apply the implementing 
legislation and the methods and tool s efficiently still needs to be further enhanced at all levels 
of the procurement system, including amongst economic operators. 
4.6. Chapter 6: Company law 
There has been some progress in company law . Croatia’s legislation is largely in line with the 
acquis . The Companies Act was amended to align the Croatian legislation with the Directives 
on mergers and divisions and on shareholders’ ri ghts. However, some inconsistencies remain 
in alignment with the Directive on shareholders ’ rights. The Amendments to the instruction 
on electronic communication betwee n the Court Register and comp anies with limited liability 
(Ltd) allow on-line appli cations (‘e-register’).  Relevant departments within the Ministry of 
Justice remain understaffed.  
There has been some progress in the field of corporate accounting . The legislation is largely 
in line with the acquis .  
The Croatian Financial Reporting Standards Boar d updated the rules, in line with the latest 
International Financial Reporting Standards (IFRS ). It continued to publish the translated 
 
EN 32   EN versions of the International Accounting St andards, IFSR and interpretations of the 
International Financial Reporting In terpretations Committee (IFRIC). 
There has been some pr ogress in the field of auditing . The rules of procedure for 
implementing the Audit Act were adopted. Further steps have been taken to ensure the full functionality of the Audit P ublic Oversight Committee (APOC), as work on implementation 
of the Accounting Action Plan continued. Th e APOC signed a cooperation agreement with 
the Croatian Chamber of Auditors to exchange  data on the audit prof ession and on quality 
assurance. The Public Oversight Implem entation Plan and th e Quality Assurance 
Implementation Plan were adopted. The Departme nt for Financial Repor ting in the Ministry 
of Finance, which is providing technical suppor t to APOC, hired a third employee. Its overall 
resources have yet to be allocated. 
The Quality Assurance Team (QAT) is unders taffed due to budgetary constraints on the 
Chamber of Auditors, undermining the audit oversight system as a whole. The QAT has initiated on-the-spot visits to audit entities. Ta rgeted full inspections are expected to start in 
2011.  
Conclusion 
Overall, some progress can be reported in this chap ter. Alignment with the acquis is on track. 
Further efforts are needed in the area of auditi ng to ensure that the new legal provisions are 
implemented and strengthen the administrative capacity.  
4.7. Chapter 7: Intellectual property law 
Croatia already largely fulfils the acquis  requirements in the field of copyright and 
neighbouring rights and industrial property rights. However, public and government 
awareness of intellectual property ri ght (IPR) protection remains low.  
Good progress can be repor ted in the field of enforcement . The revised National Strategy for 
the Development of the Intellectual Prope rty System for the period 2010-2012 and the 
relevant action plan were adopted in April. Im portant work has been done to formalise inter-
agency cooperation on both strategic activitie s and operational enforcement. Croatia is 
continuing its work to develop enforcement statis tics and the risk-analysis approach further. 
The Ministry of the Interior, the Ministry of Science, Education and Sports and the Croatian 
Academic and Research Network conclude d a cooperation agreem ent on prevention and 
settlement of computer incidents an d other forms of computer crime. 
However, violations of intellect ual property are a growing concern for the health and safety of 
consumers. Public awareness of those topics remains low. Involvement of organised crime 
groups in IPR violations is in creasing. Measures are therefore required to st rengthen the 
capacity of the police and prosecutors. The St ate Intellectual Property Office (SIPO) has good 
administrative capacity. However, the resources of  the Board of Appeal, providing the right to 
appeal against first-instance decisions by the SI PO, need to be improved to prevent delays.  
Conclusion 
Alignment with the acquis  has reached a very high level and progress can be reported with 
enforcement. Overall awareness of intellectual property rights remains to be strengthened, in 
particular with regard to the health and safety of consumers and the involvement of organised 
crime groups. 
 
EN 33   EN 4.8. Chapter 8: Competition Policy 
Significant progress can be reported in the field of antitrust, including mergers . The new 
Competition Act adopted in June 2009 entered into force on 1 October 2010, empowering the 
Croatian Competition Agency (CCA) to impose fines and to conduct a leniency programme, 
thereby strengthening the agency’s deterrent e ffect and enforcement policy, in particular 
against cartels. To protect the rights of defence, the Act introduces the obligation for the agency to submit statements of objection to th e parties. It also make s decisions by the CCA 
subject to review by the High Administrative Court. The CCA needs further strengthening 
due to its additional tasks arising from the new Competition Act. 
The CCA took 18 decisions in antitrust and me rger cases, including six on agreements, two on 
a dominant position, eleven on conc entrations and four opinions.  The CCA has continued to 
provide the government with assessments of  draft laws and othe r expert opinions. 
Preparations in the field of antitrust,  including mergers, are well on track. 
There has been some progress in the field of State aid . The CCA resolved 23 cases, of which 
20 involved aid schemes and thre e concerned individual aid meas ures. More remains to be 
done on competition advocacy, particularly at regi onal and local levels. Legislative alignment 
is almost completed and the main procedural prin ciples of State aid cont rol are in place and in 
line with the acquis . As regards state aid in the transport sector, Croatia has published a 
decision establishing the main rules on State aid, in line with the acquis .  
In October 2009, the Croatian au thorities initiate d the process of amending the Radio-
Television Act. A draft was submitted for public consultation. Substantial comments were made by the CCA regarding the public financing to be received.  
Croatia’s steel industry faced difficulties due to the global economic and financial crisis. 
Production at the Željezara Split steel mill is still suspended. The Croatian authorities are 
currently seeking a new buyer for this mill. At the CMC Sisak steel mill, deviations from the 
original plan were observed, while at the same time new i nvestments were launched. The 
national restructuring plan (NRP) and th e individual business plans adopted by the 
government in June 2008 have therefore become  obsolete and urgently need to be revised. 
In the shipbuilding sector, Croatia has made su bstantial progress. The tendering procedure for 
the six yards was completed in May 2010 follo wing a one-month extensi on of the deadline. 
The tender documentation was in line with the SAA State aid rules and the acquis.  Bids were 
submitted for three yards. The restructuring plan s presented by the bidders are being analysed 
by the CCA.  Restructuring the steel and shipbuilding industries in Cr oatia is a key element of 
the accession negotiations in this chapter. 
Conclusion 
Significant progress has been achieved, in pa rticular towards the privatisation and 
restructuring of the shipyards. Overall, a good level of alignm ent has been achieved. 
However, further efforts are still required to  improve the CCA’s enforcement record against 
cartels, to improve administrative capacity further,  in particular in the area of antitrust, to 
complete alignment of the Croatian Broadcasting  Act, to update the NRP for the steel industry 
and to adopt restructuring plan s in line with the state aid acquis for the shipyards in difficulty. 
 
EN 34   EN 4.9. Chapter 9: Financial Services 
Substantial progress can be reported in the field of banks and financial conglomerates . 
Croatia amended the Credit Institutions Act (which has entered into force) and the 
implementing legislation transposing the revise d Capital Requirements Directive (CRD). It 
also transposed other relevant EU directives . The Deposit Insurance Act was further aligned 
with the acquis , by shortening the compensation periods w ith effect as of Croatia's accession. 
Croatia is monitoring change s to the CRD and preparing for transposition. Home-host 
supervisory coordination is con tinuously being enhanced. Howeve r, cross-sector cooperation 
and cross-border coordination for crisis preparedness and management require further 
strengthening. The Croatian Na tional Bank (CNB) signed memo randa of understanding with 
Banque de France, the German supervisory agen cy (BaFin) and the financial supervisor of 
San Marino. A new memorandum with the financ ial supervisor of Montenegro facilitates 
cooperation between home and host supervisors. In response to the global financial crisis, the 
Croatian Agency for Supervision of Financial Services (HANFA), the Ministry of Finance 
and the CNB signed a memorandum of understa nding on managing fi nancial crisis. No 
progress can be reported with winding-up procedur es, where alignment of the legislation is 
satisfactory. Overall, preparations  in this area are well on track. 
With regard to insurance and occupational pensions , further progress has been made in the 
field of insurance, reaching a high level of alignment with the acquis . Implementing 
legislation has been adopted in many areas. Howe ver, there are still minor inconsistencies in 
implementation of the EU legislation on life and non-life insurance. HANFA has put 
considerable effort into training insurance and reinsurance companies on implementation of 
the legislation, particularly on Solvency II issues. Preparations for transposition of Solvency II requirements have commenced. Some alignmen t of the implementing legislation has taken 
place in the case of pension in surance, regarding financial reports of pension funds and 
pension companies, investment criteria and li mitations for pension funds and registration of 
insured persons in mandatory pe nsion funds. However, further act ion is needed to complete 
alignment in this field, including with Di rective 2003/41/EC regarding voluntary pension 
insurance. Amendments to legislation to co mplete alignment with the Institutions for 
Occupational Retirement Provision (IORP) Dir ective are still outstanding. Action is also 
needed to guarantee proper f unctioning of the insurance and occupational pensions markets.  
No progress has been made in the area of financial market infrastructure . Croatia’s 
legislation on such infras tructure is appropriate.  
Some progress can be reported in the areas of securities markets and investment services , 
where alignment of the legislation is already ve ry advanced. Croatia has adopted a substantial 
volume of implementing legislation. An IT a pplication has been developed for transaction 
reporting for investment companies and for the regi ster of prescribed information for issuers.  
As regards administrative capacity, the CN B improved the capacity of the Prudential 
Regulation and Bank Supervision Departments by redeploying staff within the bank. It also 
introduced new IT support for monitoring and reporting on changes in EU legislation. The 
CNB organised a series of workshops with ba nks on implementation of the Credit Institutions 
Act. Measures to strengthen the administra tive capacity of HANFA and its cooperation with 
foreign supervisors have continued. HANFA continues to be active in raising public 
awareness and training all intere sted parties (investors, police, State attorneys a nd journalists). 
Measures to enhance the administrative capacity of HANFA need to continue. 
 
EN 35   EN Conclusion 
Substantial progress can be repor ted on this chapter, both on alignment of legislation and on 
strengthening administrative capacity. However,  further strengthening of the administrative 
capacity of the regulators is needed to improve  their supervisory activities and consultations 
and cooperation with service prov iders on the financial markets. 
4.10. Chapter 10: Information society and media 
Croatia has made significant progress with aligni ng its policy, legislati on and regulations with 
the acquis  on electronic communications a nd information technologies . Market analysis 
procedures and regulations are well advanced , including preparation of cost models and 
accounting separation imposed on dominant (S MP) operators. The sw itchover to digital 
television broadcasting has also been handled successfully and a full digital transition is 
planned for end 2010. However, in spite of the regulations in place, competition on the fixed 
broadband market remains limited. In June 20 10, the fixed broadband penetration rate was 
16%, with the incumbent holding 86% of the mark et. Mobile internet had grown to 6% by 
July 2010. The mobile penetration rate is steady at 136%.  
The ‘crisis tax’ introduced in 2009 on mobile opera tors’ revenue remains in  force. No analysis 
of its non-detrimental effects on market liberalisation has b een published for public review, 
since the measure mostly affects the latest en trant on the market. Further progress has been 
made on strengthening the administrative capac ity of the Croatian Post and Electronic 
Communications Agency. However, continuous tr aining and management efforts are needed 
in order to develop the agency into a strategi c player endorsing the policy goals of a level 
playing field. The agency’s role vis-à-vis operato rs needs to be reinforced. Work to increase 
the transparency of decisions is  ongoing and needs to continue. Overall preparations in this 
area are well advanced. However, major decisions to increase competition still lie ahead, in particular on the inte rnet broadband market. 
Preparations in the area of information society services are nearing completion. However, it 
is necessary to continue to follow up EU polic y developments closely, for instance regarding 
the safer internet programme. Information society policies need to be further integrated into 
all government policies. Political awareness needs to be further improved to identify the full 
societal benefits of the information society, including the need for faster competition in all segments of the market.  
Good progress can be repor ted in the field of audiovisual policy, in particular with 
transposing the Audiovisual Medi a Services Directive. The Elect ronic Media Act entered into 
force and the Council for Electronic Media adopt ed four by-laws aiming to implement the 
Law. The Electronic Media Council  has also been further strengt hened. However, interference 
in the media landscape by economic and politi cal interest groups persists. Anti-competitive 
State aid to the national broadcaster has continued. ( See Chapter 8 – Competition ) Both are 
harming liberalisation of services and development of the sector.  
Conclusion 
Croatia has made significant pr ogress and has achieved a high level of alignment with the 
acquis  in this chapter. However, continued effort s are needed to strengthen the capacity of the 
two national regulators to apply the legal fr amework correctly. Political will and technical 
efforts are needed to sustain liberalisation of all segments of el ectronic communications 
 
EN 36   EN markets, to yield tangible results in terms of development of the information society and to 
promote competition on the broadcasting market and the independence of the public service broadcaster.  
4.11. Chapter 11: Agriculture and rural development 
Progress was achieved with regard to horizontal  issues. Croatia adopted an agricultural 
policy framework for 2010-2013 on the reform of the national support system and further alignment with the common agricultural policy (CAP). Croatia’s agricultural policy is based 
on a high level of coupled paymen ts, in particular in  the dairy sector an d for cattle fattening, 
tobacco, pigmeat, sheep and goats. Croatia has adopted a Law on State support for agriculture 
to reform the current system. Cr oatia needs to step up efforts to achieve full alignment with 
the acquis. 
Good progress was made towards setting up the paying agency  and establishing an integrated 
administration and control system ( IACS ) including a land parcel identification system (LIPS) 
which are key elements for the acc ession negotiations in this chap ter. Croatia adopted the plan 
for the establishment of the IACS  (including LPIS) and the paying agency  and made good 
progress in its implementation. Croatia needs to c ontinue its efforts to have a fully operational 
IACS  system and paying agency in place with effect from accession. 
Progress was made on implementation of th e farm accountancy data network (FADN). 
Additional human and budgetary resources need to be allocated to the FADN. 
Good progress was achieved  with regard to the  common market organisation (CMO).  
Croatia adopted the Act on the organisation of the market in agricultural products and an 
action plan for harmonisation with the CMO which is a key element for the accession negotiations in this chapter. Croatia needs to co ntinue its efforts to have a fully operational 
system in place with effect from accession. Cr oatia adopted an implementation plan to 
establish a fully functional vine yard register by the end of 2010.  
In the area of  rural development , Croatia completed the SAPA RD programme leaving half 
of the funds available to the country unused. Croatia started implementing certain measures 
under the Instrument for Pre-Accession for Ru ral Development (IPARD) . Croatia needs to 
step up its efforts to improve absorpti on capacity for rural development funds.  
Croatia is  advancing on alignment with the acquis  in the areas of quality policy and organic 
farming . 
Conclusion 
Overall, good progress can be reported in this  chapter, in particular on establishment and 
implementation of the paying agency and of the integrated administration and control system 
and on the common market organisa tion. Croatia needs to undertake considerable efforts in all 
these areas in order to have fully operationa l and compliant systems in place upon accession. 
Efforts are also needed to align the ag ricultural support syst em fully with the acquis . Croatia 
needs to increase the absorption cap acity for rural development funds. 
4.12. Chapter 12: Food safety, veterinary and phytosanitary policy 
Good progress can be reported on implementa tion of the strategy for transposition, 
implementation and enforcement of the acquis  for food safety, veterinary and phytosanitary 
 
