COMMISSION STAFF WORKING DOCUMENT Analysis of the recovery and resilience plan of Croatia Accompanying the document Proposal for a COUNCIL IMPLEMENTING DECISION on the approval of the assessment of the recovery and resilience plan for Croatia
Date: 2021-07-08
Institutions: European Commission, Secretariat-General
Subjects: Croatia, EU aid, coronavirus disease, economic and social cohesion, economic recovery, economic reform, epidemic, investment, structural adjustment

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 8.7.2021  SWD(2021) 197 final  COMMISSION STAFF WORKING DOCUMENT Analysis of the recovery and resilience plan of Croatia Accompanying the document Proposal for a COUNCIL IMPLEMENTING DECISION on the approval of the assessment of the recovery and resilience plan for Croatia {COM(2021) 401 final}  
 
 
Table of contents 

1. 

Executive summary ......................................................................................................................... 2 

2.  Recovery and resilience challenges: scene-setter .......................................................................... 6 

2.1.  Macroeconomic outlook and developments since the 2020 country report ............................... 6 

2.2. 
Challenges related to sustainable growth, cohesion, resilience and policies for the next 
generation ................................................................................................................................................. 8 

2.3. 

Challenges related to the green and digital transition ............................................................... 11 

Green dimension ........................................................................................................................... 11 

Digital dimension .......................................................................................................................... 15 

3.  Objectives, structure and governance of the plan........................................................................ 21 

3.1.  Overall strategy of the plan ........................................................................................................ 21 

3.2. 

Implementation aspects of the plan ........................................................................................... 24 

4. 

Summary of the assessment of the plan ...................................................................................... 28 

4.1. 

Comprehensive and adequately balanced response to the economic and social situation ...... 28 

4.2. 

Link with country-specific recommendations and the European Semester ............................... 33 

4.3.  Growth potential, job creation, economic, institutional and social resilience, European 
Pillar of Social Rights, mitigating the impact of the crisis, and social territorial cohesion and 
convergence ............................................................................................................................................ 41 

4.4. 

The principle of ‘do no significant harm’ .................................................................................... 48 

4.5.  Green transition .......................................................................................................................... 50 

4.6. 

Digital transition .......................................................................................................................... 56 

4.7. 

Lasting impact of the plan ........................................................................................................... 59 

4.8.  Milestones, targets, monitoring and implementation................................................................ 61 

4.9. 

Costing ........................................................................................................................................ 64 

4.10.  Controls and audit ....................................................................................................................... 66 

4.11.  Coherence ................................................................................................................................... 70 

ANNEX: Climate and digital tracking table ............................................................................................ 73 

1 

 
 
 
 
 
1.  EXECUTIVE SUMMARY 

The  COVID-19  pandemic  has  had  a  detrimental  impact  on  the  Croatian  economy. 
Croatia’s economy contracted by 8% in 2020, the steepest drop on record and among Central 
and Eastern European countries. This was primarily due to major difficulties experienced by 
the tourism sector linked to restrictions on travel and providing contact-based services. The 
labour market has been impacted as well, albeit to a smaller extent. The unemployment rate 
increased by 0.9 percentage points to 7.5%. This relatively mild increase can be attributed to 
the  rather  brief  and  moderate  nature  of  containment  measures  and  to  the  government 
incentives  to  retain  the  workforce,  that  were  largely  financed  using  SURE1  and  European 
Structural  and  Investment  (ESI)  Funds.  After  the  sharp  drop  in  economic  activity,  a  swift 
recovery is predicted in the Commission 2021 Spring Forecast for the following years. Real 
GDP growth is forecast to be 5.0% in 2021 and 6.1% in 2022, with the unemployment rate 
falling  to  pre-crisis  level  by  2022.  As  a  result  of  the  contraction  in  economic  activity  and 
increased  government  expenses  due  to  support  measures,  public  finances  have  also  been 
negatively  affected.  The  government  balance  deteriorated  to  a  deficit  of  7.4%  of  GDP  in 
2020,  ending  the  positive  trend  of  three  consecutive  budget  surpluses.  The  debt  ratio  is 
expected to have peaked in 2020 at 88.7% of GDP and should resume declining in 2021 and 
2022. 

Structural  weaknesses  in  the  Croatian  economy  weigh  on  the  economic  recovery  and 
hinder  its  long-term  sustainable  growth.  Croatia’s  business  environment  is  burdensome, 
complex and restrictive and the public administration's efficiency in Croatia ranks below the 
EU  average,  partly  due  to  territorial  fragmentation.  There  is  a  need  to  strengthen  the 
framework  to  prevent,  detect  and  correct  corruption.  Research  and  development  intensity 
remains  relatively  low  and  there  is  scope  to  significantly  improve  education  outcomes. 
Employment and labour market activity rates are among the lowest in Europe, partly due to 
skills gaps and mismatches.  

Croatia’s recovery and resilience plan has an estimated total cost of EUR 6.4 billion and 
is  structured  around  five  priorities  -  i) economy,  (ii)  public  administration,  judiciary  and 
state, (iii) education, science and research, (iv) labour market and social security, (v) health 
care - and one initiative for renovating buildings. It consists of 222 individual measures (76 
reforms and 146 investments). The estimated total cost of the plan is above the non-repayable 
financial support available to Croatia under the RRF Regulation of EUR 6.3 billion. Croatia 
has not requested any loans under the RRF Regulation.  

Croatia’s  plan  represents  to  a  large  extent  a  comprehensive  and  adequately  balanced 
response  to  the  economic  and  social  situation,  therefore  contributing  appropriately  to 
the  six  policy  pillars  referred  to  in  Article  3  of  the  Regulation2.  The  plan  supports  the 
green 
through  several  components  by  focusing  on  climate-related  and 
environmental  measures  and  on  preserving  biodiversity.  Digital  measures  are  included  in 

transition 

1 Support to mitigate Unemployment Risks in an Emergency (SURE) 
2 Regulation (EU) 2021/241 of the European Parliament and of the Council of 12 February 2021 establishing the 
Recovery and Resilience Facility (hereafter ‘the Recovery and Resilience Facility Regulation’). 

2 

 
 
                                                           
most of the components of the Croatian plan reflecting the broad and cross-cutting nature of 
the  envisaged  digitisation  efforts.  Furthermore,  numerous  components  contribute  to  smart, 
inclusive  and  sustainable  growth,  including  through  measures  to  improve  the  business 
environment,  support  SMEs  and  large  enterprises,  innovation  and  R&D.  Moreover,  social 
cohesion  is  strengthened  mainly  through  active  labour  market  policy  measures  and  by 
providing support to appropriate skills development tailored for vulnerable groups. As one of 
the  critical  sectors  for  achieving  crisis  preparedness  and  resilience,  the  health  sector  is 
specifically  supported  by  a  dedicated  component  in  the  recovery  and  resilience  plan. 
Measures to support the development of family and community-based services in the area of 
long-term care and to strengthen the public administration should contribute significantly to 
institutional  resilience.  Finally,  investments  in  education,  research  and  innovation  target 
specifically  children  and  the  youth  and  are  therefore  essential  to  support  the  education  and 
future of the next generation. 