EN 37   EN policy. As regards general food safety , Croatia has adopted implementing legislation based 
on the Food Act aligned with the acquis . Croatia needs to continue strengthening its 
administrative and control capacity. 
Good progress was made in the veterinary  sector with the adoption of several additional 
pieces of implementing legislation, based on the fully aligned Veterinary Act. Croatia has recruited additional official veterinarians. Croatia needs to continue these efforts, in particular with regard to setting up border inspection posts and official controls. 
Significant progress can be reported in the area of placing on the market food and feed . 
Croatia has adopted the national programme for upgrading establishments for food of animal 
origin and animal by-products. The number of non-compliant establishm ents continued to 
decrease. Croatia needs to continue implem enting the national programme for upgrading 
establishments. In the area of animal by-products (ABP) , deficiencies need to be addressed, 
in particular for intermediate plants  and for handling category 1 materials. 
There has been progress in the area of genetically modified organisms (GMOs)  with the 
adoption of implementing legislation relating to conditions for labo ratories involved in 
testing, control and monitoring. In addition, th e Law on GMOs and implementing legislation 
on monitoring of GMOs have been amended. Fu rther efforts will be required in order to 
achieve full alignment. Laboratories and ad ministrative capacity need to be further 
strengthened in order to impleme nt and enforce the legislation.  
Good progress continued on phytosanitary  issues, with the adoption of several additional 
pieces of implementing legislation in the fields  of plant health, plan t protection, seeds and 
planting material and regi stration of varieties of agricultural plants. Croatia needs to continue 
these efforts, in particular with regard to se tting up border inspection pos ts and training staff. 
Conclusion 
Good overall progress has been made, in partic ular with the adoption and implementation of 
secondary legislation. Transposition of the acquis  is well advanced in all sectors. Significant 
progress has been made through the adoption of  the national programme for establishments 
upgrading food of animal origin and animal  by-products. Continued efforts are required 
regarding the programme's implementation, as well as on strengthening administrative and 
control capacity, and setting up border inspection posts.  
4.13. Chapter 13: Fisheries 
Croatia has made good pr ogress in the areas of resource and fleet management  and 
inspection and control which are key elements for the acces sion negotiations in this chapter. 
It has continued to implement legislation on landing declarations and sales notes. The 
fisheries monitoring centre (FMC) is operating and additional staff have been recruited. As for statistics, Croatia is nearing co mpletion of its alignment with the acquis on collection and 
processing of fisheries data a nd statistics on fishing vessel s. Registration of commercial 
fishing vessels is well advanced, but n eeds to be fully harmonised with the acquis.  The 
installation of the satellite based vessel monito ring system (VMS) has no t been completed yet. 
An entry-exit scheme is lacking. The administ rative and technical capac ity of the fisheries 
inspectorates is improving, but still needs furt her strengthening. This implies, in particular, 
recruitment and training of additional fisheries inspectors to carry out checks at the coast. 
 
EN 38   EN There has been good progress on structural action . Croatia designated the administrative 
bodies to implement the European Fisheries Fund which is a key element of the accession 
negotiation in this chapter. E fforts are needed to finalise th e national fisheries strategy. 
Croatia needs further to align state aid  with the acquis.  
Good progress can be reported on market policy . Collection of information on species, 
quantities and prices is cont inuing. Croatia made further progress on alignment with the 
acquis  by adopting the Act on structur al support and market organisation for fisheries which 
is a key element for the accession negotiations in this chapter. Greater effort is needed on 
establishing producers’ organisations and aligning marketing standards. 
In the area of international agreements , Croatia transposed and implemented all the 
recommendations of the International Commissi on for the Conservation of Atlantic Tunas 
(ICCAT) regulating catches, farming and trading. However, more effort needs to be made on 
adjustment of fleet and farming capacity. 
Conclusion 
Croatia has made good progress in aligni ng with the acquis in the field of fisheries . 
Preparations are well advanced. Croatia needs to increase the efforts on implementation of the legislation, in particular with regard to fleet management, inspection and control and 
structural policy. Croatia also needs to fo llow up implementation of its international 
agreements.  
4.14. Chapter 14: Transport policy 
Progress can be reported on road transport . Improvements have been made as regards 
implementation of the digital tachograph, which is now fully operational. In addition, inspection capacity has been enhanced, by providing specialised equipment and further 
training, and the number of inspections has in creased. Croatia needs further to improve its 
administrative capacity for implementing the ro ad safety policy, incl uding social acquis. 
Good progress has been ach ieved in the case of rail transport . The administrative capacity of 
the railway regulatory body has b een increased. The Market Regulatory Agency is fully 
operational. Progress has been made  with railway safety legislat ion. Safety training has been 
provided to employees of HZ Infrastruktura and the HZ railway undertakings. The safety 
authority and the accident i nvestigation body have been established, but respective 
management bodies are not yet appointed and agencies are not yet functioning. Progress has 
been made with transposition and implementati on of EU railway legislation. The functional 
separation between HZ Infrastruktura and HZ Holding is under implementation, based on the 
amended Railway Act. The rail market is fu lly open for Croatian undert akings only and rail 
access to the maritime and inland waterways ports  is still only for the existing state-run 
railway. Since 2009, HZ Infrastruktura publishes the Network Statement and path application 
forms in Croatian and English. 
There has been progress in the legislation on inland waterways transport,  following 
Croatia’s development plan for inland waterw ays (2007-2012). Croatia is participating in 
preparing the Danube Strategy and actively particip ates in the improvement of the Sava River 
development, in particular concerning alignmen t of river banks and othe r technical matters in 
close cooperation with the SAVA Commission. 
 
EN 39   EN In November 2009, Croatia adopted a new Law on combined transport , which needs to be 
revised slightly in order to comply with the acquis . 
There has been good progr ess in the area of air transport . The Civil Aviation Agency is 
functioning well. Implementation of the firs t phase of the ECAA Agreement has been 
completed. In the air traffic management fiel d Croatia has made good  progress transposing 
most of the single European sky legislative framework and is participating in integration of 
the region’s airspace into a functional airspace bl ock and is participating in integration of the 
region’s airspace into a functi onal airspace block. However, the Aviation Act needs to be 
amended and further action is necessary to en sure full alignment with  the aviation acquis. 
Good progress can be reported in the area of maritime transport.  Implementation of the 
vessel traffic monitoring information system (V TMIS) is still in progress. Croatia is on the 
‘white list’ of the Paris memorandum of unders tanding. Croatia made good progress regarding 
administrative capacity for maritime safety.  
Croatia intends to take part in the Galileo satellite navigation programme made of European 
Navigation Overlay System (EGNOS) and Galileo. 
Conclusion 
Further progress has been achieve d and, overall, the level of ali gnment in this chapter is good. 
Additional efforts are still needed  to implement and enforce the acquis . This applies, in 
particular, to continued implementation of the first phase and work on the second phase of the 
ECAA Agreement, completion of alignment of th e aviation legislation and full functioning of 
the railway safety authority and accident i nvestigation body.  
4.15. Chapter 15: Energy 
Croatia adopted a new Energy Development St rategy for the period up to 2020 in October 
2009.  
There has been some progress in the area of security of supply . As regards the establishment 
of the mandatory 90 days of emergency oil stoc ks, Croatia has adapted its plan for security, 
formation and replenishment of mandatory stocks  of oil and oil products and for storage and 
regional distribution thereof to bring it into lin e with the new Oil Stoc ks Directive. In May 
2010, the oil stocks management agency signe d long-term storage contracts for 480,000 m3 of 
crude oil and 120,000 m3 of petroleum products. These contracts will allow for the 
construction of new storage capacities in Croati a. The Croatian Regulation on the security of 
gas supplies was amended in December 2009 in order to define in more detail the measures for reducing or cutting natural gas supplies to individual custom ers in the event of a crisis. 
Implementing legislation on concession fees for gas distribution and for construction of the 
gas system has been enacted. In the area of se curity of supply, Croati a continues to partly 
meet its targets. 
There has been some progress in connection with the internal energy market . Croatia has 
adopted joint auctioning rules with Hungar y. The electricity and gas markets are still 
dominated by single suppliers. In July 2010, upon a governmental proposal, the Parliament 
dismissed the members of the board of the regulat or (HERA), on the ground that HERA had 
undermined market stability by viol ating the principle of efficiency and economy that is to be 
applied in administrative matters. Croatia need s to strengthen the inde pendence and powers of 
 
EN 40   EN the regulator. The Croatian TSO delays the proc ess establishing a regional coordination for 
capacity allocation and congestion management in electricity. 
Some progress can be re ported in the area of renewable energy sources .  
The government adopted the National Renewa ble Energy Action Plan in June 2010, as 
foreseen under the new Renewable Energy Direc tive. Feed-in tariffs for electricity produced 
from RES and cogeneration have been amende d. Implementing legislation on incentives for 
use of biofuels in transport has been enacted. Croatia will not meet its 2010 target for electricity production from rene wable energy sources covered by incentives. The complex, 
lengthy administrative procedure is a disincen tive to increasing investment in RES. 
Alignment of the legislation is advanced, but su bstantial efforts will be required if Croatia is 
to achieve its target of meeting 20% of final energy demand from renewable sources by 2020. 
Progress can be reported in the  energy efficiency. Implementing legislation on energy 
efficiency in buildings and the method for ca lculating energy savings in final consumption 
have been enacted. The government adopted th e document on national cogeneration potential 
in January 2010. The first National Energy Effici ency Action Plan was adopted in April 2010. 
Alignment with the acquis  is advanced.  
Good progress has been made on nuclear safety and radiation protection . The Law on 
radiological and nuclear safety entered into force. The functions of the two regulatory 
authorities have been formally united under the State Office for Radiological and Nuclear 
Safety, yet the merger is not yet fully operational. In addition, the inspection functions are still assigned to the Ministry of H ealth and Social Welfare, whic h could call into question the 
independence of the regulatory body for radia tion protection. The Euratom directives on 
public information and on shipment of radioact ive waste and substances have not yet been 
transposed. No national emergenc y plan for nuclear accidents ha s been developed yet. Several 
regulations, in particular on medical exposure and occupational exposure, have not yet been 
implemented. Administrative capacity in  this area needs strengthening.  
Conclusion 
Further progress has been achieve d and, overall, the level of ali gnment in this chapter is high. 
Additional efforts are still needed  to implement and enforce the acquis,  in particular to open 
the gas and electricity markets, on capacity allo cation for electricity, and to meet the EU’s 
targets for RES and energy efficiency. Furthermor e, the administrative procedures related to 
RES need to be simplified. Significant efforts ar e needed to secure the administrative capacity 
and independence of the energy sector regulator y authorities. 
4.16. Chapter 16: Taxation 
Limited progress can be reported in the area of indirect taxation, as Croatia’s legislation is 
largely in line with the acquis . However, further alignment is required in the field of VAT, 
notably on the scope of the reduced rates and of exemptions, free zones and special schemes, and in the field of excise  duties with regard to duties on coffee and coffee products, and to 
chargeability of duty on coal , gas and electricity, minimum rates and small producers. The 
provisions applicable to car taxation have yet to be aligned with the acquis . 
In the area of direct taxation, Croatia started preparations  for the bilateral Savings 
agreements providing for the same measures as those in the Directive 2003/48/EC, to be 
 
EN 41   EN concluded with the relevant Member States' depe ndent or associated territories. In this area, 
Croatia’s legislation is la rgely in line with the acquis .  
Some progress can be reported on administrative cooperation and mutual assistance . The 
personal identification is now mandatory for tax returns and for tax collection and refunds. 
The preparations for administrative cooperation and mutual assistance with Member States 
are largely complete, including setting up the Central Liaison Office and the Excise Liaison 
Office.  
Croatia has made good progress on operational capacity and computerisation . The 
preparations for developing the national appl ication of the VAT Information Electronic 
System (VIES) and the Excise Movements Control System (EMCS v3) were completed. Full testing could take place once the network connec tion is activated. Further efforts are required 
to reinforce the IT capacity of the tax and customs administrations and complete the IT applications required upon accession.  
Conclusion 
Progress was made in this chapter, in particul ar on operational capacity  and computerisation. 
Croatia’s legislation in the fiel d of direct and indirect taxati on is largely in line with the 
acquis . Nevertheless, some further alignment is required, most not ably in the fields of VAT 
and excise duties. Efforts to strengthen  administrative capacity, including on IT 
interconnectivity, need to continue. 
4.17. Chapter 17: Economic and Monetary Policy 
Substantial progress can be reporte d on alignment in the field of monetary policy , which was 
completed by the amendment to the  Constitution ensuring the full independence of the Central 
Bank. 
Some progress has been made in the area of economic policy . The institutional and technical 
capacity for developing medium-term macroeconomi c and fiscal frameworks is continuing to 
improve. The Pre-accession Economic Programme (PEP) for 2010-2012 presented a comprehensive and consistent macroeconomic and fiscal framework for economic policies. 
Due to the unexpected persistence of the economic  crisis in the country, the relevance of the 
PEP as a core document for economic polic y-making has significantly diminished. The 
government has developed a comprehensive Economic Recovery Programme setting out a medium- and long-term structural reform st rategy. Implementation started in 2010 and is 
foreseen to be completed by 2020. A broad political consensus on the essentials of a market 
economy has been maintained. Fiscal reporting s till needs to be brought in line with ESA95 
standards.  
Conclusion 
There has been further progre ss in the area of economic and monetary policy and, overall, 
alignment with the acquis in this area is completed. Howe ver, policy coordination requires 
further improvement. 
4.18. Chapter 18: Statistics 
Good progress can be reported concerning statistical infrastructure . The number of 
employees at the Central Bureau of Statistics  (CBS) increased slight ly. Integration of the 
 
EN 42   EN regional offices into the CBS took effect on 1 January 2010. The work of the regional offices 
is being reorganised. This Accession Partnership priority has been met. The objectives of the 
statistical master plan have, so far, been ach ieved. Cooperation with othe r official statistics 
providers has further improved and the excha nge of administrative data has increased. A 
dissemination strategy has been adopted and is being implemented. The responsibilities of the 
CBS in the compilation of the Excessive Deficit Notification should be si gnificantly increased 
and CBS should have the leading methodological role in this exer cise. Preparations in this 
area are well on track. 
Good progress can be repor ted in the field of classifications  and registers . The CBS has 
established a classification data base. The NACE Rev. 2 classification of economic activities is 
in use. The coverage and quality  of the business register has fu rther improved. Preparations in 
this field are on track. 
Good progress has been made in the sector statistics . The preparations for the next 
population and housing census are advancing well. As  for social statistics, the first regular 
survey of income and living conditions was conducted. In the case of the national accounts, 
significant progress has been made . The organisation of tasks has been clarified and a detailed 
work plan exists. Work on establishing extern al trade statistics in accordance with the 
Intrastat system is well under way. In the area of short-term business statistics, new indicators 
have been produced. Statistics on industrial pr oduction (Prodcom), energy and transport now 
fully comply with the acquis . Substantial progress has been ma de in the area of agricultural 
statistics, in particular in the form of increase d use of administrative da ta sources, statistics on 
orchards and vineyards and economic accounts for agriculture. In the field of science and technology statistics, further alignment with EU regulations has been ac hieved. Preparations 
in this area are well advanced.  
Conclusion 
Substantial progress has been made on modernisi ng the statistical infrastructure. Overall, a 
good level of alignment has been achieved. Efforts need to continue in order to align Croatian statistics fully with EU requirements.  
4.19. Chapter 19: Social Policy and employment 
There has been good progr ess in the area of  labour law . The new Labour Act entered into 
force. Alignment of the legislation is advanced, but needs to be completed. The Wage Guarantee Agency has become operational, but is  not yet fully staffed. The liaison office for 
posting of workers within the Ministry of  the Economy, Labour and Entrepreneurship 
(MoELE) has been established. 
Progress has continued in the field of health and safety at work  through consolidation of the 
capacities of the Occupational Health and Safety department of the MoELE, the State 
Inspectorate, the Institute for Health Protectio n and Safety at Work and the Institute for 
Occupational Health and Safety Insurance. Th e current number of labour  inspectors dealing 
with health and safety still falls short of th e requirements of the State Inspectorate Act.  
With regard to social dialogue , there has been little progress. Some improvements can be 
reported in the voting system of the Economic a nd Social Council (ESC) and in the setting up 
of three sectoral councils. However, strengthen ing social dialogue with in the decision-making 
process and in policy design remains a key questi on to be addressed. The climate of tripartite 
 
EN 43   EN social dialogue has deteriorated during the reporting period, as tr ade union organisations 
considered that new legislati on was not properly processed thr ough this body. This resulted in 
a temporary suspension of their participati on: the ESC has not yet resumed its work. The 
capacity of social partners remains weak. The re presentativeness criteria for participation of 
trade unions in collective bargaini ng have not yet been adopted. Preparations in this area need 
to continue.  
Some progress has been made in the area of  employment policy . The follow-up to the Joint 
Assessment of Employment Policy Priorities (JAP) is largely satisfactory. An ambitious Economic Recovery Programme has been adopte d, which includes measures aimed at making 
the labour market more dynamic ( see Economic criteria ). The introduction of the flexicurity 
principle needs to be underpinned by mapping out a specific pathway. Structural weaknesses 
on the labour market such as the low employ ment rate persist. Improving the education 
system has received some attention, but initiativ es on lifelong learning have not yet resulted in 
a strategic approach.  
Good progress has been made in the preparations for the European Social Fund . The 
operating structure responsible for the Operatio nal Programme for IPA component IV (human 
resources development) has been working well.  Adequate training has continued. However, 
delays have been noted in  recruitment of staff.  
Some progress can be reported on social inclusion . The follow-up to the Joint Inclusion 
Memorandum (JIM) is largely satisfactory. Cohe rent monitoring and evaluation systems to 
assess policy reforms in this field need to be  further developed. Progress in the field of 
administrative and fiscal decent ralisation of social services remains limited. The transition 
from institutional to community-based care has continued at a slow pace, particularly for 
people with mental disabilities.  The full impact of the economic crisis on poverty remains to 
be assessed, with children being the most vul nerable group. Adoption of  the Social Welfare 
Act has been delayed further, wi thout any clear justification.  
The highest number of complain ts received by the Ombudsman for Persons with Disabilities  
relate to entitlement to social  rights. In the public sector, employment quotas are not met. 
Budgetary constraints are still preventing the Ombudsperson Office from strengthening its 
representation at region al and local levels.  
Croatia made some progress in the area of  social protection . Steps have been taken to 
equalise the pension ag e between men and women.  More efforts to improve employment of 
older workers and to protect elderly without income are needed. The support ratio and the 
deficit of the public PAYG sche me worsened in the wake of the economic crisis. Croatia 
needs to continue a comprehensive health care reform. The social benefits reform to improve 
targeting of social spending is still pending. 
There has been good progress in the field of anti-discrimination . The relevant directives 
have been transposed. However, some provi sions require further alignment with the acquis, 
with regard to  the exceptions to the principle of non-di scrimination. Budgetary constraints and 
insufficient staff resources continue to limit the capacity of the Ombudsman to carry out the 
full range of tasks assigned by the Anti-discrimination Act. Monitoring of cases of 
discrimination has been established but need s fine-tuning. National mi norities are still not 
proportionally represented in public  bodies or services, including at local and regional levels. 
(See Political criteria – Economic and social rights)   
 
EN 44   EN Overall, there has been g ood progress in the field of equal opportunities . Alignment is well 
advanced, but needs to be completed in the case of the Act on maternity and parental benefits and the Act on occupational safety and healt h. Good progress was achieved on establishing 
the gender dimension in public policy and in an ti-discrimination legisl ation. The capacity of 
the office of the Ombudsperson for Gender E quality is being strengthened. Progress was 
made on implementation of the national polic y to promote gender equality for 2006-2010. As 
regards the labour market, considerable improvements have been made in compliance of job vacancies with the Gender Equality Act. Aware ness-raising activities on gender equality have 
continued. However, the conditions for em ployment of women are still unfavourable 
Conclusion 
Overall, good progress has been made on this chapter and prepar ations are generally on track. 
There is a good level of alignment with the acquis  and preparations are on course. However, 
some gaps remain in alignment of the legislat ion, notably on transposin g labour law directives 
outside the scope of the Labour Act, and in the fields of anti-discrimination and gender 
equality. The Social Welfare Act remains to be  adopted. Due attention should be paid to the 
functioning of social dialogue . Administrative capacity requires further strengthening.   
4.20. Chapter 20: Enterprise and industrial policy 
Some progress was made with regard to enterprise and industrial policy principles . Further 
efforts were made on implementatio n of enterprise policy principl es, particularly of the Small 
Business Act for Europe. The government adopted a development strategy to promote entrepreneurship among women. Alignment of Croatia’s definition of ‘SME’ with the acquis 
recommended definition  is not yet completed. Further progre ss has been made in the area of 
business registration, especially in  the form of introduction of th e e-register online application 
but is not yet fully functioning. 
Further to the decision on abolition of th e Regulatory Impact Assessment Office, the 
government adopted a decree amending the st ructure and functions of the Government 
Legislation Office (GLO) which was appointed as the body res ponsible for regulatory impact 
assessment  (RIA) in Croatia. The GLO has taken st eps in order to be able to conduct 
professionally regulatory impact assessments.  
Industrial policy measures were taken to allevi ate the effects of the crisis. In April 2010, the 
government adopted the Economic Recovery Programme, which includes measures to 
improve the business environment and create a competitive economy ( see Economic criteria ). 
However, an assessment of the efficiency of measures in the existing industrial strategy was 
not done 
In the area of enterprise and industrial policy instruments , Croatia has made some 
progress, mainly thanks to active participa tion in the EU’s Competitiveness and Innovation 
Programme (CIP). Croatia participates in the Eur ope Enterprise Network. 
There has been some pr ogress in the field of sector policies,  like in the shipbuilding industry, 
where the tendering procedur e was finalised in May ( see Chapter 8 on both steel and 
shipbuilding ). Further work was carried out in the area of tourism, w ith the adoption of 
legislation implementing the Law on tourist boa rds and on promotion of Croatian tourism. 
Conclusion 
 
EN 45   EN Croatia made progress in this chapter, particularly with regard to policy principles and 
instruments. Overall, alignment with the acquis in this chapter is very advanced. Further 
sustained efforts need to focus on improvi ng the business environment, by reducing the 
administrative burden, and on innovation and skills. Alignment of the definition of SME with 
the acquis needs to be completed. Efforts to restructure the steel and, particularly, 
shipbuilding industries need to be pursued.  
4.21. Chapter 21: Trans European Networks 
There has been good progress with development of transport networks . Croatia has 
maintained active cooperati on under the memorandum of unders tanding on development of 
the South-East Europe Core Regional Transpor t Network and has continued implementing the 
multi-annual development plan for 2010-2014 for the South-East Europe Transport 
Observatory (SEETO). Croatia made good progr ess on implementation of ISPA and IPA 
railway and inland waterway projects and has started to prepare the Transport Operational 
Programme for the Cohesion and Structural Funds.  
In the case of energy networks , the new double 400 kV Ernestinovo-Pecs (HU) electricity 
line is currently operating on a trial basis.  Construction of the Croatia-Hungary gas 
interconnector is in progress. Preparations fo r the Adria LNG terminal on the KRK island are 
continuing, however, the project  sponsors decided before the summer to postpone the 
investment decision. Progress is being made on the construction of the gas transmission 
pipeline on the coast, towards the south (to Pl oce), which is part of the Energy Community 
Gas Ring concept.  
As regards the telecommunications networks Croatia is actively participating in the 
Information and Communication Technologies p illar of the Competitiveness and Innovation 
Framework Programme (CIP). 
Conclusion 
Croatia made further progress with deve lopment of its transport, energy and 
telecommunications networks in 2010. Alignment with the acquis  has been completed. 
4.22. Chapter 22: Regional policy and coordi nation of structural instruments 
Further progress has been achieved and the legislative framework necessary to ensure full 
compatibility of operations financed by the Stru ctural Funds with EU policies and legislation 
is now largely in place. However, full implem entation of the legislative framework at all 
levels needs to be ensured by further build ing up administrative capacity and by providing 
guidance documentation for those who ne ed to implement the legislation. 
Preparations in this area are advanced. There has been progress with the institutional framework . Croatia has adopted advanced 
individual organisational development strate gies for key organisations involved in 
management and implementation of cohesion polic y. On the basis of these strategies, Croatia 
adopted the designation of the institutional se t-up for managing structural instruments. 
Preparations in this area are advanced. 
There has been some progress in the area of administrative capacity . An Institutional 
Development and Capacity-Building Strategy,  including a career pl anning and salaries 
 
EN 46   EN strategy for civil servants involved in manageme nt of EU funds, has been submitted to the 
Commission. In February, a decision was adopted to increase staffing by nearly 300 and step 
up training activities for IPA structures by the end of 2010. However, preparations for 
implementing the cohesion policy need to be  significantly strengthened by enhancing 
administrative capacity and project  preparation (especially on tr ansport and the environment). 
Both the programming stage and setting-up of th e institutional system under the IPA were 
accomplished well, but the track record of implementation under IPA so far is mixed, notably due to limited administrative cap acity in certain IPA bodies. Implementation of major projects 
is lagging behind, due to low quality of projects  applications and tend er documentation. To 
achieve a smooth transition from the IPA to the more comprehensive funding under the Structural and Cohesion Funds, further efforts are required to build up necessary expertise and 
ensure transfer of know-how be tween the relevant authoritie s. Commitment and ownership on 
the part of the line ministries, staffing and staff retention policy ne ed to be enhanced. 
Preparations in this area are advancing. 
Good progress has been made with programming . A Ministerial Commission on use of EU 
funds was established with t op-level political part icipation. Croatia re vised its National 
Strategic Reference Framework (NSRF), whic h is now an advanced and comprehensive 
document outlining the key priorities and expected results of cohesion policy assistance. In 
June 2010, Croatia embarked on public consultations  on the NSRF. Drafts of operational 
programmes for structural funds and cohesion  funds have been developed. Progress with 
preparing an adequate, mature project pipeline n eeds to be enhanced. Preparations in this area 
are fairly advanced. 
There has been good progress in the area of monitoring and evaluation  of the IPA 
operational programmes. Further advances have been made with setting up and operating the 
monitoring and evaluation system for the Structural Funds, incl uding an electronic 
management and information system which is oper ational under IPA. Croa tia is also using an 
IT tool (LOTHAR) to monitor absorption of funds. Preparations in this area are fairly 
advanced. 
Some progress can be re ported in the area of financial management and control. (See 
Chapter 32 — Financial control ) The implementation of roadmaps to further strengthen 
financial management and control systems is continuing. Follow-up au dits on IPA conferral 
of management confirmed that internal contro l procedures are broadl y satisfactory. Croatia 
needs to build up its capacity in these fields. Preparations  in this area are advancing. 
Conclusion 
Good progress was made under this chapter, no tably on preparing strategic documents and 
designating the institutions and mechanisms to implement the EU cohesion policy. Administrative capacity was furthe r strengthened by recr uiting and training staff. Croatia is at 
an advanced stage of preparations for cohesion policy and needs to complete its preparations 
by focusing on establishment of a mature pr oject pipeline and absorption of funds. 
4.23. Chapter 23: Judiciary a nd fundamental rights 
There has been some prog ress in the area of the judiciary . 
There has been good progress as regards the in dependence of the judiciary, which has been 
strengthened through amendments to the Cons titution and the laws on the state judicial 
 
EN 47   EN council (SJC), the state attorneys offices and the courts. According to the new Constitutional 
provisions, the SJC will in future comprise eleven members, seven judges to be elected by peers, two law professors and two members of  Parliament. Similar arrangements will apply 
for the State Prosecutorial Council (SPC). Other provisions further reduce the risk of political 
interference in the judiciary: the SJC rather  than the Ministry of Justice (MoJ) will now 
appoint Presidents of courts, th e President of the Supreme Court will have greater control over 
court management and the five-year probatio n period for judges is  abolished. However, 
shortcomings remain in the functioning of both th e SJC and SPC. Overall, it is important that 
these bodies demonstrate independence and account ability, especially when performing their 
key functions in the area of appointments, disc ipline and career management, so that effective 
self regulation of the judici al profession is assured.  
Progress was also made towards the introduc tion of uniform, transparent, objective and 
nationally applicable cr iteria for the appointment of judge s and prosecutors. A completely 
new selection system is in the process of be ing established based on a school for judicial 
officials under the judicial academy (JA) . From October 2010 candidates for judge and 
prosecutor positions will need to pass a competi tive entry exam to the school for judicial 
officials, followed by 2-year initial training and a final ex am. For appointments in the 
meantime, a revised selection procedure fo r new judges was introduced. Implementing 
regulations introducing improved selection criteria were also  adopted, including written and 
oral exams to be conducted by the SJC.  
However, both selection systems remain to be tested in practice. There is no track record of 
appointments based on the revised criteria. The cr iteria for assessing the oral exam are vague 
and it is not clear how these will be applied in practice. Further implementing rules are 
required. The SJC does not have sufficient cap acity to carry out its  new tasks, although 
adopted legislation will exonera te members of 50% of their nor mal work and stronger support 
services for the SJC will be established. Carefu l management of the two selection procedures 
(under the SJC and the JA) will be required, not leas t as these are expected to run in parallel 
until January 2013.  
Some progress has been made as regards the impartiality  of the judiciary. The SJC has 
adopted a more transparent met hodology for the local judicial c ouncils to evaluate judges for 
the purposes of promotion. Th e State Judicial Council c onducted fourteen disciplinary 
proceedings in 2009. However, five of these were not admissible because they had been launched by acting rather  than permanent presidents of courts and six ar e still pending. 
Disciplinary proceedings resulted in only one fine, one acquittal and one judge resigning after 
the procedure was launched. No disciplinar y proceedings were conducted by the State 
Prosecutorial Council (SPC) in 2009. Disciplinary  proceedings against attorneys and judges 
continue to lack transparency. Further improve ments are needed to ensure the accuracy of 
declarations of assets by judges and prosecutors ar e systematically checked. 
Good progress has been made as regards prof essionalism and competence of the judiciary. 
The Judicial Academy has become an independ ent institution from the MoJ, with its own 
budget and increased staffing. Perm anent premises have now been made available to the JA 
and are in the process of renovation. In th e meantime, alternative, improved accommodation 
has been made available, also to the SJC and SPC. Professional training programmes have 
continued, including initial traini ng and covering matters of EU law. Implementing legislation 
necessary to set-up the school for judicial offici als was adopted. More generally, improved 
publication of and access to court decisions is ca lled for in view of the development of case 
law and in the interest of public dissemination. 
 