Generally,  the  plan  constitutes  a  comprehensive  package  of  reforms  and  investments 
addressing all or a significant subset of the challenges and recommendations identified 
in the European Semester. The plan addresses the country-specific recommendations with 
reforms to reinforce the budgetary framework, active labour market policy measures and the 
implementation of the education reform by improving access to education and its quality and 
labour  market  relevance.  The  challenges  faced  by  the  Croatian  healthcare  system  are 
addressed  by  measures  to  improve  the  efficiency,  quality,  accessibility,  and  financial 
sustainability,  which  was  especially  stricken  by  the  COVID-19  pandemic.  Furthermore, 
through  advancing  the  decarbonisation  of  the  energy  sector,  increasing  overall  energy 
efficiency,  and  focusing  investments  on  sustainable  transport  and  digital  infrastructure  and 
services,  the  plan  addresses  country-specific  recommendations  in  those  areas.  Finally,  the 
plan  contains  far-reaching  measures  to  improve  the  efficiency  of  the  public  administration 
and  justice  system,  to  prevent,  detect  and  correct  corruption,  to  improve  the  business 
environment and to support investment in and policy relevance of research and innovation.   

The Croatian recovery and resilience  plan envisages to address some of the social and 
economic  challenges  that  have  emerged  or  were  exacerbated  during  the  COVID-19 
crisis and two major series of earthquakes in 2020. The plan includes various interventions 
in social policies, aimed at, among others, expanding access to early childhood education and 
care,  developing  digital  solutions  to  exchange  data  on  social  benefits,  introducing  social 
mentoring  services  to  promote  employment  and  social  inclusion  and  increasing  long-term 
care  capacity.  In  addition,  funding  under  the  RRF  for  building  renovation  will  support  the 
regions that were hit by earthquakes. 

The  recovery  and  resilience  plan  contributes  to  climate  objectives  for  40.3%  of 
Croatia’s  allocation  of  EUR  6.3  billion,  surpassing  the  climate  target  of  37%.  Planned 
measures in the Croatian plan are aligned with the National Energy and Climate Plan and are 
thus expected to directly contribute to reaching EU’s 2030 climate targets, but also to support 
transition towards climate neutrality by 2050. The plan includes support of EUR 3.3 billion to 
the  climate  and  environmental  objectives,  notably  through  significant  reforms  and 
investments  promoting  energy  efficiency,  renewable  energy,  and  sustainable  mobility. 
Significant  energy  savings  in  final  and  primary  energy  consumption  are  expected  from 
energy  efficiency  measures  in  industrial  processes  and  building  renovation  addressing 
earthquake  consequences.  Legislative  reforms  addressing  administrative  and  regulatory 

3 

 
 
obstacles  to  unlock  the  potential  for  renewable  energy  are  accompanied  by  investments 
upgrading  the  electricity  grid  to  enable  additional  uptake  of  renewable  energy  sources. 
Furthermore,  the  plan  will  support  the  development  of  infrastructure  for  low-carbon 
transportation modes, specifically by decarbonising public transport, road and coastal traffic, 
as well as the electrification and digitalisation of road and air transport. Investments in carbon 
capture and geological storage are expected to contribute to climate mitigation in the longer 
run.  Climate  change  resilience  is  addressed  with  investments  in  flood  risk  mitigations.  All 
measures in  the Croatian plan have passed the ex-ante  assessment of the  ‘do no significant 
harm’ principle. 

The recovery and resilience plan contributes to the digital objective for 20.4% (close to 
EUR  1.3  billion)  of  Croatia’s  allocation  of  EUR  6.3  billion,  thus  achieving  the  digital 
target of 20%. Specific support for the digital transition in most components of the recovery 
and resilience plan reflects the broad and cross-cutting nature of the envisaged digitalisation 
efforts  that  will  be  further  embedded  in  a  new  strategic  framework  “Croatia’s  2030  Digital 
Strategy”. Tackling the urban-rural digital divide will be pursued by increasing the national 
broadband coverage with very high-capacity networks (VHCN) where commercial interest is 
insufficient.  Citizens  and  businesses  will  benefit  from  the  digital  transition  of  the  public 
administration,  strengthening  the  interoperability  of  digital  services,  as  well  as  by 
harmonising  and  centralising  the  helpdesk  system  of  all  public  administrations’  online 
services and significant investments to expand the capacity of the State Cloud. Education will 
benefit from investments to support digital skills development with particular attention to the 
digital  shift  of  higher  education.  Businesses  in  the  cultural  and  creative  sectors  will  also 
benefit from special support for digitalisation. 

The implementation of the investments and reforms envisaged in the plan is expected to 
bring  a  lasting  impact,  reinforce  structural  changes  in  several  policies  areas  and  will 
help  strengthen  institutional  resilience.  Investments  in  clean  energy,  modernising  the 
transport system, and the digital and green transition will help foster greater sustainability of 
the economy. Given that the tourism sector is one of the main drivers of growth in Croatia, 
investments in inland tourism and extending the tourist season together with the transition to 
a  greener  tourism  sector  will  strengthen  its  sustainability.  Investments  in  the  digitalisation 
and  capacity  of  the  public  administration  and  measures  improving  design,  implementation, 
coordination and management of public policies, enhancing corporate governance in strategic 
SOEs and reducing the administrative burden on citizens and businesses, are expected to lead 
to  higher  productivity  and  thus  have  a  positive  lasting  impact.  The  measures  aimed  to 
improve the education system, introduce structural changes in the Croatian R&I ecosystem, 
and increase employability in youth and vulnerable groups will also positively affect potential 
growth in the long term. Overall, the plan addresses many of the country's core problems in 
the  areas  of  labour  market,  productivity,  business  environment,  and  competitiveness 
challenges. 

The overall implementation of the plan will be monitored by the Croatian Ministry of 
Finance  that  will  appoint  relevant  implementing  bodies  depending  on  the  scope  of  the 
measures included under the specific component. At the same time, components containing 
measures with a broader scope will involve multiple ministries and agencies. The milestones 
and  targets  of  the  Croatian  plan  constitute  an  appropriate  framework  to  allow  the  efficient 
monitoring of its implementation. The proposed qualitative and quantitative indicators used 

4 

 
 
for the milestones and targets are sufficiently clear, realistic and comprehensive to ensure that 
their completion can  be  traced and verified. Where compliance  with  the  Do No Significant 
Harm principle cannot be ascertained in advance, the milestones and targets associated with 
the measure layout adequate safeguards for compliance. The large number of milestones and 
targets appears commensurate to the size of the reform and investment package; however, the 
implementation  of  the  plan  will  crucially  hinge  on  the  administrative  and  implementation 
capacity  of  the  implementing  bodies  which  will  be  reinforced  and  needs  to  be  closely 
monitored to ensure such capacity is adequate to the challenge. 

Based on the assessment of a clear breakdown of costs for each investment and reform 
and  related  supporting  documents,  the  estimated  total  cost  of  the  plan  appears 
reasonable  and  plausible.  The  plan  provides  adequate  explanations  on  the  methodology 
used  for  establishing  the  cost  estimates  for  a  clear  majority  of  measures.  Furthermore,  by 
providing  sufficient  information  and  evidence  that  the  estimated  total  costs  of  the  recovery 
and  resilience  plan  align  with  the  nature  and  type  of  the  envisaged  investments,  the 
plausibility  of  costs  has  been  assured.  The  non-repayable  financial  contribution  of  the 
Recovery and Resilience Facility is planned to fully fund most of the measures contained in 
the  plan,  thus  mitigating  the  risk  of  double  funding.  In  addition,  sufficient  information  has 
been  provided  to  prevent  such  risk  in  cases  of  using  other  funding  sources.  In  general,  the 
estimated  total  cost  of  the  plan  corresponds  to  the  expected  national  economic  and  social 
impact and is aligned with the principle of cost-efficiency. Nonetheless, the lack of clarity of 
information and evidence provided on the reasonability and plausibility a limited number of 
cost estimates precludes the highest rating of this assessment criterion. 