EN 48   EN Progress has been made in relation to the effici ency of the judiciary. The backlog of cases was 
further reduced by 10% (796,000 in December 2009 compared to 887,000 in 2008). Good progress was made in reducing the number of ca ses older than 3 years. Old civil cases were 
reduced by 17% to 84,251 and old criminal cases by 16% to 3,667. In general, courts have 
increased their productivity. However, the backl og of cases has been reduced unevenly among 
the various courts. Some courts  continue to suffer from disp roportionately large numbers of 
old civil cases, for example the municipal c ourts in Zagreb, Spl it and Zadar. Certain 
categories of cases also remain problematic. The number of enforcement cases has been increasing and constitute 40% of  all civil cases. Problems with the enforcement of court 
rulings continue to hamper the efficient working of the judicial system. The Law on Private Bailiffs and the amendments to the Law on Enforcement remain to be adopted. The economic crisis has triggered many ba nkruptcy proceedings (incr eased by 22%) which have 
overburdened the commercial courts. The handling of administrative cases continues to be 
slow, to lack transparency and is not in line with European standards.  The backlog of cases 
has remained constant for the last two y ears (36,460 in 2009 compared to 36,802 in 2008) and 
the average duration of cases is longer than 3 years.  
There has been some progress in the rationali sation of the court netw ork. The first physical 
mergers of municipal courts have occurred. Amendments to the Law on Misdemeanours were 
adopted, reducing the number of misdemeanour courts from 114 to 63. However, none of the 
misdemeanour courts have been physically merged yet,  with full physical mergers planned to 
be complete only by 2019. The Ministry of Just ice department supervis ing the rationalisation 
process is understaffed. There is  a lack of clarity as to th e financial impact of court 
rationalisation which puts into question its imp lementation in practice. Further steps are 
needed to extend rationalisation to the county c ourts, states attorneys' offices and commercial 
courts.  
With regard to the infrastructure and equipm ent of courts, there has been limited progress. 
The integrated case management system (ICMS) is  in the process of be ing rolled-out to all 
commercial, county and some of the municipal c ourts. ICMS is now in place in 69 out of a 
planned 103 courts. A special case  tracking system was also test ed in two prosecution offices. 
However, the budget allocated to court IT infr astructure remains insufficient to cover the 
needs and may delay further roll- out of ICMS. Misdemeanour courts  continue to suffer from a 
shortage of equipment and a very  low standard of premises. The lack of a unified statistical 
system related to case management remains an obstacle to the adoption of appropriate, tailor 
made measures for tackling the case backlog. Fu rther improvement to random case allocation 
in courts is needed.  
The system of judicial inspections has s hown good results. The inspectors have improved 
their internal organisation and developed check lists. The number of inspections planned for 
2010 was increased to 22 compared to 5 in 2009. The number of inspectors has also increased 
to four. However, judicial insp ections are still performed only in courts and not in prosecution 
offices. 
There has been good progress wi th application of the new  Criminal Procedure Code.  
Applicable  to organised crime and corruption cas es since 2009, the new procedure has 
accelerated the investigation phase, with better cooperation between the police and 
prosecution services leading to more indictme nts. However, there are now about 200 cases 
pending at the four specialised USKOK chambe rs at County Courts. The 54 judges working 
in these specialised chambers have not been re lieved of their previous duties. Preparation for 
the enforcement of the new code for all othe r criminal cases from 2011 is continuing. The 
 
EN 49   EN new procedures provide for stri cter deadlines for interviewing suspects, which will require 
additional police resources. 
As regards alternative dispute resolution (ADR), a code of ethics of mediators was adopted. A 
mediators’ register was also established. Speci fic training was provided to judges and private 
mediators. The success rate of mediation cas es has improved and is currently between 50-
60% in commercial courts and 30-40% in out of  court mediation. However the strategic study 
adopted in 2009 did not ach ieve the predicted resu lts as there has been a sharp decline in the 
number of cases referred to co urt mediation (about 40%). This reflects the lack of incentive 
given to judges to use ADR. The extent of out-of court mediation remains limited. Further 
simplification of mediation is necessary. 
Implementation of the  judicial reform strategy has contin ued. A new action plan and a large 
volume of new legislation was adopted. The Mo J underwent a major reorganisation with the 
aim of improving efficiency. The number of directorates was reduced and management 
responsibilities transferre d from state secretaries to heads of  directorates in order to improve 
efficiency. However, adequate monitoring of reform measures remains problematic due to 
limited administrative capacity. The MoJ lacks th e capacity to plan the human resource needs 
of the courts. It has failed to take into acc ount the impact of the ra tionalisation process and 
other reforms, for example the criminal pr ocedure reform abolishing the role of the 
investigative judge. There is no systematic asse ssment of the impact of new measures. Post-
legislative scrutiny remains very weak.  
Croatia continued to try war crimes with approximately two dozen trials on-going in 
2009/2010. A more balanced approach to trials has continued. More cases involving Croat 
perpetrators, including members of the Croati an armed forces, were pursued. The State 
Prosecutor continued review ing potentially questionable in absentia  verdicts from the 1990s. 
Re-trials were requested in 15 cases, of whic h 14 were granted involvi ng 90 people convicted 
in absentia . In most cases, the original verdicts were  overturned. Measures have been taken to 
protect witnesses with improved witness support services at certa in courts. There have been 
some attempts to remedy misapplication of the Amnesty Law in cases which could be 
considered war crimes.  
However, impunity for war crimes remains a problem, especially where the victims were 
ethnic Serbs or the alleged perpetrators were members of the Croatian security forces. Many 
hundreds of cases remain to be investigated  and prosecuted, despite recent action by the 
police and prosecutors. Problems pers ist in certain localities. Insufficient use is being made of 
one powerful weapon for impartial prosecution of  war crimes – the specialised war crime 
courts, although an increased wi llingness to use this possibility  is evident recently. Where 
convictions are obta ined, sentences in war crimes cases ar e, in general, c onsiderably lighter 
than those imposed for the equivalent underlying crimes not classified as war crimes. The use 
of mitigating factors in sentencing gives rise to  different treatment linked to ethnicity. Work 
on reviewing questionable in absentia  verdicts from the 1990s should continue, including by 
making use of protection of legality provisions and overcoming problems with presentation of new facts.  
The legacy of incorrect applica tion of the Amnesty Law continues to have a negative impact, 
preventing families of victims from obtaining compensation. Transparency in this area is also lacking. Initial attempts to remedy the situati on show limited results. Further efforts are 
required to ensure defendants are provided with an adequate  defence, including by making 
greater use of the list of defence attorneys, which is used in only around two thirds of 
in 
 
EN 50   EN absentia  cases. Implementation of legislation to pr otect witnesses and witness confidentiality 
needs to be improved.  
There has been good progress in the fight against corruption.  
The political will to fight corruption has been  further strengthened. Implementation of the 
anti-corruption strategy and re lated action plan has continue d. The action plan was revised 
and, following numerous scandals involving public companies, the government adopted a specific anti-corruption program me for trading companies in state ownership (2010-2012). 
Overall coordination of the implementation of anti-corruption efforts has improved. The governmental coordination committee to monito r the implementation of the anti-corruption 
action plan has been upgraded to ministerial le vel, directly chaired by the Prime Minister. 
This has increased the authority of the anti-corruption unit of the Ministry of Justice which is in charge of coordinating the implementation of the anti-corruption action plan. The national 
council for monitoring the anti-corruption strate gy continued to be proactive and regularly 
held public debates and hearings. However, coordination of anti-c orruption efforts needs to be 
further strengthened. The MoJ anti-corruption sector is understaffed and proactive follow-up 
of implementation i ssues are needed.  
The legal framework to combat corruption ha s been further improved. Amendments to the 
USKOK Act extend USKOK's remit to tax fr aud cases linked to organised crime and 
corruption. The new Labour Act lays down new pr ovisions to protect whistleblowers. These 
include no "just cause for dismissal" of the wh istleblower and the reversal of the burden of 
proof in cases of alleged discrimination fo llowing whistle blowing on corruption cases. 
Legislation for the suppression of  corruption is basically sound. However, legislation in the 
area of prevention remains unde r developed (see below).  
As regards the suppression of corruption, th e office for the fight against corruption and 
organised crime (USKOK) continue d to be active and issued indictments in some important 
cases. The overall number of cases being handled by USKOK has increased. USKOK has 
begun to investigate possible high level corruption, initiating inve stigations involving senior 
political personalities. Other medium and hi gh level cases are under investigation and 
prosecution, often involving state-owned companie s. The first high level political cases are 
before the courts. Police effectiveness a nd inter-agency cooperation has improved. The 
number of police officers available to the regi onal PNUSKOK (the nati onal police office for 
the suppression of corruption a nd organised crime) offices ha s increased from 52 to 82. 
USKOK has been reinforced with the appointme nt of three further pr osecutors. Competence 
for managing confiscated assets has been gr anted to the central state office for the 
management of state property.  
However, corruption is still prevalent in many areas. The recently upgraded legal and 
administrative structures remain to be fully tested in practice, particularly in terms of the courts’ ability to handle the increased number and complexity of cases. The number of court 
verdicts has increased but this mainly concer ns petty corruption cases . There have been no 
final court rulings in serious political corrupt ion cases. The administrative capacity of State 
bodies for fighting corruption continues to n eed improvement. USKOK has been coping well 
with the increased number of cases, but is startin g to look stretched and will need to make full 
use of its on-going reinforcement. A high number  of reported cases are dismissed after pre-
investigation, with insufficient scrutiny.  
 
EN 51   EN The increasing number of cases related to financ ial crimes has highlighted some deficiencies 
in PNUSKOK and USKOK’s capacities to d eal with sophisticated  financial crimes. 
International cooperation on the collection of  admissible evidence needs to be improved. 
Investigation and prosecution of tax fraud re lated to corruption activities needs to be 
reinforced. The prosecution of money laundering needs to be strengthened within corruption 
cases. Croatia will need to pay particular attention to implementation of new provisions for the management of confiscated assets.  
There has been limited progress in the area of prevention of corruption. The right to 
information has been introduced as a constitutional  right. The internal structure of the office 
of the commission for the prevention  of conflicts of interest has been changed in order to give 
the commission further independence from the Parliament. Provisions have been introduced 
in an amended Conflict of Intere st Act to depoliticise appointme nts to supervisory boards of 
state-owned companies. This law also provide s for strengthened verification of the assets 
declarations of public officials. However, these measures are not yet operational. Some 
awareness raising measures were taken but the c oncept of conflict of interest is still little 
understood in Croatia, especi ally at local level. There is limited monitoring of legal 
compliance and the sanctions available are ineff ective. There has been no improvement in the 
application of access to information legislation. Supervision of the law is weak, and access to 
redress for citizens is overly co mplicated. In order to prevent corruption, greater transparency 
in public administration is require d, particularly in the area of public spending. It is extremely 
difficult for citizens to obtain information on th e final execution costs of public procurement 
contracts, especially at local level. Shortcom ings remain with regard to the financing of 
political activities and election campaigns, wh ere there is no fully effective independent 
oversight.  
(See also 2.1. Democracy and Rule of law)  
As regards  fundamental rights , there has been some progress.  
There has been good progress concerni ng the protection of personal data . The Data Protection 
Agency has given its opinion on numerous laws a nd regulations, and increased its supervision 
and control activities. However, full alignmen t with the Data Protection Directive and the 
Council of Europe instruments remains to be completed.  
As regards access to justice, th ere has been some progress. In the area of administrative 
justice a new law on Administrative Court Disput es foresees the introduction from January 
2013 of four first instance courts  and of a Higher Admi nistrative Court. This reform provides 
for courts of full jurisdiction  in the meaning of Article 6 of the European Convention on 
Human Rights. In the area of legal aid, impl ementing legislation has been amended to 
simplify procedures and to increase the fees  for lawyers to take on legal aid cases.  
However, planning for implementation of the new system of administrative justice is at an 
early stage. Procedures for legal aid remain complicated and the overa ll level of aid provided 
is low. In practice, access to justice for vul nerable persons with insufficient means remains 
difficult. The provisions of th e law on legal aid are still in terpreted narrowly and are not 
enforced uniformly among the twenty county offices responsible for implementation. The 
number of applications for le gal aid has been considerably lower than expected. Between 
February 2009 and April 2010, a total of 5,152 requests were received, of which 3,536 were approved. NGOs continue to be the main provide rs of free legal advice and have ten times as 
 
EN 52   EN many cases than those covered und er the national system. However, they are experiencing a 
decline in funding.  
Some progress was made with regard to the prison system . Legislation foreseeing a new 
system of probation from 2012 was adopted a nd a probation directorate was established 
within the Ministry of Justice. Work relate d to the expansion of existing detention and 
treatment facilities has started and will be fi nalised in 2012. In the meantime, Croatian prisons 
remain overcrowded and provide inadequate h ealth protection. Prison occupancy stands at 
150-160%. The number of detainees in pr e-trial procedure is increasing.  
Freedom of expression , including freedom and pluralism of the media, is provided for in 
Croatian law and is still generally respected. Ho wever, editors and jour nalists continue to 
report undue political pressure. Prob lems with local media remain.  
There has been some progress with regard to women's rights  and gender equality, but the 
number of registered cases of  domestic violence has increase d, the position of women in the 
labour market has not significantly changed and women continue to be under-represented in 
economic and political decision-making bodies.  
Limited progress can be re ported with regard to children's rights . The Ombudsman for 
Children became more active in promoting a nd protecting children rights, but it lacks 
appropriate office space and staff res ources to carry out its mandate.  
There has been some progress in the area of socially vulnerable and/or persons with 
disabilities . The Office of the Ombudsman for Persons with Disabilities is now adequately 
staffed. There is, however, a lack of informat ion on rights and entitleme nts in the area of 
social welfare, health care and pension in surance. Criteria for the establishment of 
entitlements are not equally applied, and legisl ative provisions regula ting specific rights are 
fragmented. The transition from institutional care to community-based care services has progressed slowly.  
Some steps have been taken to  raise awareness of the new anti-discrimination  law. However, 
knowledge of its scope is limited and only a small number of discrimination complaints reach the court. There has been some progress in th e implementation of hate crime legislation. 
Awareness raising measures have been carried  out and some cases initiated. However, 
implementation is at an early stage. LGBT peopl e have faced threats an d attacks, with limited 
follow-up by the authorities. 
There has been some progress with regard to  minorities. High-level public expressions of 
commitment to the rights of minorities, rea ffirming their place in Croatian society, have 
continued. Improved relations in  the region, particularly betw een Croatia and Serbia, have 
allowed for a more positive focus on minority is sues. The revised Constitution now explicitly 
lists all 22 national minorities. Provisions of the constitutional law on the rights of national 
minorities (CLRNM) on minority representation in parliament were strengthened. Training for the media as well as the police has been provided aimed at improv ing the portrayal of 
minorities and raising awareness of relevant le gislation respectively. The Roma minority has 
continued to receive at tention, with improvements particular ly in pre-school education. The 
level of funding available for minority organi sations has been decr eased by only 1.25% to 
€5.7m in the revised budget, despite more extensive cuts elsewhere. 
 
EN 53   EN However, many problems remain for minorities. Croatia  needs to continue to foster a spirit of 
tolerance towards the Serb minority in particul ar and take appropriate  measures to protect 
those who may still be subject to threats or acts of discrimination, hostility or violence. 
Minorities continue to face particular difficulties  in the area of employment, both in terms of 
under-representation in state administration, the judiciary and the police as well as in the 
wider public sector. There has been no improveme nt in the level of em ployment of minorities 
in those bodies covered by the CLRNM Implemen tation of the law has been complicated by 
general limits on recruitment introduced as part  of the recession measures. Monitoring of the 
implementation of recruitment plans for national minorities has been weak. Legal provisions and programmes need to be implemented with more determination, and adequate monitoring 
assured, especially in the area of employment. The Roma minority faces particularly difficult 
living conditions and challenges remain in th e areas of education, social protection, health 
care, employment and access to personal documents. 
There has been some progress on refugee return  issues. Refugees continued to return to 
Croatia, with the Croatian authorities having now registered over 132, 600 returnees in total 
belonging to the Serb minority, which corresponds  to approximately half of those who fled 
the country up until 1995. Some progress was ma de with regard to housing issues. The 
government's self-imposed 2008 benchmark for the provision of 1,400 accommodation units 
to former occupancy and tenancy rights holde rs under its housing care programme has been 
met, partially by transferring cases to recons truction programmes. A revised action plan has 
been adopted for implementation of the 2009 target of providing 2,070 accommodation units, 
with the aim of full implementation in 2011. Improved administrative monitoring has been 
introduced, including the involvement of th e United National High Commissioner for 
Refugees. A purchase option under favourable conditions for housi ng care beneficiaries 
outside the areas of special state concern has been intro duced. Progress was made with 
reconstruction of damaged houses, as well as with processing the substantial backlog of 
appeals against rejected app lications for reconstruction as sistance. Some 900 houses were 
included in the 2009/2010 programme. Implementa tion of the decision on validating pension 
rights has continued and monitoring to addres s inconsistencies between different regional 
offices has improved.  
However, many problems remain for refugees and returnees. Lack of housing remains a key 
obstacle to sustainable return. Progress to wards meeting the 2009 benchmark has been 
delayed and implementation is at around 31%. Moreover, 2-3,000 applications not covered by 
the action plans still remain to be fully pr ocessed and housing units made available to 
returning refugees. Sufficient budgetary funding should be made available accordingly. Some 6,000 appeals for housing reconstruc tion still remain pending. The current rejection rate of 
convalidation applications  is still high at 44% and a more consistent approach by regional 
offices should continue to be st rived for. Efforts to create the economic and social conditions 
necessary for the sustainability of re fugee return need to be accelerated. 
As regards citizens rights , Croatia adopted legislation on the right to vote for EU citizens in 
European Parliament and local elections in Croatia. Further measures will be needed to achieve full alignment with Directive 2004/38/EC  on the right of citizens of the Union and 
their family members to move a nd reside freely within the territory of the Member States.  
Conclusion  
Croatia has made good progress on judiciary and fundamental rights . Reform of the judiciary 
has continued with the adoption of new legislation strengtheni ng judicial independence and a 
 
EN 54   EN further reduction of the case ba cklog. However, judicial reform remains a major undertaking 
and significant challenges remain, especially re lating to judicial efficiency, independence and 
accountability. Anti-corruption effo rts have been stepped up with some positive results but 
corruption remains prevalent in many areas. A track record of effective investigation, 
prosecution and court rulings remains to be esta blished, especially for high level corruption. 
Preventive measures such as improved tran sparency of public spending need to be 
strengthened. Protection of fundamental rights ha s been strengthened but need to be improved 
in practice, especially for minorities and refugees.  
4.24. Chapter 24: Justice, freedom and security 
Progress can be reported in the field of migration . In October 2009, the ministries of the 
Interior and of Health have signed a protocol  defining the standard operating procedure for 
reception and return of unaccompanied minors. However, nomination of guardians for this 
vulnerable group, in line with the internationally recognised principle of the best interest of 
the child, is uneven. The Ministry of the Inte rior (MoI) has amended the rules on travel 
documents and visas for foreigners with a view to aligning them with the Law on foreigners.  
The number of police officers dealing with irre gular migration has increased from 339 to 350. 
A total of 3,219 irregular migrants have b een apprehended in 2009 (1,546 at the border), 
which amounts to a 20% decrease over 2008. In a ll, 461 migrants have been detained in the 
Ježevo deportation centre and 1,019 have been deported. Also, 132 irregular minors have been apprehended, and 25 of them have been placed at the Ježevo centre. Eighteen of them 
have applied for asylum. Activities aimed at the construction of a special facility for minors at 
Ježevo have started. Special attention needs to  be paid to the treatment and accommodation of 
this vulnerable group. New read mission agreements with Serbia and Montenegro have entered 
into force on 1 May 2010. Readmission agreements have been signed with Slovakia and Malta. Negotiations have  started with Kosovo. 
Significant progress can be reported in the field of asylum . The Act amending the Asylum 
Act entered into force in July 2010, fully aligning Croatia’s legislation with the acquis, in 
particular with regard to interviews of asyl um-seekers in the accelerate d procedure, free legal 
aid at second instance, terminology and th e duration of subsidiary protection. The 
independence of the Asylum Commission, whic h will function as a second-instance body 
until March 2012, has been significantly improve d, including by providing for an additional 
member from the judiciary. It has conti nued to interview all asylum-seekers, although 
interviews only have become compulsory after the amendments to the Asylum Law were adopted. A fast judicial review  has been introduced for asyl um-seekers in detention. Full 
access is given to the UNHCR at border crossing points and in the transit zone. Croatia has 
also improved the conditions to ensure better inte gration of refugees into  society, including by 
providing access to Croatian lang uage courses. Continued atte ntion needs to be paid to 
practical integration of refugees in Croatia  and to coordination between the relevant 
authorities.  
In 2009 Croatia has received 120 asylum requests for 147 persons. In response, by April 2010 
it has granted 14 people refugee st atus and six subsidiary protect ion status. Between 1 January 
and 30 September 2010, 155 applications for asylum  have been submitted to Croatia. It is 
positive to note that the number of asylum-seek ers brought before the misdemeanour courts to 
be charged with irregular entry has dropped by 90%. Training of Mo I staff and of border 
police officers on asylum has continued. Croatia n eeds to continue paying attention to training 
border police officers and Asylum Commission as  well as Administrative Court staff on the 
 
EN 55   EN asylum procedure. Establishment of a second reception facility s hould be considered.  
Good progress has been made on visa policy  and the security features of Croatian travel 
documents. Biometric passports have been issued  at all police stations since January 2010 and 
at all diplomatic missions and consulates exce pt Tripoli since July 2010. Further alignment 
with the acquis on travel documents for aliens and on visa forms has been achieved. 
Legislation aligning the visa sticker to the EU  requirements on the uniform format of visas 
has entered into force on 1 September 2010 and the new sticker has been introduced at diplomatic missions and consulates ; old stickers continue to be used until depletion of existing 
stock. The Croatian visa database has been rolled  out at all diplomatic missions and consular 
posts except Tripoli and at 44 border crossing points.  The Ministry of Foreign Affairs has 
become the central State body in charge of issu ing visas. Further alignment is still required, 
notably with regard to the uniform procedure for issuing visas and th e new EU Visa Code. 
The EU ‘positive’ list of non-EU countries not re quiring a visa and the ‘negative’ list remain 
partly aligned. An Agreement on mutual travel by nationals has been signed with the Russian 
Federation. The government has adopted a decisi on on temporary liberalisation of the visa 
arrangements for citizens of the Russian Fe deration, Ukraine and Kazakhstan for transit 
through Croatia or stays of up to 90 days be tween 1 April and 31 October 2010, , which is not 
in line with the EU acquis . For the same limited period, the government has adopted another 
decision facilitating entry to Croatia for the purposes of tourism for non-EU nationals holding 
a Schengen visa or a residence permit issues by a Schengen state and based on a number of 
additional set criteria. 
There has been progress with regard to external borders and Schengen . The Integrated 
Border Management (IBM) Acti on Plan and the Schengen Action Plan have been revised in 
March 2010 and needs to be regularly updated. The roadmaps for establishing the SIRENE 
(supplementary information request at the natio nal entry) office and the national system for 
the Schengen Information System (SIS II) have been adopted. Further efforts are needed for 
the timely implementation of these roadmaps. Cr oatia has established a national focal point 
for exchanges of information with Frontex  and has adopted a Cooperation Plan for 
implementation of the working arrangement. Croa tia participates in the Frontex developed 
Western Balkans Risk Analysis Network. 
The Border Police has been substantially reinforced with the addition of 600 new police 
officers who graduated from the academy in Ma rch 2010, thus bringing th e total border police 
force to 5,875. Staff shortages suffered at border crossing points (BCPs) and police stations in 
previous years were addressed and perfor mance on the ground improved. So far 3,800 border 
police officers have been give n specialised training. However,  around 1,000 officers have yet 
to complete the specialised training for borde r police. Acquisition of the equipment required 
by the IBM Action Plan is unde r way, but has suffered some delays. The National Border 
Management Information System (NBMIS) has cont inued to be rolled out  and is operational 
at 18 BCPs. Police officers have access to Interpol databases. 
The IBM Action Plan needs to be  revised to include calculati ons for the staff and equipment 
complements for the blue border, reinforce gr een border surveillance and introduce the new 
concept for the Metkovic/Neum BCPs and a joint operational centre for maritime surveillance. Training needs to continue. Inter-agency cooperation on IBM is ensured by means of formal working groups and procedures but needs to be enhan ced at both regional 
and local levels.  
 
EN 56   EN In the case of  judicial co-operation in  civil and criminal matters , there has been further 
progress. Croatia has ad opted implementing legislation layi ng the foundation for practical and 
operational judicial cooperati on with Eurojust and has appo inted a liaison officer. In 2009, 
over 90% of the 1,469 requests for recognition/enfor cement of decisions by  foreign courts and 
arbitration decisions have been dealt with within one year. A ttention needs to be paid to 
avoiding any build-up of a b acklog at municipal courts. 
Following the amendment to the Constitution allo wing extradition of Croatian citizens, the 
Act on judicial cooperation in criminal matters  has been amended in July 2010. The European 
arrest warrant and the European enforcement order can therefore be implemented from the 
date of accession. An Extradition Agreement was signed with Montenegro. The Extradition Agreement with Serbia has entered into for ce in June 2010, and for the first time a person 
arrested in Croatia was extradited to Serbia. The Agreement with Bosnia and Herzegovina on mutual enforcement of judgments in criminal matters has been amended to facilitate enforcement of rulings.  
Some progress has been made as regards police co-operation . Agreements have been signed 
with Poland, Israel and Malta. An Agreem ent on combating cross-border crime was signed 
with Bosnia and Herzegovina. The Agreements with Greece and Serbia have entered into 
force. A Europol National Unit has been establ ished in the MoI. Memoranda of understanding 
have been signed with the United States of America and Kosovo and Interpol. Croatia has 
deployed a fourth police representative to the EULEX mission in Ko sovo. Cooperation with 
Serbia on fighting organised crime has been enhanced, through exchange s of police officers. 
Croatia continues to be activ e in international police coope ration. The Police Law and the 
implementing legislation on police sa laries and on the internal or ganisation of the MoI need to 
be amended in order to increase flexibility in  organisational decisions  within the police.  
Progress can be reported in the fight against  organised crime . The National Police Office for 
the Suppression of Corruption and Organised Crime (PNUSKOK) has been fully operational 
since September 2009. Four regional operational departments have star ted work. High-profile 
cases of organised crime have been investigat ed swiftly. The Ministry of the Interior has 
drawn up an organised crime threat assessm ent (OCTA) for 2009, based on the European 
crime intelligence model. The ministry, in c ooperation with the Office for the Suppression of 
Corruption and Organised Crime (USKOK), has drawn up the Pl an for Priorities in the 
Suppression of Organised Crime and has starte d implementing it. USKOK has been active in 
prosecuting high-profile cases of organised crime. However, furt her efforts in this area are 
necessary, particularly as regards use of th e new legislative framework and international 
agreements in practice. An agreement establ ishing a regional office for improving cooperation 
in the fight against organised crime was signe d in October 2010 with Albania, Bosnia and 
Herzegovina, Montenegro, Serbia and the former Yugoslav Republic of Macedonia. 
Some progress has been achieved in the fight  against trafficking of human beings. The 
Protocol on proceedings during the voluntary return of human trafficking victims has been 
adopted. Amendments have been made to the Protocol on identification of, help to and 
protection of victims of traffick ing in human beings to harmonise  it with the Aliens Act and 
the Protocol on proceedings during voluntary re turn of victims. In 2009, eight victims of 
trafficking have been identified while th e regional trend points towards a decrease in 
trafficking of human beings. E fforts to identify victims of labour exploitation need to be 
intensified. Training of police o fficers, judges, labour inspecto rs and health employees has 
been organised. Regional cooperation with neighbouring countries a nd interdisciplinary 
cooperation to prevent and identi fy victims of human trafficki ng need to be intensified.  
 