The Croatian plan adequately describes the system for the implementation of the audits 
and  controls.  The  system  presents  a  robust  process  and  structure,  where  the  roles  and 
responsibilities  are  clearly  defined.  The  relevant  control  functions  are  appropriately 
segregated  in  line  with  the  applicable  Union  and  national  law.  For  the  management  and 
monitoring of the implementation of the plan, the Croatian authorities will use an upgraded 
IT system. The proposed measures give assurance that there is an adequate level of control to 
prevent,  detect,  and  correct  irregularities  identified  when  using  funds  provided  by  the 
Facility.  

The plan’s five components and the initiative represent a package of coherent reforms 
and investments, which are mutually reinforcing or complementary, since they aim to act in 
synergy  while  considering  Croatia’s  development  potential  and  development  challenges  at 
regional, national, European and global levels. 

(1)  

(2)  

(3)  

(4)  

(5)  

(6)  

(7)  

(8)  

(9)  

(10)  

(11)  

Balanc
ed 
Respo
nse 

CSRs 

Growt
h, 
jobs… 

DNSH 

Green 
target 

Digital 
target 

Lastin
g 
impact 

M & T 

Costin
g 

Coher
ence 

Contr
ol 
Syste
ms 

A 

A 

A 

A 

A 

A 

A 

A  

B 

A 

A 

5 

 
 
 
 
  
 
 
  
 
 
  
 
 
 
 
2.  RECOVERY AND RESILIENCE CHALLENGES: SCENE-SETTER 

2.1. Macroeconomic outlook and developments since the 2020 country report    

The COVID-19 crisis had a particularly detrimental impact on the Croatian economy, 
while  policy  measures  cushioned  the  impact  on  household  incomes.  Croatia’s  economy 
contracted by 8% in 2020, the steepest drop on record and among peer countries. The drop in 
output was concentrated in the first half of 2020, followed by strong growth in the ensuing 
quarters.  The  impact  was  largely  due  to  the  particular  difficulties  of  the  tourism  sector. 
Private  consumption  also  took  a  strong  hit,  while  household  incomes  remained  relatively 
shielded.  Emergency  measures  to  protect  incomes  during  the  crisis,  together  with  the  pre-
existing tax-benefit system, cushioned about 85% of the household market income losses in 
Croatia, with more than half of the effect due to monetary compensation schemes3. 

According  to  the  Commission  2021  Spring  Forecast,  real  GDP  growth  is  forecast  to 
bounce back to 5.0% in 2021 and to 6.1% in 2022. The recovery is set to be rather quick 
and  broad-based  as  tourism  starts  to  recover,  while  private  consumption  is  set  to  obtain  a 
boost from  demand and  accumulated savings as  constraints on the  consumption  of services 
ease. Investment is expected to be an important driver of growth in the coming period, driven 
by post-earthquake reconstruction and substantial ESIF and RRF funds. Inflation dropped to 
0%  in  2020  and  is  expected  to  remain  moderate  (1.3%  in  2021  and  2022)  despite  the 
expected pick-up in economic activity.   

The labour market took a relatively mild hit given the size of the economic contraction 
and  is  expected  to  recover  gradually.  After  several  years  of  falling  unemployment,  the 
onset  of  the  COVID-19  crisis  reversed  this  trend  and  led  to  a  decrease  in  employment  of 
1.2%.  Job  losses  were  recorded  in  the  first  three  quarters  of  2020,  after  which  job  creation 
resumed.  The  unemployment  rate  increased  to  7.5%,  which  is  still  lower  than  the  level  in 
2018. This relatively mild increase can be attributed to the relatively brief and mild nature of 
the  COVID  19  containment  measures  and  incentives  by  the  government  to  retain  the 
workforce. In the 2021 Commission Spring Forecast, an increase in employment of 0.6% and 
1.4% is expected for 2021 and 2022 respectively, with the unemployment rate falling to pre-
crisis  values  (6.6%)  in  2022.  The  proportion  of  the  population  at-risk-of  poverty  or  social 
exclusion declined pre-COVID-19, albeit remaining above the EU average (23.3% vs EU27 
20.9% in 2019).   

After  the  third  consecutive  year  of  surplus  in  2019,  the  general  government  balance 
deteriorated  sharply  in  2020  with  the  debt  ratio  increasing  significantly.  Driven  by 
automatic stabilisers and measures on both  the revenue and  expenditure side of the budget, 

3   Findings  based  on  the  Euromod  model:  see  Christl,  M,  De  Poli,  S.,  Figari,  F.,  Hufkens,  T.,  Leventi,  C., 
Papini,  A. and Tumino,  A. (2021) “The cushioning effect of fiscal policy  in the EU during the COVID-19 
pandemic”, JRC Working Papers on Taxation and Structural Reforms, 02/2021 (forthcoming); and Almeida, 
V., Barrios, S., Christl, M., De Poli, S., Tumino, A., Van der Wielen, W. (2020): ‘Households´ income and 
the cushioning effect of fiscal policy measures during the Great Lockdown’, JRC Working Paper on Taxation 
and Structural Reforms, 06/2020.. 

6 

 
 
                                                           
the general government balance deteriorated to a deficit of 7.4% of GDP in 2020. The sharp 
economic  contraction  impacted  revenues,  while  measures  aimed  at  preserving  employment 
and  businesses  during  the  pandemic  significantly  increased  expenditure.  The  general 
government deficit is expected at 4.6% in 2021 and 3.2% of GDP in 2022. After declining for 
five years, the debt ratio is set to spike in 2020 at 88.7% of GDP, but should resume declining 
in 2021 and 2022. Overall, the debt sustainability analysis on the basis of the Commission’s 
spring forecast indicates medium risks over the medium term. 

Croatia’s  economy  remains  burdened  by  imbalances  mainly  related  to  high  levels  of 
private,  public  and  external  debt  in  the  context  of  low  potential  growth.  Private  sector 
debt  increased in  2020 due to  the strong contraction  in  output. The positive contribution  of 
net  lending  was  smaller  than  in  previous  years  as  companies  and  households  focused  on 
refinancing  existing  loans  and  delayed  investment  and  spending  decisions.  In  2021,  private 
sector  debt  is  expected  to  return  to  a  downward  trajectory,  supported  by  the  economic 
recovery.  An  increase  in  corporate  insolvencies  after  the  ending  of  government  support 
measures might pose risks. Similarly, the public debt ratio reached its highest level on record 
(88.7% of GDP) in 2020, but it should return to a declining trend in 2021 as economic output 
recovers. The negative net international investment position (NIIP) worsened slightly to -52% 
of  GDP  in  2020,  but  should  resume  its  pre-pandemic  upward  trajectory  already  in  2021, 
reaching  the  prudential  benchmark  in  2022.  House  prices  continued  their  upward  trend  in 
2020  rising  by  7.4%,  which  continues  to  put  pressure  on  housing  affordability.  Croatia’s 
external liabilities remain high but their increase was mitigated by a sizeable inflow from the 
capital  account.  Structural  weaknesses  in  the  Croatian  economy  weigh  on  its  economic 
recovery and hinder its long-term sustainable growth.  