EN 57   EN Limited  progress on the fight against money launderi ng can be reported. Croatia's results in 
investigation and prosecution of  money laundering cases remain steady but in low numbers. . 
The coordination of the competent national author ities and the establishment of the Integrated 
Criminal Intelligence System are important achievements. However, the recent Threat Assessments produced by Europol and the SECI Centre (Southeast European Cooperative Initiative) show the clear need for Croatia to st ep up its efforts and reac h concrete results in 
this area. Overall, Croatia is moderately advanced in this area. (See Chapter 4: Free movement of capital.)  
Progress can be reported in the fight against terrorism . The MoI has adopted the Maritime 
Anti-terrorism Plan, but the action plan for prev ention and suppression of terrorism has yet to 
be adopted. Little progress has been made on  strengthening Croatia’s administrative and 
operational capacity. Inter-agency c oordination also needs to be enhanced. Training for bomb 
disposal experts needs to be introduced on a perm anent basis and experts’ practice needs to be 
coordinated by law. Some of the older X-ray e quipment is not in line with EU standards. 
Croatia needs to complete re-examination of the storage facilities for explosives and ammunition in line with the acquis and to replace old equipment. 
Progress has continued in the fight against  drugs . The 2010 programme for implementation 
of the Action Plan on Combating Drugs Abuse in Croatia has been adopted. An amendment to 
the Drug Abuse Prevention Act revised the checks  on trade in precursors, aligned the list of 
precursors with the EU acquis  and shortened the time limits fo r destroying seized drugs. The 
police have targeted their activi ties on organised criminal groups  rather than on small street-
dealers. Training of police offi cers and provision of the necessa ry equipment have continued. 
The national focal point (NFP) has delivered its third annual report to the European 
Monitoring Centre for Drugs a nd Drug Addiction (EMCDDA) and ha s been able to report on 
four of the five indicators. Two new permanen t posts for the national focal point have been 
advertised and one of them has already been filled. However, th e results in investigation and 
prosecution of drug related crime need to be considerably enhanced. Croatia remains on one 
of the main trafficking routes for drugs to the EU. 
In 2009, a total of 7,934 persons have been trea ted by the national drug addiction institutes. 
From 2010 on, as one of the measures to upgrade their standards, every therapeutic 
community has to provide data on treated patients to the Office for Drugs. The government has adopted a National Programme for Preventi on of Drugs amongst Youth with a view to 
updating the existing programmes.  
No progress can be reported on customs cooperation .  
(For counterfeiting of the euro see chapter 32 – financial control.) 
Conclusion 
Overall, Croatia made substant ial progress in this chapter. The asylum system has been 
significantly improved and the Asylum Commission strengthened. Attenti on needs to be paid 
to integrating persons granted protection in Croatia and to protecting minors amongst 
irregular migrants. Good progress has been made in  the field of visas, with the introduction of 
the uniform visa format and the setting-up of the Croatian visa databa se. However, alignment 
with the acquis  on visas needs to continue. Progress has been made in the field of external 
borders, notably in terms of staffing of the Bo rder Police. However, several aspects of the 
IBM Action Plan need to be amended and the up grading of equipment needs to be stepped up. 
 
EN 58   EN Significant progress was made in  the field of judicial coope ration in civil and criminal 
matters, notably with the amendments to  the legal framework which will allow 
implementation of the European arrest warr ant with effect from accession and with the 
signature of an extradition ag reement with Serbia. Progress also continued in the counter-
narcotics policy, but results in investigations and prosecution of the dr ug cases need to be 
enhanced.  
4.25. Chapter 25: Science and research 
Further progress can be reported with respect to research policy where,  overall, the level of 
alignment is already high. However, private-se ctor involvement and th e success rate in the 
Specific Programme on ‘People’ and, more sp ecifically, in the Mari e Currie fellowships, 
remain low.  
Croatia continued to participate actively in the EU’s Seventh  Framework Programme 
(FP7) . Croatia also strengthened its  administrative capacity by re viewing the nominations to 
the FP7 management committees and providing training to the national contact points. The 
action plan to stimulate participation in FP7 has produced good results, but the economic and 
financial crisis has put a temporar y end to financial incentives.  
With respect to its future integration into the European Research Area  (ERA), Croatia has 
made further progress in aligning its research  policy with the targets and actions of the 
European Research and Innovation Area. On mob ility of researchers,  the Ordinance on the 
Register of Researchers has been amended ope ning funding from the State budget also to non-
Croatian scientists. Research job vacancies have started to be advertised on Euraxess job portal. The Act on the Nationa l Foundation for Science and Higher Education is being 
implemented, except the provisions concerning financing research projects in a more 
competitive way, based on scientific excellence. No  progress was made on the overall level of 
investment in research which has been sta gnating since 2007 at about 0.9% of Croatia’s GDP. 
Involvement of industry and SMEs in  research activities is still weak. 
Conclusion 
Progress in this chapter has c ontinued, but has slowed down as  a result of the economic and 
financial crisis. Implementation and monitoring of commitments remain crucial. Efforts are 
needed to further improve the administrative and research capacity. Investment in research, through the involvement of industry and SMEs is to be increased.  
4.26. Chapter 26: Education and culture 
There has been good progr ess in the field of education, training and youth . The education 
reform has continued under the Education System Development Plan for 2005–2010. Croatia 
is participating in the strategic framework for European cooperation in  education and training, 
ET 2020. Croatia's performance is still above the EU-level benchmarks in relation to early 
school-leavers and upper secondary completion rates. It improved but  is still two thirds of the 
EU average for tertiary education attainment and participa tion in pre-school education. Adult 
participation in lifelong learning remains very lo w. The plan of activities for development of a 
national qualifications framework (NQF) is being implemented. National secondary school-
leaving exams have been introduced. Implem entation of the Bologna process in higher 
education has continued. Remaining challenges include implementing structural reform of 
universities and of their funding, implementing a learning outcomes approach and adoption 
 
EN 59   EN and self-certification of the Croatian Qualif ications Framework. The reform of vocational 
education and training and adult ed ucation is being implemented.  
The National Agency has kept implementing prep aratory measures, including management of 
pilot projects, with a view to fully participat e in the Life-long Learni ng and Youth in Action 
programmes. A declaration of assurance on the functioning of the National Agency has been 
provided. The Accession Partnership priorities in  the field of education, training and youth 
have been by and large met. 
Progress can also be reported in the field of culture . Additional efforts have been made to 
further promote Croatia's participation in  the EU Culture and Europe for Citizens 
programmes.  
Conclusion 
Further progress has been made in the areas of education, training, youth and culture. There is 
a good level of alignment with the acquis . Croatia needs to continue its efforts to prepare for 
the management of the Lifelong Learning and Youth in Action Programmes. Adult education 
requires continuous attention. 
4.27. Chapter 27: Environment 
Some progress has been made in the horizontal legislation . The transposition process is 
almost completed in this sector. Efforts to implement environmental impact assessment (EIA) 
and strategic environmental assessment (SEA) need to be increased. Implementation of 
provisions on public participatio n and access to justice in e nvironmental matters remains 
insufficient. In this respect, cooperation w ith the judiciary needs to be strengthened.  
There has been good progress in the field of air quality . Croatia has produced a programme 
for a gradual decrease in emissions of certa in air pollutants up to  the end of 2010 with 
emission projections for the peri od 2010–2020. Transposi tion of the new acquis  on ambient 
air quality and cleaner ai r for Europe is pending.  
There has been little progress in waste management . Sustained efforts for remediation of 
existing landfills and hot-spots and further establishment of systems for collection and management of different categories of waste are needed.  
In the field of water quality,  a significant step forward was taken with the adoption of the 
new Water Act and the Water Management Fina ncing Act. Implementing legislation relating 
to bathing water quality was also  enacted. Investment in this se ctor is currently insufficient. 
Monitoring and reporting also need to be improve d. Significant efforts are still needed in this 
area, including finalisation of a river basin management plan.  
There has been some pr ogress in the field of nature protection  with the adoption of 
implementing legislation on nature impact asse ssments. Preparations for drafting a list of 
marine Natura 2000 sites have started. Gaps remain in the administrative capacity for implementing and enforcing the acquis , especially in the State Institute for Nature Protection 
and at local level. In the forestry sector, ac tivities to implement the existing Croatian legal 
framework have continued.  
Alignment is well advanced in the area of industrial pollution control and risk 
management . Efforts have been made on further deve loping the European Pollutant Release 
 
EN 60   EN and Transfer Register (EPRTR). Activities for alignment of existing installations with the 
requirements of the Integrated Pollution Prev ention and Control and Large Combustion Plants 
Directives have been intensified. Significant fina ncial resources and efforts will be required to 
ensure sufficient administrativ e capacity in this sector.  
Alignment with the acquis  has further progressed in the field of chemicals,  with the 
amendment of the Law on biocides and the adop tion of the list of limited or banned dangerous 
chemicals. Efforts to implement and enforce le gislation on chemicals and SEVESO II need to 
be stepped up. 
As regards  climate change , good progress can be reported. Croatia  associated itself with the 
Copenhagen Accord. The country also continues to fulfil its reporting obligations under the 
UNFCCC and the Kyoto Protocol. While Croatia is making steady progress in aligning with 
climate change acquis, further efforts are needed, in particular to complete the 
implementation of the EU Emissions Trading Scheme, fuel quality requirements and EU 
acquis  adopted after 2009. However, Croatia has l odged an appeal against the decision of the 
Compliance Committee of the Kyoto Protoc ol regarding Croatia's compliance.  
Full transposition of the noise abatement legislation has been achieved. Noise  maps for towns 
and municipalities have yet to be adopted.  
Croatia joined the European Civil Protection  Mechanism in 2009. It pays  the costs out of its 
own budget. Croatia has been advancing well in it s preparations as rega rds civil protection.  
Efforts  to strengthen Croatia’s administrative cap acity have slowed down. Further efforts are 
still needed in this ar ea to allow proper implementation and enforcement of the legislation. 
Channels for coordination between ministri es and bodies involved in environmental 
protection need to be improved.  
Conclusion 
Overall, good progress has been made in th is chapter as regards both alignment and 
implementation of the legislation. Overall, Cr oatia's preparations are nearing completion. 
Legislative alignment in the field of water quality  and also, to a certain extent, climate change 
needs to be completed Administrative capacit y, especially at local level, needs further 
strengthening, in particular in the fields of nature protection and industrial pollution control 
and risk management. Implementation of the horizontal acquis, most notably on EIA, SEA 
and access to information and justice in envi ronmental matters, and cooperation with non-
governmental organisations active in the field of  environment needs to be improved needs to 
be improved.  
4.28. Chapter 28: Consumer and health protection 
There has been progress in the field of consumer protection . Government funding for 
regional counselling centres has continued. Publ ic awareness of the system for out-of-court 
settlement of consumer disputes remains lo w. Training for judges is continuing. A new 
collective redress system for consumers has been  put in place. Similar provisions have been 
introduced to give traders the same right s to collective protection against unlawful 
advertising.  
A National Consumer Protection Programme for 2009–2012 was adopted. Use of the existing 
system to collect consumer complaints has subs tantially increased, but needs to be improved. 
 
EN 61   EN About 30,000 market inspections on consumer issu es were carried out, including some in 
response to complaints by consumers. The inspec tions highlighted the need to improve price 
labelling and use of the warranty and to consolid ate traders’ legal obligation to facilitate and 
address complaints. Administrative capacity need s to be further strengthened. The support for 
the consumer movement needs to be continue d and consumers’ access to justice further 
improved with the aid of effective implemen tation of the National Consumer Protection 
Programme.  
Some progress can be re ported in the field of product safety-related issues. Coordination and 
cooperation between market surve illance authorities is in place. Market su rveillance activities 
were given a sound legal basis and have become more effective ( See Chapter) . 
There has been some progress in the area of non-safety-related issues . Implementing 
legislation on retail price labe lling was adopted. Further revisi on of the Consumer Credit Act 
is necessary to achieve full ali gnment with the EU legislation.  
Good progress can be repor ted in the area of public health . Progress has been moderate in the 
area of tobacco . The revisions of the Tobacco Act ha ve softened certain conditions, but 
remain in line with the acquis .  
Good progress has been made in the field of  communicable diseases  where Croatia meets the 
requirements of the acquis . On pandemic influenza, a new computerised network connects 
hospitals, county public health in stitutes and the Croatian Nationa l Institute for Public Health. 
The Ministry of Health and Social Welfare a dopted a new National Generic Integrated Plan 
for coordinated action in public health emergencies.  
Good progress can be reported in the area of blood, tissues and cells, where by-laws have 
been adopted with the aim of completing alignment of the legi slation. The reorganisation of 
the transfusion services is continuing. Howeve r, quality management of all blood transfusion 
centres is not yet ensured. Fac ilities for handling tissues and cel ls have not yet been upgraded, 
restructured and licensed in accordance with the EU technical requirements. In the field of 
reproductive cells, implementing legislation was adopted. As regards administrative capacity, 
the newly established Department for the Inspection and Monitoring of Blood, Tissues and Cells has begun to process appli cations for authorisations fo r assisted reproductive technology 
(ART) establishments, but not yet for bl ood and tissues/cells establishments.  
Some progress can be re ported in the field of mental health . The Mental Health Promotion 
Strategy was adopted. A network of 45 teams working on mental health care, addiction 
prevention and out-patient treatment was set up in public health institutes. However, 
community-based services remain insuffici ently developed as an alternative to 
institutionalisation. Financial re sources allocated to mental heal th care are still scarce. The 
Accession Partnership priority in th is field has therefore not been met yet. Preparations in this 
field have started. 
In the area of cancer screening , the national programme for early  detection of cervical cancer 
has been adopted. The national programmes for early detection of colorectal cancer and of 
breast cancer are producing results. However,  education of the ta rgeted population and 
investment in equipment are still needed to increase coverage. Preparations in these areas are 
well on track.  
Conclusion 
 