The  Croatian  banking  sector  remains  well  capitalised  and  profitable,  although  the 
decline in non-performing loans was halted by the pandemic. With a return on equity of 
5.7% in 2020-Q2 (1.1% in the EU), profitability dropped from the previous year (11.3% in 
2019-Q2).  However,  Croatian  banks  remain  very  well  capitalised  (with  a  CET1  ratio  of 
22.1%  compared  with  15.4%  in  the  EU).  The  share  of  non-performing  loans  (NPLs) 
increased slightly to 5.4% in the third quarter of 2020, but is still much lower than in previous 
years  (13.6%  in  2014)  and  provisioning  is  high  with  a  coverage  ratio  above  66%.  The 
banking  system  improved  its  asset  quality  in  recent  years  partly  as  a  result  of  improved 
supervision.  As  of  October  2020,  the  ECB  exercises  direct  supervision  over  significant 
institutions  in  Croatia.  The  ECB’s  comprehensive  assessment,  which  was  finalised  in  June 
2020, resulted in no additional capital needs. 

Table 1. Comparison of macroeconomic developments and forecast 

2019 

2020 

2021 

2022 

2023 

2024 

2025 

2026 

COM  COM  RRP 

COM  RRP  COM  RRP  RRP  RRP  RRP  RRP 

2.9 

-8.0 

-8.0 

5.0 

5.2 

6.1 

6.6 

4.1 

3.4 

2.7 

2.2 

3.1 

-1.2 

-1.2 

0.6 

2.3 

1.4 

1.6 

1.6 

1.4 

1.1 

Real GDP  
(% change)  
Employment   
(% change)  

7 

 
 
 
 
 
Unemployment rate 
(%) 
HICP inflation  
(% change)4 
General government 
balance (% of GDP) 
Gross debt ratio  
(% of GDP)   

6.6 

7.5 

7.5 

7.2 

7.0 

6.6 

6.5 

6.0 

5.7 

0.8 

0.0 

0.2 

1.3 

2.0 

1.3 

1.7 

2.0 

2.3 

0.3 

-7.4 

-7.4 

-4.6 

-3.8 

-3.2 

-2.6 

-1.9 

-1.5 

88.7 
Source: Commission Spring Forecast 2021 (COM); Recovery and resilience plan (RRP) 

72.8 

86.6 

88.7 

85.6 

82.9 

82.5 

79.5 

76.8 

The authorities’ scenario  underpinning the RRP is  based on plausible macroeconomic 
assumptions.  Compared  to  the  Commission’s  spring  forecast,  the  scenario  in  the  recovery 
and  resilience  plan  (which  is  the  same  as  the  scenario  from  the  2021  Convergence 
Programme) projects somewhat stronger growth in 2021, and particularly 2022. This is most 
notably  a  result  of  the  authorities’  higher  projections  of  household  consumption  and 
investment, while the Commission’s forecast is  slightly more optimistic on the contribution 
of  exports.  Similarly,  the  reaction  of  the  labour  market  is  faster  and  stronger  in  the  plan’s 
scenario.  The  authorities’  scenario  also  projects  a  stronger  decrease  in  the  general 
government deficit. The differences are most pronounced on the revenue side, which the plan 
projects  to  rebound  very  strongly.  Overall,  the  differences  between  the  recovery  and 
resilience  plan  and  the  Commission  scenarios  are  not  extensive,  particularly  in  a  context 
where both the macroeconomic and fiscal outlook continue to be affected by high uncertainty 
related to the COVID-19 pandemic and its economic consequences. 

2.2. Challenges  related  to  sustainable  growth,  cohesion,  resilience  and  policies  for 

the next generation   

Structural  weaknesses  in  the  Croatian  economy  weigh  on  the  economic  recovery  and 
hinder its long-term sustainable growth. Total factor productivity (TFP) lags behind that of 
Croatia’s  peers  and  the  EU  average  due  to  lower  intrinsic  productivity  levels  in  Croatian 
firms (Bauer et al. 2020)5. Structural rigidities that reduce productivity, hamper growth and 
the  pace  of  recovery  include  an  inefficient  public  administration,  a  cumbersome  business 
environment, a large presence of the state in the economy, an inefficient allocation of labour 
resources and skills shortages, and low investment in R&D and digital infrastructures, as well 
as  alow  number  of  high-growth  enterprises  (HGEs)  that  account  for  a  low  share  of 
employment (Flachenecker et al, 2020)6.  

Croatia’s business environment is burdensome, complex and restrictive. Businesses are 
held  back  by  large  regulatory  and  administrative  burdens,  such  as  para-fiscal  charges  and 

4 The Croatian authorities’ projections of inflation are based on the Consumer Price Index (CPI), rather than the 
Harmonised Index of Consumer Prices (HICP). 
5 Bauer, P., Fedotenkov, I., Genty, A., Hallak, I., Harasztosi, P., Martinez Turegano, D., Nguyen, D., Preziosi, 
N.,  Rincon-Aznar,  A.  and  Sanchez  Martinez,  M.,  (2020),  Productivity  in  Europe:  Trends  and  drivers  in  a 
service-based economy, JRC. Annex 8 – Factsheet Croatia. 
6  Flachenecker,  F.,  Gavigan,  J.,  Goenaga  Beldarrain,  X.,  Pasi,  G.,  Preziosi,  N.,  Stamenov,  B.  and  Testa,  G. 
(2020), High Growth Enterprises: demographics, finance and policy measures, Annex 4.1 to the JRC Technical 
Report. EUR 30077 EN. 

8 

 
 
 
 
 
 
 
 
 
 
                                                           
heavy  procedures  to  start  a  business.  Despite  the  gradual  removal  of  some  restrictive 
regulations for products and the services markets over recent years, services and professions 
remain  highly  regulated,  hampering  firms’  competitiveness  and  productivity.  Small  firms 
recorded  a  more  rapid  catch-up  in  productivity  and  business  dynamism  due  to  increased 
exports after 2014 (Bauer et al. 2020). To ensure sufficient resilience capacity for companies, 
efforts to relieve costly administrative burdens on businesses need to be sped up.   

The efficiency of the public administration in Croatia ranks below the EU average. Low 
capacity to  design, implement and evaluate policies and projects  hampers effectiveness  and 
speed. Initiatives to strengthen the public administration’s capacity to design and coordinate 
the implementation of policies at the central level, coupled with the reform of the civil service 
are key to ensure the absorption of EU Funds, including the Recovery and Resilience Facility.   

High fragmentation of the public administration, including across the territory, leads to 
inconsistencies  and  an  imbalance  between  responsibilities  and  resources  at  local  level. 
The  wage-setting  framework  lacks  consistency  and  transparency  across  the  public 
administration  and  the  civil  service.  This  affects  equality  of  treatment  and  hinders  central 
control  over  the  public  wage  bill.  Ongoing  work  on  setting  up  a  standardised  wage-setting 
framework across the public administration and public services is essential.  

Efforts  to  strengthen  the  judiciary  system  and  the  framework  to  prevent,  detect  and 
correct corruption are key to achieving an efficient, accountable and transparent allocation 
and  distribution  of  funds  and  resources,  particularly  at  local  level,  and  ensure  available 
resources effectively support the recovery in the aftermath of the COVID-19 crisis. The need 
to enhance oversight mechanisms for local officials and appointees to local public companies 
remains, as does the need to ensure the prevention of conflicts of interest. There is scope for 
further strengthening Croatia's judiciary by further reducing delays in court decisions and by 
extending  electronic  communication.  More  intensive  continuous  training  for  judges  in 
emerging areas of law should also  result in  greater court practice  consistency.  Initiatives to 
facilitate  and  ensure  the  use  of  out-of-court  methods  of  dispute  resolution  also  need  to  be 
followed through.  

Croatia’s  research and development intensity remains low. Micro companies and SMEs 
continue  to  be  weak  innovators  as  government  support  programmes  are  heavily  skewed 
towards  large  companies.  Academia  and  business  interaction  is  limited,  while  fragmented 
financing programmes fail to raise firms’ innovation capacity or adequately direct resources 
to  micro-enterprises,  spin-offs  and  start-ups,  while  equity  markets  for  innovators  are 
underdeveloped.  Croatia  would  benefit  from  better  consolidating  its  public  science  base, 
investing  more  in  research  and  innovation  (R&I)  and  embedding  it  in  its  business 
environment to fully leverage R&I as a key driver for growth.   

Unaddressed  labour  market  challenges  in  Croatia  have  a  negative  effect  on  economic 
growth  and  resilience.  Challenges  include  low  labour  market  participation,  pronounced 
labour  shortages,  high  regional  disparities  in  employment  and  social  outcomes,  and  high 
incidence of undeclared work. Employment and activity rates in Croatia are among the lowest 
in  the  EU.  A  comprehensive  strategy  targeted  at  the  inactive  population  could  increase  the 
labour contribution to growth. Despite high unemployment, labour shortages persist in some 
sectors  of  the  economy  (industry,  construction,  services).  This  is  mainly  because  of  skills 
gaps,  but  factors  such  as  ageing,  emigration  and  low  job  quality  also  play  a  role.  A  high 

9 

 
 
incidence of undeclared work is caused by various factors (e.g. low quality of job offers, high 
share of precarious employment, etc.), which all need addressing if formal employment and 
economic  growth  are  to  be  promoted.  The  acquisition  of  adequate  skills,  including  digital 
skills,  during  initial  education  and  training  and  later  reskilling  and  upskilling,  could  raise 
productivity, close skills gaps and foster declared employment. 

The  coverage  and  poverty-reduction  capacity  of  social  transfers,  including  minimum 
income  schemes,  is  low.  Croatia’s  fragmented  social  protection  system  is  ineffective  in 
easing  labour  market  and  social  disparities,  resulting  in  levels  of  poverty  above  the  EU 
average.  Unemployment  benefits  do  not  provide  an  adequate  safety  net  for  dismissed 
workers, as both the coverage and adequacy are low. Participation of older workers (55-64) in 
the  labour  market  is  feeble,  thus  contributing  to  low  pension  adequacy  and  higher  risk  of 
poverty  or  social  exclusion  in  old  age.  Long-term  care  is  underdeveloped,  and  as  a  result 
requires a strategy to ensure quality service and reduce out-of-pocket costs. Organisation of 
care at the community level as an alternative to institutionally provided care is progressing, 
but very slowly. Negative demographic trends further amplify the existing challenges in the 
labour market and the social protection system.   

Croatia  is  facing  challenges  at  all  levels  of  education,  which  have  been  aggravated  by 
COVID-19  and  the  earthquakes.  Croatia’s  early  childhood  education  and  care  (ECEC) 
participation remains one of the lowest in the EU. Challenges to increasing the participation 
rate  include  a  lack  of  places  in  ECEC  and  a  shortage  of  ECEC  teachers,  decentralised 
governance,  regional  differences,  and  costs.  The  performance  of  pupils  in  basic  skills  as 
measured by PISA is below the EU average; the shares of underperformers in maths (31.2%; 
EU-27  22.9%)  and  science  (25.4%;  EU-27  22.3%)  are  among  the  highest  in  the  EU.  The 
COVID-19 crisis further aggravated the situation, mainly  through the learning loss suffered 
by students, which can have long-term negative consequences on human capital, productivity 
growth, innovation and employment, as well as future earnings (Di Pietro et al, 2020) 7.  

Measures  are  being  taken  to  increase  the  quality  of  education  through  curricular 
reform  and  an  e-Schools  project,  which  has  helped  develop  digital  education. 
Nevertheless,  educational  outcomes  are  negatively  affected  by  the  low  annual  instruction 
time  in  primary  and  lower  secondary  education,  short  compulsory  education  and  schools 
working  in  shifts  due  to  infrastructure  shortages  (which  have  been  exacerbated  by  the 
earthquakes in 2020). In addition, tertiary education attainment is one of the lowest in the EU 
(33.1%; EU-27 40.3%), below the national 2020 target of 35%, while the number of students 
is declining. Participation in adult education is also very low (3.5% vs EU average of 10.8% 
in 2019). The educational offer of advanced digital skills in universities is also very limited 
(Righi et al. 2020)8, with a large demand that remains unmet (Gomez Losada et al. 2020)9. 

7 Di Pietro G., Biagi F., Costa P., Karpiński Z., Mazza J. (2020) The likely impact of Covid-19 on education: 
Reflections based on the existing literature and recent international datasets, JRC Technical Report, JRC121071 
8 Righi, R., López-Cobo, M., Alaveras, G., Samoili, S., Cardona, M.., Vázquez-Prada Baillet, M., Ziemba, L.W., 
and De Prato, G. (2020), Academic offer of advanced digital skills in 2019-20. International comparison. Focus 
on  Artificial  Intelligence,  High  Performance  Computing,  Cybersecurity  and  Data  Science,  JRC  Technical 
Report. 

10 

 
 
                                                           
large  economic  disparities  (particularly  at  county 

Regional disparities (at county level) in Croatia are significant, and these differences are 
particularly pronounced between Zagreb and the rest of the country. Taking account of 
the 
level)  when  designing  and 
implementing the plan’s measures is crucial to pursuing inclusive and uniform growth. Such 
disparities  could  be  better  addressed  through  more  homogenous,  transparent  and  effective 
public  administrations  across 
local 
the  country.  Reducing 
administrations’  handling  of  resources  and  strengthening  the  framework  on  corruption 
prevention,  detection  and  correction  at  local  level  would  also  help  increase  absorption 
capacity and ensure a more efficient and even use of EU funds.   

fragmentation  of 

the 

Accumulation  of  debts  and  geographical  obstacles  create  challenges  for  the  Croatian 
health system. A lack of coordination between the hospital managing authorities, particularly 
at  county  level,  and  at  government  level  underlines  the  inefficiencies  of  the  system. 
Challenges stemming from the outbreak of COVID-19, coupled with the devastation caused 
by  earthquakes  in  March  and  December  2020,  put  an  extraordinary  strain  on  the  health 
system. The uneven distribution of health resources exacerbates these challenges.   

2.3. Challenges related to the green and digital transition  

Green dimension 

The recovery and resilience plan should contribute to the green transition and at least 
37%  of  the  invested  amount  needs  to  constitute  climate  related  expenditure. The 
measures in the plan will contribute to achieving the 2030 energy and climate targets (as set 
out in the National Energy and Climate Plan) as well as to a climate-neutral economy of the 
Union  by  2050.  They  should  also  contribute  to  meeting  environmental  targets  for  waste, 
water, pollution control, sustainable mobility, biodiversity protection and restoration, marine 
and  water  resources,  and  support  the  transition  to  sustainable  food  systems  as  well  as  to  a 
circular economy, while ensuring that nobody is left behind.  

Climate and energy policies 

Croatia  is  among  the  EU  Member  States  with  the  lowest  greenhouse  gas  emissions 
(GHG) per capita, though GHG intensity remains higher than the EU average despite 
its  improvement10.  Between  1990  and  2019,  Croatia’s  total  GHG  emissions  fell  by  22%, 
slightly less than the EU total, while the GDP per capita increased by 22%.  