EN 62   EN There has been good progress in the area of cons umer and health protection. Alignment with 
the acquis is well advanced. Sustained efforts are necessary in order further to strengthen the 
administrative capacity to implement and enforce the legislation.  
4.29. Chapter 29: Customs Union 
Some progress has been made in the customs legislation . The new Regulation on the customs 
tariff for 2010 entered into force, aligning the Croatian tariff with the 2010 Combined 
Nomenclature. Further alignment with the EU  provisions on security aspects has been 
achieved. The new system for relief from cu stoms duties entered into force. Overall, 
alignment of the customs rules with the acquis  is very high, but minor discrepancies remain in 
the allocation of tariff quotas and th e internal trans it arrangements. 
Good progress can also be reported on administrative and operational capacity . The 
customs administration adopted its new Busi ness Strategy 2010-2012 in July and continued 
implementing its Anti-Corruption Programme , including an awareness campaign and the 
policy of systematic rotation of staff. The capacity and role of the internal control unit have 
been strengthened. Preparations for developing the national a pplication of the Integrated 
Tariff Management System (ITMS) and the Ne w Computerised Transit System (NCTS v4.0) 
were completed. Full testing could take place once the network connection is activated. The 
Croatian customs administrati on still has very limited in- house capacity to  guarantee the 
continuity of its IT services and remains heavily  dependent on external companies. Overall, in 
the areas of administrative and operational cap acity, Croatia has continued to address its 
targets and priorities consistently. 
Conclusion 
Good progress has been made in this chapter. Cr oatia’s customs legislatio n is aligned with the 
acquis  to a very large extent and additional al ignment was achieved over the reporting period. 
Croatia has also continued to make progress on its  administrative capacity, notably in the area 
of IT interconnectivity, where pr eparations for two key IT systems were completed. Further 
progress towards removing the last discrepancie s in Croatia’s legisl ation, implementing the 
Anti-Corruption Strategy and preparing fo r IT interconnectivity is required.  
4.30. Chapter 30: External relations 
Further progress has been made in connection with the common commercial policy . Croatia 
continued to cooperate and coor dinate with the Commission with  the aim of aligning with EU 
policies and positions towards non-EU countries  and within interna tional organisations. 
After the WTO  investigation on the provisional safeguard measures introduced in June 2009, 
Croatia withdrew the safeguard measures on chee se supplements and started to reimburse the 
duties paid by importers. The measures on hard cheeses (Edam and Gouda) were confirmed in 
November 2009 and expired in January 2010. Croatia  needs to ensure full compliance with its 
international obligations when resorting to  the safeguard measur es allowed under the 
Stabilisation and Association Agreement and th e WTO rules. Croatia furthermore needs to 
ensure a swift reimbursement of the duties paid by importers on cheese supplements during 
the period for which the provision al measures were applied. 
Croatia continued aligning with the EU list of dual-use items and raising operators’ awareness 
of the issue of dual-use goods . It continued to train custom s officers in this field. The 
 
EN 63   EN administrative, control and reporting capacity for dual-use goods needs to be further 
enhanced, in particular with the aid of training. Preparations  in this area are nearing 
completion.  
In the area of bilateral  agreements with non-EU countries , Croatia continued to implement 
its action plan to bring internati onal agreements into line with the acquis , but further efforts 
are required, in particular with regard to bilate ral investment treaties. Preparations in this area 
are on track.  
Some progress can be reported on development policy and humanitarian aid . Work 
continued on the programme to implement the National Strategy for Development 
Cooperation for the period 2009-2014. Further effo rts are required to complete the legal 
framework in this area and to reinforce the admi nistrative capacity. Overall, preparations in 
this field are on track.  
Conclusion 
Some progress has been made in this chapter. Overall, Croatia has reached an advanced level 
of alignment in the area of external relations  and is continuing to coordinate and align its 
positions in international fora. However, Croatia needs to pay attention to fully complying with its international obligations when resort ing to safeguards. Furt her strengthening of 
administrative capacity is needed in the areas of development policy and humanitarian aid.  
4.31. Chapter 31: Foreign, Security and Defence Policy 
The regular political dialogue  between the EU and Croatia c ontinued to cover foreign policy 
issues. (As regards neighbourly rela tions with other enlargement countri es and Member 
States, see Section 2.3 u nder Political criteria.)  
As regards the common  foreign and security policy (CFSP) , Croatia has continued to align 
itself when invited, with all re levant Council decisions and EU  declarations. It has been 
actively participating in the Barcelona Proce ss – Union for the Mediterranean. Croatia has 
further developed its administra tive capacity to work within the EU CFSP structures. The post 
of Political Director in the Ministry for Fore ign Affairs and European Integration is being 
established. 
There have been no particular developments with regard to sanctions and rest rictive measures  
or on conflict prevention .  
As regards non-proliferation , implementation of the National Strategy and Action Plan for the 
Control of Small Arms and Light Weapons has begun. Public-awareness activities have 
continued, including measures to collect and destroy weapons . Efforts to strengthen the 
implementation and enforcement capacity are continuing. These are key elements for the accession negotiations in this chapter. 
With regard to cooperation with inte rnational organisations , Croatia has, as a member of the 
UN, the OSCE, the Council of Europe and NATO, maintained its involvement in the policy-making of these organisations. In December 2009, Croatia completed its two-year term as a 
non-permanent member of the UN Security Counc il. During this period Croatia chaired the 
Security Council’s Counter-Terrorism Committee. (As regards the International Criminal 
Court, see Political criteria — Regio nal issues and international obligations .) 
 
EN 64   EN There have been no particular developments with regard to security measures  (classified 
information).  
Croatia reinforced its participation in EU  missions to support implementation of the common 
security and defence policy (CSDP) . It has been participating in the EU operation off the 
Somali coast (EU NAVFOR Somalia - ATALANTA). Croatia continued to provide logistical 
support to the EUFOR Althea mission in Bosnia and Herzegovina. The country remains 
committed to participating in the EU battlegrou ps. Administrative capacity-building measures 
have continued, including training for and participation by Croatian officials in the 
appropriate fora with EU counterparts.  
Croatia continued to support EU civilian missions. Croatia is participating in the EU rule of 
law mission (EULEX) in Kosovo and the EUPOL mission in Afghani stan with a total of five 
police officers and three judicial  and administrative officials.  
Croatia has continued to take part in NATO missions, with 320 members of the armed forces 
engaged in two missions in Afghanistan and in Kosovo. 
Conclusion 
Croatia has made further progress in this chapter.  It has continued to participate in several EU 
CSDP missions. Overall, Croatia has reached a hi gh level of alignment in the area of foreign, 
security and defence policy. Croatia needs to  continue strengthening implementation and 
enforcement of arms control, including th e transparency of arms-related information. 
4.32. Chapter 32: Financial Control 
Further progress has been made in the implementation of public internal financial control  
(PIFC) . The Central Harmonisation Unit (CHU) in the Ministry of Finance continued to 
oversee implementation of the PIFC stra tegy for the period 2009-2011. In September 2009, 
the CHU issued guidelines for conducting a ri sk management procedure to assist budget 
users. Based on the contributi ons of budget users at the stat e and local le vel, the CHU 
elaborated a consolidated 2009 an nual report on the PIFC syst em and presented it to the 
government. The administrative capacity of the CHU and all budget users at central and local 
levels needs to be further strengthened, incl uding on risk management. Implementation of the 
internal auditor’s training pl an continued. A Programme Counc il for professional training of 
internal auditors in th e public sector was esta blished in February 2010.  
Good progress can be repor ted in the field of external audit . The State Audit Office’s (SAO) 
independence was consolidated, after parliament  adopted amendments to the Constitution in 
June 2010. Reporting by the SAO to parliament improved, as in May 2010 the SAO submitted its first audit report on budget ex ecution to parliament prior to the discharge of the budget. 
However, parliament should further strengthe n its ownership and follow-up to SAO reports. 
Implementation of the SAO’s strategic de velopment plan for the period 2008-2012 is 
continuing. So far, the SAO’s approach to audi ts remains primarily transaction-based. More 
focus needs to be placed on a systems-based audit approach and further development of 
performance audit work. With th is in mind, auditors  need to be con tinuously trained on 
modern audit techniques.  
Progress has been made on protection of the EU’s financial interests . The institutional and 
legislative set-up for coordi nating cooperation between OLAF  and the Croatian national 
 
EN 65   EN authorities is in place. An anti-fraud strategy fo r protection of the EU’s financial interests for 
the period 2010-2012, including an action plan, was adopted by the government in January 2010 and regular information is provided about the measures taken to implement it. The 
operational independence of the Anti-Fraud Coor dination Structure (AFCOS) is described in 
this document. The Department for Combating Irregularities and Fraud in the Ministry of 
Finance needs to improve its performance in its  key role of coordinating the AFCOS network. 
Operational cooperation of the Croatian auth orities with the Commi ssion is considered 
smooth. 
Progress can be reported on protection of the euro against counterfeiting . Following 
consultations with OLAF, Croatia transposed th e most recent EU legislation in March 2010, 
i.e. the two Council regulations on protection of the euro against counterfeiting and on medals 
and tokens similar to euro coins.  
Conclusion 
Overall, progress can be reported in this chapter. Efforts need to focus on the sustainability of 
the reforms
. Croatia  needs to continue updating its PIFC  policy paper regularly. The bodies 
involved in the AFCOS system need to enhan ce their efforts on implementing the anti-fraud 
strategy efficiently. Parliamentary ownership of  the SAO’s reports needs to be enhanced.  
4.33. Chapter 33: Financial and budgetary provisions 
There has been further progress in the area of financial and budge tary provisions.  
With regard to traditional own resources  (TOR), the simulation exercise for A and B 
accounts for the last quarter of 2009 was completed. Workshops on the methods of 
establishing, accounting, book-k eeping and making available a nd reporting on TOR were held 
in the customs administration. Ho wever, there have been delays  in preparing the IT module 
for managing the A and B accounts. Work on a sy stem for writing off irrecoverable debts has 
to be accelerated. Post-clearance auditing needs to be strengthened. Further measures need to be taken to establish the relevant legal and ad ministrative framework and control mechanisms 
for sugar levies. Effective instruments for comb ating customs duty and VAT fraud have to be 
applied to protect the fina ncial interests of the EU. 
With regard to the VAT resource , further simulations of the VAT  base have been carried out 
and analytical capacity improved. Efforts will be needed to deve lop further the statistical basis 
and capacity for calculation of the weighted  average rate. Croatia needs to ensure 
implementation of the protocol on privileges and immunities of the European Communities. 
With regard to the GNI resource , the Croatian authorities ha ve achieved good results with 
application of the ESA95 method. Further efforts will be needed to improve the quality of the 
national accounts and GNI calculations.  
As regards administrative infrastructure , the Department for Coordination and 
Management of EU own resources  in the Ministry of Finan ce has improved its capacity for 
developing and coordinating an effective EU own resources system. Experience has been 
gained from establishing direct contacts with  EU Member States, fr om continuous training 
and from implementation of the own resources twinning light project.  
Conclusion 
 
EN 66   EN There has been further progress in this chapte r. The institutional cap acity for applying the 
rules on own resources has been further develo ped. Overall, Croatia has reached a good level 
of alignment with the acquis  and capacity to implement it, ex cept in the case of sugar levies. 
Croatia needs to further enhance its coordination capacity and put in place the rules and 
procedures still pending.  
 
EN 67   EN Statistical Annex  
STATISTICAL DATA (as of 14 October 2010) 
Croatia   
            
Basic data Note 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 
Population (thousand)  4 498e 4 439e 4 445 4 443 4 442 4 444 4 443 4 441 4 436 4 435 
Total area of the country (km²) 1) 56 542 56 542 56 542 56 594b 56 594 56 594 56 594 56 594 56 594 56 594 
            
National accounts Note 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 
Gross domestic product (GDP) (million national currency) 2) 176 690 190 796 208 223 227 012 245 550 264 367 286 341 314 223 342 159 3 33 063 
GDP (million euro) 2) 23 146 25 538 28 112 30 011 32 759 35 725 39 102 42 833 47 370 45 379 
GDP (euro per capita) 2) 5 229 5 752 6 331 6 759 7 380 8 043 8 807 9 656 10 683 10 246 
GDP (in Purchasing Power Standards ( PPS) per capita)  9 400.0e 9 900.0e 10 700.0e 11 200.0 12 100.0 12 700.0b 13 500.0 15 000.0 15 700. 0 15 100.0 
GDP per capita in PPS (EU-27 = 100)  49.2 50.0 52.2 54.1 55.8 56.4b 57.0 60.2 62.5 64.0 
Real GDP growth rate (growth rate of GDP volume, national currency, % change on previous 
year) 2) 3.0 3.8 5.4 5.0 4.3 4.2 4.7 5.5 2.4 -5.8 
Employment growth (national accounts,  % change on previous year)  4.0 -5.4 4.2 0.6 1.7 0.8e -0.6e 3.5e 1.1e -1.8 
Labour productivity growth: GDP growth per person employed (% change on previous year)  -0.9 9.8 1.2 4.3 2.5 3.4 5.4 1.9 1.3 -4 .1 
Real unit labour cost growth (national acc ounts, % change on previous year)  -3.4 -4.2 1.3 -7.3 6.7 -0.4 -10.2 -0.7 1.4 -1.3 
Labour productivity per person employed (GDP in PPS per person employed, EU-27 = 100)   61.3e 66.5e 66.6e 68.6e 69.5e 70.4e 73. 8e 75.7e 76.6e : 
Gross value added by main sectors (%)                      
Agriculture and fisheries 2) 8.4 8.4 8.2 6.8 7.2 6.5 6.3 6.1 6.4 6.7 
Industry 2) 23.4 22.8 21.9 21.4 21.8 20.9 20.6 20.4 20.2 19.1 
Construction 2) 4.9 5.4 5.5 6.6 7.1 7.4 7.7 7.7 8.3 8.1 
Services 2) 63.2 63.4 64.4 65.3 63.9 65.2 65.3 65.8 65.0 66.0 
Final consumption expenditure, as a share of GDP (%) 2) 84.6 82.7 83.1 81.4 80.4 80.2 78.9 78.7 77.7 76.7 
Gross fixed capital formation, as a share of GDP (%) 2) 18.8 19.4 21.2 25.0 24.6 24.6 26.1 26.2 27.6 24.7 
Changes in inventories, as a share of GDP (%) 2) -0.2 1.7 4.0 1.5 1.3 1.7 2.0 2.7 3.2 2.0 
Exports of goods and services, relative to GDP (%) 2) 42.0 43.8 41.0 42.9 43.3 42.6 43.4 42.8 41.9 36.1 
Imports of goods and services, relative to GDP (%) 2) 45.3 47.6 49.4 50.8 49.6 49.1 50.4 50.4 50.3 39.4 
            