Two NUT3 level regions stand out in terms of their GHG emissions: Istria County (coal 
power plant Plomin and cement industry) and Sisak  – Moslavina County (oil refinery 

9 Gómez Losada, Á., López-Cobo, M., Samoili, S., Alaveras, G., Vázquez-Prada Baillet, M., Cardona,M., Righi, 
R.,  Ziemba,  L.,  and  De  Prato,  G.  (2020)  Estimation  of  supply  and  demand  of  tertiary  education  places  in 
advanced  digital  profiles  in  the  EU.  Focus  on  Artificial  Intelligence,  High  Performance  Computing, 
Cybersecurity and Data Science, JRC. 

10 GHG intensity is the ratio between GHG emissions and GDP. 

11 

 
 
                                                                                                                                                                                     
 
 
and fertiliser production). The latter is among the most deprived regions in Croatia and was 
struck by a devastating earthquake in December 2020.  

Croatia  is  on  course  to  surpass  the  2030  target  for  greenhouse  gas  reduction,  if  the 
policies  set  out  in  the  National  Energy  and  Climate  Plan  are  implemented.  Croatia’s 
binding 2030 target  for  greenhouse  gas emissions not  covered by the EU emissions trading 
system (i.e. non-ETS), is to achieve a 7% reduction compared to 2005 levels. Croatia has also 
set the indicative target to reduce the emissions in ETS sectors by at least 43% compared to 
2005 levels. In June 2021, Croatia adopted its long-term strategy for decarbonisation, setting 
a goal of 80% emission reductions by 2050, compared to the 1990 baseline.  

Croatia’s  National  Energy  and  Climate  Plan  (NECP)  estimates  investment  needs  to 
around  EUR  19  billion  for  2021-2030  period,  corresponding  to  3.5%  of  GDP.  The 
majority of investments are planned for energy efficiency in the building sector (construction 
and renovation), and electricity production. The updated NECP submitted in 2021 includes a 
higher target for the share of renewables in transport, which should positively contribute to 
the decarbonisation of the transport sector. 

The transport sector continues to be the largest contributor to GHG emissions, followed 
by  energy  supply.  Transport  emissions  account  for  more  than  25%  of  the  Croatian 
emissions, and have been sharply increasing in recent years. The Croatian railway network is 
underdeveloped and substantial investments would be needed to make it a credible alternative 
to  road  transport,  both  for  cargo  and  passenger  transport.  Deployment  of  infrastructure  for 
alternative fuels  on roads (as well as  air, maritime and inland waterway transport), coupled 
with the promotion of zero-emission vehicles, could help reduce greenhouse gas emissions.  

Climate change is  likely to pose major sustainability challenges to Croatia,  particularly 
given its growing vulnerability to climate risks, especially floods and forest fires.   

Air quality in Croatia is giving cause for concern. In 2018, about 5,100 premature deaths 
were  attributable  to  fine  particulate  matter  concentrations,  far  above  the  EU  average. 
Accelerating  the  reduction  of  particulate  matter  emissions  and  concentration  is  key,  in 
particular in agglomerations Zagreb and Osijek, and the area of Industrijska zona (from Sisak 
to Slavonski Brod). 

Renewables and energy efficiency  

Croatia  has  already  exceeded  its  2020  target  for  renewable  energy,  but  there  is 
untapped  potential  to  exploit  wind  and  solar  power.  In  2019,  the  share  of  renewable 
energy was 28.5%, notably thanks to Croatia's legacy of hydropower industry. Still, Croatia’s 
contribution  to  the  EUs  2030  renewable  energy  target  is  set  at  36.4%,  well  above  the  32% 
recommended  by  the  Commission11.  Croatia  has  untapped  potential  to  further  develop 
renewable energy sources, especially in its coastal and island regions. The current regulatory 
framework  is  constraining  the  development  of  renewable  energy  sources.  The  share  of 

11 In line with the formula in Annex II of the Governance Regulation, the Commission issued recommendations 
with regards to Member States' ambitions on renewables. 

12 

 
 
                                                           
renewable energy sources in the transport sector (5.9 % in 2019) is one of the lowest among 
EU  Member  States  and  Croatia  did  not  meet  the  2020  target  of  10  %.  Table  2  gives  an 
overview of Croatia’s objectives, targets and contributions under Regulation (EU) 2018/1999 
of the European Parliament and of the Council of 11 December 2018 on the  Governance of 
the Energy Union and Climate Action. 

In Croatia, the residential sector accounts for over a third of total energy consumption, 
well above the EU average. Croatia has great potential to increase its energy efficiency, in 
particular  in  the  building  sector,  as  well  as  in  district  heating  and  cooling.  The  national 
contribution to the energy efficiency target specified in Croatia’s NECP is low, at 8.23 Mtoe 
for  primary  energy  and  6.85  Mtoe  for  final  energy  consumption.  Croatia  has  significantly 
increased its plans for annual renovation rate, from 0.7% to 3% in 2030, aiming for energy 
renovation investments in multi-dwelling buildings, family homes and public buildings12.  

12 This is a significant improvement compared to past and current trends: see Castellazzi, L., Zangheri, P., Paci, 
D.,  Economidou,  M.,  Labanca,  N.,  Ribeiro  Serrenho,  T.,  Zancanella,  P.  and  Broc,  J.,  Assessment  of  second 
long-term  renovation  strategies  under  the  Energy  Efficiency  Directive,  2019,  JRC114200.  Increasing  to  3% 
renovation  rate  is  a  necessary  step  to  achieve  the  objectives  of  decarbonisation  of  the  building  stock,  see 
Zangheri, P., Armani, R., Kakoulaki, G., Bavetta, M., Martirano, G., Pignatelli, F. and Baranzelli, C., Building 
energy renovation for decarbonisation and Covid-19 recovery, 2020, JRC122143. 

13 

 
 
 
 
                                                           
Table 2. Overview of Croatia’s objectives, targets and contributions under Reg. 2018/1999 

National targets and contributions  

Binding target for greenhouse gas 
emissions compared to 2005 under the 
Effort Sharing Regulation (%) 

National target/contribution for 
renewable energy: Share of energy from 
renewable sources in gross final 
consumption of 
energy (%) 

Latest 
available 
data 

2020 

2030 

Assessment of 2030 
ambition level 

-1% 

11% 

-7% 

28.5% 

20% 

36.4% 

As in the Effort 
Sharing Regulation 

Sufficiently 
ambitious (32% is 
the result based on 
the Renewable 
Energy Sources 
formula in the 
Regulation (EU) 
2018/1999)  

National contribution for energy efficiency: 

Primary energy consumption (Mtoe) 

Final energy consumption (Mtoe) 

8.2 

6.9 

10.7 

8.23 

7.0 

6.85 

Low 

Low 

Level of electricity interconnectivity (%) 

30% 

N.A. 

15% 

N.A. 

Further steps need to  be taken to ensure a stable legislative framework for energy, as 
well as a functioning and competitive electricity market. Croatia is yet to fully implement 
EU  legislation  on  electricity  and  gas  markets,  including  certifying  the  transmission  system 
operator  (TSO)  for  gas.  EU  internal  energy  market  rules  require  that  TSOs  are  fully 
unbundled from generation/production and supply of electricity and gas, thus creating a level 
playing field for a competitive energy market. National regulatory authorities are required to 
certify that TSOs comply with these unbundling rules. However, the procedure for certifying 
the Croatian gas TSO, Plinacro, has been pending since 2013. 

The investment gap in waste and the circular economy remains significant. Only 25% of 
municipal waste was  recycled in  2018, far below the EU average of 47%, while landfilling 
and  treatment  of  waste  before  landfilling  remains  problematic.  Investment  and  reforms  are 
needed to modernise and upgrade the existing recycling and waste treatment infrastructure, to 
support  systems  of  separate  collection,  composting  and  sorting  plans,  and  to  accelerate  the 
transition to a more circular and resource-efficient economy. 

The water supply network is incomplete and faces a high leakage rate (44%), while the 
sewerage  system  is  underdeveloped.  Significant  investment  needs  still  exist  in  Croatia  to 
accelerate  compliance  with  the  Water  Framework  Directive,  the  Urban  Waste  Water 
Directive  and  the  Floods  Directive.  Water  quality  is  also  a  matter  of  concern:  diffuse 
pollution from agriculture is the most significant pressure on water bodies, especially in the 
continental part of the country lying in the Danube River Basin. 

Croatia is among the countries with the richest biodiversity in Europe. Further efforts are 
needed  to  maintain  and  restore  the  good  condition  of  ecosystems  in  light  of  the  increased 
ambition of the EU Biodiversity Strategy for 2030, and the fact that almost 50% of protected 
habitats and species in Croatia are in an unfavourable conservation status. Investment needs 

14 

 
 
 
 
 
 
 
 
 
 
 
 
are estimated at EUR 1.25 billion for 2021-2027 to improve the management of Natura 2000 
sites, protection of species, and restoration of habitats, including those important for climate 
change mitigation and adaptation. 

Digital dimension 

The recovery and resilience plan should contribute to the digital transition and at least 
20% of the financial allocation needs to contribute to digital objectives. The measures in 
the plan should, inter alia, contribute to the digital transformation of the economic and social 
sector  (including  public  administration,  digital  public  services,  and  the  justice  and  health 
systems).  The  objective  of  the  measures  in  the  plan  should  be  to  improve  not  only  the 
competitiveness,  but  also  the  resilience,  efficiency  and  security  of  companies  and  public 
actors, while ensuring inclusiveness.  

Croatia  ranks  20th  in  the  European  Commission’s  2020  Digital  Economy  and  Society 
Index (DESI). Despite continuous progress over the past few years, Croatia still lags in most 
digital areas compared with the EU average.  

Note: EU aggregate corresponds to EU28, based on 2020 DESI report. 

Croatia ranks 25th in connectivity, despite steady, albeit slow, progress in recent years. 
On  fast  next  generation  access  (NGA)  broadband  coverage,  Croatia,  at  86%,  is  closing  the 
gap  with  the  EU  average  of  87%.  Croatia  also  significantly  improved  very-high  capacity 
network (VHCN) coverage from 23% in 2018 to 47% in 2020, thanks to both an increase in 
fibre to  the premises  (FTTP) coverage and  a partial upgrade of its cable networks enabling 
gigabit  speeds.  Although  the  total  coverage  of  FTTP  increased  to  36%  (up  from  28%  in 
2019),  access  to  fibre  in  rural  areas  stood  at  only  7%  in  2020.  Deployment  of  fixed  and 
mobile  infrastructure  is  held  back  in  some  areas  due  to  high  fees  in  rights-of-way  and 
difficult  permit  granting  procedures,  despite  recent  court  rulings  in  favour  of  infrastructure 
deployment.   

Croatia lags behind in terms of overall up-take of fixed broadband.  Broadband up-take 
currently  stands  at  73%  of  households  against  the  EU  average  of  77%.  Take-up  of  mobile 
broadband subscriptions remained stable at 71%, the same as the EU average. On 100 Mbps 
and  above  broadband  take-up,  Croatia  continues  to  lag  behind  significantly,  with  only  9%, 
compared with an EU average of 34%. Croatia ranks 21st on the broadband price index, with 
prices slightly higher that  the EU average prices. The Croatian national  plan for broadband 
development  for  2021-2027  went  through  public  consultation  with  its  adoption  expected  in 
2021. 

15 

 
 
 
Investment  in  5G  connectivity  is  lagging  with  no  progress  in  terms  of  5G  readiness. 
Lack  of  progress  in  5G  prevents  Croatia  from  taking  full  advantage  of  a  digitalised 
economy and society, both for households and businesses. Croatia has not assigned any of 
the  spectrum  harmonised  at  EU  level  for  5G  mobile  networks,  partly  due  to  cross-border 
interference  issues  with  Italy,  and  still  lacks  a  dedicated  comprehensive  strategy  for  5G 
deployment. However, the Croatian Regulatory Authority for Network Industries (HAKOM) 
has allowed the use of the existing 2100 MHz band under technical conditions that can also 
enable roll-out of 5G in that band. Such use has been notified in 231 locations across Croatia. 
Currently, 5G networks are available in areas of Zagreb, Rijeka, Split, Osijek, Samobor and 
Sveta Nedelja.  

The share of Croatian school students equipped with high-speed internet access above 
100 Mbps is lower than the EU average. This is far from the EU 2025 objectives to have all 
schools connected to Gigabit connectivity by 2025.  

Croatian  businesses  perform  above  EU  average  in  terms  of  cloud  uptake  (29%  in 
Croatia  vs.  26%  EU  average).  Continuously  improved  access  and  use  of  ultra-secure  and 
energy-efficient  industrial  cloud  and  edge  capacities  has  the  potential  to  further  support 
business  competitiveness  and  contribute  to  the  European  strategy  for  data.  Croatia  has 
committed to investing in shaping the next generation of cloud infrastructure and services for 
businesses  and  public  administration  as  well  as  in  creating  synergies  among  national  cloud 
initiatives. The Croatian Shared Services Centre enables Croatia to benefit from government 
cloud  solutions,  with  the  potential  for  interconnection  with  other  public  entities’  clouds 
within the country, and with other EU Member States for the purposes of service enablement 
or  efficiency  gains.  Croatia’s  data  centres  display  potential  for  upgrades  in  terms  of 
environmental sustainability, energy efficiency and security. 

Levels of basic digital skills in Croatia remain low compared to the EU average, while 
18% of Croatians have never used the internet. Only 53% of people between 16 and 74 
years have at least basic digital skills. In contrast, Croatia has the highest share in Europe of 
individuals aged 16 to 24 with at least basic digital skills (97%). Nevertheless, the skills that 
students  acquire  often  do  not  fully  correspond  to  the  labour  market  needs,  and  their 
employment rate is below the EU average.  

Furthermore, most businesses report difficulties filling vacancies for ICT specialists. In 
2020, ICT specialists accounted for a lower percentage of the workforce in Croatia than the 
EU  average  (3.7%  compared  to  4.3%  in  the  EU).  Efforts  are  being  made  to  increase  the 
number  of  STEM  students,  while  the  number  of  ICT  graduates  and  ICT  specialists  is 
increasing. Skills mismatches in the workforce are significant, with a lack of digital experts 
and  ICT  graduates.  Conversely,  Croatian  enterprises  invest  in  ICT  trainings  for  their 
employees and, in 2020, 23% of enterprises offered specialised ICT training. 