Industry Note 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 
Industrial production volume index (2000=100) 3) 100.0 106.0 111.8 116.3 120.6 126.7 132.4 139.8 142.1 129.0 
            
Inflation rate Note 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 
Annual average inflation rate (HICP,  % change on previous year)  4.5 4.3 2.5 2.4 2.1 3.0 3.3 2.7 5.8 2.2 
 
EN 68   EN             
Balance of payments Note 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 
Balance of payments: current account total (million euro)  -568 -821 -2 099 -1 889 -1 434 -1 976 -2 715 -3 236 -4 338 -2 448 
Balance of payments current account: trade balance (million euro)  -3 492 -4 595 -5 958 -6 971 -6 724 -7 518 -8 344 -9 434 -10 794 -7 398 
Balance of payments current account: net services (million euro)  2 470 3 303 3 285 4 933 4 769 5 318 5 705 6 267 6 958 5 676 
Balance of payments current account: net income (million eur o)  -505 -628 -578 -1 095 -670 -959 -1 183 -1 113 -1 572 -1 761 
Balance of payments current account: net current transfers  (million euro)  959 1 099 1 152 1 245 1 192 1 184 1 107 1 043 1 071 1 036 
of which government transfers (million euro)  25 65 32 71 3 10 -9 -17 -20 -31 
Net foreign direct investment (FDI) (million euro)  1 136 1 258 531 1 657 671 1 276 2 557 3 403 3 203 957 
Foreign direct investment (FDI) abroad (million eur o) 4) -5 -210 -607 -106 -279 -192 -208 -267 -989 -919 
of which FDI of the reporting economy in EU-27 countri es (million euro)  15 -152 -72 -7 -14 -66 37 -563 -738 -528 
Foreign direct investment (FDI) in the reporting economy (million euro) 4) 1 141 1 467 1 138 1 762 950 1 468 2 765 3 670 4 192 1 875 
of which FDI of EU-27 countries in the reporting econom y (million euro)  916 1 344 1 063 1 498 919 1 439 3 500 3 687 3 242 1 84 2 
            
Public finance Note 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 
General government deficit/surplus, relati ve to GDP (%) 5) : -6.5 -4.1 -5.5 -4.3 -3.5 -3.0 -2.5 -1.4 -4.1 
General government debt relative to GDP (%) 5) : 40.1 40.0 40.9 43.2 38.3 35.5 32.9 28.9 35.3 
            
Financial indicators Note 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 
Gross foreign debt of the whole economy, relative to GDP (%) 6) 53.0 53.3 53.9 66.3 70.0 72.1 74.9 76.9 82.6 95.0 
Gross foreign debt of the whole economy, relative to total exports (%) 6) 126.0 121.7 131.2 154.3 161.8 169.2 172.5 179.7 197.1  263.1 
Money supply: M1 (banknotes, coins, overnight deposits, mi llion euro)  2 373 3 216 4 148 4 432 4 505 5 263 6 606 7 901 7 539 6 458 
Money supply: M2 (M1 plus deposits with maturity up to two years, million euro)  : : : : : : : : : : 
Money supply: M3 (M2 plus marketable instruments, million euro)  : : : : : : : : : : 
Total credit by monetary financial institutions to resi dents (consolidated) (million euro)  9 483 11 891 15 119 16 526 18 417 2 2 836 27 274 30 863 34 756 34 700 
Interest rates: day-to-day money rate, per annum (%)  6.9 3.0 1.3 4.3 5.9 3.4 2.4 5.6 6.6 7.8 
Lending interest rate (one year), per annum (%)  20.6 19.5 16.5 15.0 14.4 13.1 12.1 12.1 12.2 12.6 
Deposit interest rate (one year), per annum (%)  8.2 6.6 5.4 3.8 3.8 3.9 4.0 4.2 4.8 5.3 
euro exchange rates: average of period - 1 euro = … national currency  7.634 7.471 7.407 7.564 7.496 7.400 7.323 7.336 7.223 7. 340 
Effective exchange rate index (2000=100)  100.0 98.5 96.6 95.0 92.3 91.0 89.9 88.5 85.8 88.1 
Value of reserve assets (including  gold) (million euro)  3 783 5 334 5 651 6 554 6 436 7 438 8 725 9 307 9 121 10 376 
            
External trade Note 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 
Value of imports: all goods, all partners (million euro)  : : 11 327.0 12 509.9 13 354.4 14 949.5 17 104.7 18 686.5 20 761.9 14 806 .1 
Value of exports: all goods, all partners (million euro)  : : 5 188.2 5 438.9 6 453.8 7 069.4 8 251.6 8 854.7 9 342.1 7 393.6 
Trade balance: all goods, all partners (million euro)  : : -6 138.9 -7 071.0 -6 900.5 -7 880.1 -8 853.1 -9 831.8 -11 419.8 -7 412.5  
Terms of trade (export price index / import price index)  98.3 94.4 97.8 97.5 109.3b 92.6 100.2 97.5 96.1 109.2 
Share of exports to EU-27 countries in value of total exports (%)  : : 66.1 68.3 65.8 63.3 64.3 60.9 62.1 61.0 
Share of imports from EU-27 countries in value of total imports (%)  : : 71.9 73.3 71.0 67.9 67.2 64.8 64.2 62.3 
 
EN 69   EN             
Demography Note 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 
Natural growth rate: natural change (births minus deaths) (per 1000 i nhabitants)  -1.5 -1.9 -2.4 -2.9 -2.1 -2.1 -2.0 -2.4 -1.9 : 
Infant mortality rate: deaths of children under one year of age per 1000 live births  7.4 7.7 7.0 6.3 6.1 5.7 5.2 5.6 4.5 5.3 
Life expectancy at birth: male (years)  70.5 71.1 71.2 71.4 72.0 71.8 72.5 72.3 72.4 72.9 
Life expectancy at birth: female (years)  77.8 78.1 78.3 78.4 79.0 78.8 79.3 79.2 79.6 79.6 
            
Labour market Note 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 
Economic activity rate (15-64): share of  population aged 15-64 that is economically active (%) 7) 62.2 62.2 62.9 62.4 63.7 63.3  62.6 63.2 63.2 62.4 
Employment rate (15-64): share of population aged 15 to 64 that is in employment (%) 7) 51.3 51.8 53.4 53.4 54.7 55.0 55.6 57.1  57.8 56.6 
Employment rate male (15-64) (%) 7) 57.4 59.0 60.5 60.3 61.8 61.7 62.0 64.4 65.0 62.4 
Employment rate female (15-64) (%) 7) 45.5 44.9 46.7 46.7 47.8 48.6 49.4 50.0 50.7 51.0 
Employment rate of older workers (55-64):  share of population aged 55 to 64 that is in 
employment (%) 7) 24.2 23.7 24.8 28.4 30.1 32.6 34.3 35.8 36.7 38.5 
Employment by main sectors (%)                      
Agriculture 7) 11.7 15.6 15.5 16.9 17.0 17.3 14.2 13.0 13.6 14.1 
Industry 7) 22.7 23.1 22.6 22.1 21.4 20.5 20.9 21.8 21.6 20.0 
Construction 7) 5.9 6.3 7.2 8.1 8.2 8.2 8.4 8.8 8.9 8.7 
Services 7) 59.6 55.0 54.6 52.8 53.2 54.0 56.3 56.4 55.9 57.3 
Unemployment rate: share of labour force that is unemployed (%) 7) 17.0 16.3 14.7 14.1 13.6 12.6 11.1 9.6 8.4 9.1 
Share of male labour force that is unemployed (%) 7) 15.9 14.4 13.2 12.8 12.0 11.6 9.8 8.4 7.0 8.0 
Share of female labour force that is unemployed (%) 7) 18.2 18.7 16.5 15.6 15.6 13.8 12.7 11.2 10.1 10.3 
Unemployment rate of persons < 25 years: shar e of labour force aged <25 that is unemployed 
(%) 8) 43.1 41.7 34.4 35.8 33.8 32.0 28.8 24.0 22.0 25.1 
Long-term unemployment rate: share of labour force that is unemployed for 12 months and 
more (%) 9) 9.1 10.1 8.9 8.4 7.3 7.4 6.7 5.9 5.3 5.2 
            
Social cohesion Note 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 
Average nominal monthly wages and salaries  (national currency)  4 869.0 5 061.0 5 366.0 5 623.0 5 985.0 6 248.0 6 634.0 7 047.0  7 544.0 7 711.0 
Index of real wages and salaries (index of nom inal wages and salaries divided by the CPI) 
(2000=100)  100.0 99.2 103.2 106.1 112.2 113.4 116.6 120.4 121.5 121.3 
Early school leavers - Share of population aged 18 -24 with at most lower secondary education 
and not in further education or training (%) 10) : : 8.3 8.4 6.2 4.8 5.1 3.9 3.7 5.4 
            
Standard of living Note 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 
Number of passenger cars per 1000 population  250.1 269.3 280.0 291.1 301.1 311.6 323.2 335.7 346.1 345.5 
Number of subscriptions to cellular mobile telephone se rvices per 1000 population  247.2 390.0 520.4 571.0 638.3 821.4 989.2 1 133.7 1 325.4 1 360.7 
            
Infrastructure Note 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 
Density of railway network (lines in operation, per 1000 km²)  47.8 47.8 47.8 47.7 47.7 47.7 47.7 47.7 47.7 47.7 
Length of motorways (thousand km)  0.4 0.4 0.5 0.6 0.7 0.8 0.9 1.0 1.0 1.1 
            
Innovation and research Note 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 
Spending on human resources (public expenditure on educati on in % of GDP)  4.5 4.2 4.3 4.5 : : : : : : 
Gross domestic expenditure on R&D in % of GDP  1.1 0.9 1.0 1.0 1.1 0.9 0.8 0.8 0.9 : 
Percentage of households who have Internet access at home (%)  : : : : : : : 41.0 45.0 50.0 
 
EN 70   EN : = not available 
p = provisional value e = estimated value 
b = break in series 
1) Land area; break in series due to improved methodology. 2) Since 2006, data is calculated on the basis of the sum of quarterly values. 
3) Gross series; include NACE Sections C to E. 
4) The balance of payments sign conventions are used. For FDI abroad a minus sign means  investment abroad by the reporting econ omy exceeded its disinvestment in the period, while an entry without 
sign means disinvestment exceeded investment. For FDI in the repo rting economy an entry without sign means that investment into  the reporting economy exceeded di sinvestment, while a minus sign 
indicates that disinvestment exceeded investment. 
5) Data as received by Eurostat in the framework of the annual fiscal notification procedure in spring each year. 
6) Gross foreign debt of the whole ec onomy excluding Special Purpose Entities. 
7) 2000 to 2001, second half of the year; data used until 2006 refe r to half-year periods and from 2007 used data refer to quar ter periods. 
8) For 1996-2006, data refer to the second half of the year; data used until 2006 refer to half-year periods and from 2007 used  data refer to quarter periods. 
9) 1996 to 2001, second half of the year; for 1996-2001, long-term unemployment refers to thirteen months or more; data used un til 2006 refer to half-year periods and from 2007 used data refer to quarter 
periods. 
10) Second half of the year; data used until 2006 refer to half- year periods and from 2007 used data refer to quarter periods
. 
11) 2000-2008: Croatia closed all coal mines in 1999 and 2000 and therefore, there is no production of coal starting in 2000.              
Environment Note 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 
Greenhouse gas emissions, CO2 equival ent (tons, 1990=100)  82.4 86.4 89.4 94.8 94.9 96.7 98.1 102.8 99.1 : 
Energy intensity of the economy (kg of oil equivalent per 1000 euro GDP)  286.0 280.3 288.1 281.0 269.9 260.8 250.4 247.3 235.4  : 
Electricity generated from renewable sources in % of gross el ectricity consumption  40.0 42.7 33.9 29.4 41.0 40.4 36.1 25.4 30. 3 : 
Road share of inland freight transport (% of tonne-km)   : 75.9 76.4 76.1 76.7 75.9 74.8 74.0 76.5 77.7 
            
Energy Note 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 
Primary production of all energy products (thousand TOE)  3 562 3 730 3 689 3 727 3 852 3 781 4 128 4 037 3 964 : 
Primary production of crude oil (thousand TOE)  1 328 1 232 1 200 1 138 1 079 1 017 985 937 875 : 
Primary production of hard coal and lignite  (thousand TOE) 11) 0 0 0 0 0 0 0 0 0 : 
Primary production of natural gas (thousand TOE)  1 355 1 642 1 732 1 789 1 796 1 854 2 204 2 349 2 217 : 
Net imports of all energy products (thousand TOE)  4 174 4 166 4 967 4 985 5 090 5 234 4 866 5 315 5 491 : 
Gross inland energy consumption (thousand TOE)  7 819 7 959 8 624 8 828 8 842 8 902 8 948 9 323 9 122 : 
Electricity generation (thousand GWh)  10.7 12.2 12.3 12.7 13.3 13.1 13.0 12.4 12.6 : 
            
Agriculture Note 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 
Agricultural production volume index of goods  and services (produc er prices, previous 
year=100)  88.7 107.4 107.9 91.4 106.9 107.4 103.4 97.3 108.5 100.1 
Total utilised agricultural area (thousand hectare)  1 169 1 178 1 181 1 196 1 176 1 211 1 230 1 202 1 288 1 300 
Livestock: cattle (thousand heads, end of period)  427 438 417 444 466 471 483 467 454 447 
Livestock: pigs (thousand heads, end of period)  1 234 1 234 1 286 1 347 1 489 1 205 1 488 1 348 1 104 1 250 
Livestock: sheep and goats (thousand heads, end of period)  608 632 677 673 848 931 783 738 727 695 
Production and utilisation of milk on the farm (total whole milk, thousand tonnes)  626 674 716 686 708 813 870 883 848 838 
Crop production: cereals (including rice ) (thousand tonnes, harvested production)  2 312 2 829 3 080 2 014 3 067 3 039 3 034 2 534 3 726 3 442 
Crop production: sugar beet (thousand tonnes, harvested produc tion)  482 965 1 183 678 1 260 1 338 1 560 1 583 1 270 1 217 
Crop production: vegetables (thou sand tonnes, harvested production)  196 208 218 154 150 286 304 281 308 337