Croatian  firms  are  taking  increasing  advantage  of  the  opportunities  offered  by  online 
commerce,  with  30%  of  SMEs  selling  online,  10%  selling  cross  borders  to  other  EU 
countries,  29%  using  cloud  solutions  and  21%  using  AI  solutions.  Every  fifth  (22%) 
enterprise  actively  uses  social  media,  while  one  in  four  (26%)  share  information 
electronically.  e-Invoices  have  become  very  popular  in  Croatia  with  a  record  increase  of 
enterprises using e-invoices, from 12% in 2018 to 43% in 2020. The uptake of big data is also 
growing  and  it  reached  the  EU  average  of  14%  of  enterprises.  The  shift  to  digital  business 

16 

 
 
models  has  proven  to  be  an  important  survival  mechanism  across  the  economy  during  the 
COVID  19  restrictions.  However,  the  digitalisation  of  SMEs  and  the  uptake  of  advanced 
technologies  are  too  low  to  enable  businesses  to  expand  their  digital  presence  e.g.  by 
participating in e-commerce platforms, reducing operating costs (e.g. through more efficient 
data processing) and enabling them to adopt and develop innovative digital solutions.  

Croatia’s level of digital public service provision is below the EU average, according the 
2020 DESI and the 2020 e-Government Benchmark. The availability of e-government for 
business, while on the rise, is also below the EU average, with 52% of internet users using e-
government  services  (compared  to  the  EU  average  of  64%).  In  the  indicator  measuring  the 
amount of data that is pre-filled in public service online forms, Croatia scores far below the 
EU average (43 compared to 63). On the availability of digital online services, Croatia scores 
below  the  EU  average,  both  on  digital  services  for  citizens  (score  of  60  compared  to  EU 
average of 75) and for businesses (score of 73 compared to EU average of 84). In contrast, on 
open data, Croatia performs well.  Online public service supply is lagging  behind, as shown 
by  available  indicators  measuring  the  user  centricity,  transparency  and  existence  of  key 
enablers for providing digital public services. The pandemic has demonstrated the importance 
of  providing  digital  public  services  to  citizens.  This  calls  for  boosting  user-centricity  of 
digital public services and digital skills to enable a greater take-up of digital public services 
by the general public.  

Croatia  ranks  25th  in  the  European  Commission’s  2020  European  Index  of  Digital 
Entrepreneurship  Systems (EIDES)13,  a  composite  measure  that  reflects  the  development 
of  the  digital  entrepreneurial  ecosystem.  Croatia  is  part  of  the  laggards  group,  with  a  2020 
EIDES score of 30.8 that stands well below the 48.4 average for EU27 and UK. Although the 
country’s EIDES score increased by 5,7 index points during 2018-2020, it was only enough 
to remain on the 25th position (Autio et al., 2020)14. 

Some  steps  have  been  taken  to  provide  digital  access  to  the  public  administration. 
During 2020, 24 new e-services were integrated in the e-Citizens system, which is currently 
used by over 1.25 million citizens. It was redesigned in April 2021 and offers a total of 89 e-
services. During 2020-2021 the platform for electronic payment  of fees  and/or charges was 
established. The system also enables card payment of administrative fees or charges. It lays 
the  ground  for  further  development  of  more  complex  electronic  services  in  both  e-Citizens 
and  e-Business  systems.  Croatia  completed  the  notification  of  its  eID  scheme  (National 
Identification and Authentication System) in 2018. The eID scheme, which meets the “high” 
level  of  assurance  under  eIDAS  (the  EU  regulation  on  electronic  identification  and  trust 
services  for  electronic  transactions  –  No  910/2014),  allows  Croatian  personal  identity  card 
(eOI) holders to access a wide range of cross-border public services.  

Digitalisation of social and health systems is being shaped. Croatia has also transposed the 
Web Accessibility Directive into law, which give people with disabilities better access to the 

13 European Index of Digital Entrepreneurship Systems | EU Science Hub (europa.eu) 
14  Autio,  E.,  Szerb,  L.,  Komlósi,  E.and  Tiszberger,  M.  (2020),  EIDES  2020-The  European  Index  of  Digital 
Entrepreneurship Systems, Nepelski, D. (editor), JRC120727. 

17 

 
 
                                                           
websites and mobile apps of public services. The Croatian Ministry of Health co-developed 
together  with  the  key  stakeholders  an  eHealth  Strategy  and  an  Action  plan.  These  set  a 
direction for an eHealth Strategy through a common vision and outline the main action lines, 
timeline, responsible parties and resources required to implement the recommendations. The 
eHealth  Strategy  will  be  integrated  into  the  future  National  Health  Care  Strategy  and  is 
expected  to  improve  access  to  healthcare,  including  long-term  care,  in  remote  areas  and 
islands  at  risk  of  exclusion.  The  launch  of  a  national  mobile  application  to  schedule 
appointments and the consolidation of health information infrastructure with the creation of a 
one-stop shop, will help improve access to healthcare. 

Croatia  is  committed  to  promoting  and  investing  in  digital  technologies  through  EU-
coordinated programmes. It is a member of the EuroHPC Joint Undertaking and signed the 
Declaration  on  cooperation  on  Artificial  Intelligence  (AI)  in  2018.  In  2019,  Croatia  also 
joined the European Blockchain Partnership and it has signed the Declaration on advancing 
the digitisation of cultural heritage. In 2020, 62% of Croatian SMEs had at least a basic level 
of digital intensity, which is slightly above the EU average of 60%. As for the use of ICT for 
environmental  sustainability,  75%  of  Croatian  enterprises  record  medium/high  intensity  of 
green action through ICT, which is significantly higher than the EU average of 66%. 

Box 1: Progress towards the Sustainable Development Goals 

Sustainable Development Goals and the four dimensions underpinning the Annual 
Sustainable Growth Strategy

The  objectives  of  the  Sustainable  Development  Goals  are  integrated  in  the  European 
Semester since the 2020 cycle. This provides a strong commitment towards sustainability in 

18 

 
 
 
 
coordination of economic and employment policies in the EU. This section outlines Croatia’s 
performance  with  respect  to  the  SDGs  with  particular  relevance  for  the  four  dimensions 
underpinning the 2021 Annual Sustainable Growth Strategy and of relevance to the recovery 
and  resilience  plans  (green  transition,  fairness,  digital  transition  and  productivity,  and 
macroeconomic  stability),  indicating  possible  areas  where  investments  and  reforms  in  line 
with the objectives of the Facility could further accelerate the progress on the SDGs. 

Green Transition 

Croatia’s  performance  in  terms  of  the  SDGs  related  to  the  green  transition  is  mixed.  For 
instance, it ranks below the EU average on greenhouse gas emissions (SDG 13) in 2018 with 
an index of 75.2 compared to the EU average of 79.3. The share of renewable energy in gross 
final energy consumption (SDG 7) is 28.5% in 2019, well above the EU average of 18.9%. 
Efforts  are  still  needed  to  reduce  air  pollution  (SDG  11)  exposure  by  particulate  matter 
(19µg/m3 in 2017, compared to an average of 14.9 in the EU). Investment to further promote 
the circular economy (SDG 12) would help raise Croatia’s circular material use rate, which 
stands at 5.1% and remains far below the EU average (11.2%). 

Fairness 

Overall, Croatia performs well and is progressing in terms of the SDGs related to fairness. It 
is reducing the gap with the EU average across several indicators relating to the goal of no 
poverty (SDG 1), for example concerning the percentage of population at risk of poverty or 
social exclusion, at risk of income poverty after social transfers, severely materially deprived, 
and  population  aged  less  than  60  living  in  households  with  very  low  work  intensity. 
However, Croatia is better than the EU average regarding the percentage of population aged 
18 or over in work at-risk-of-poverty rate (5.1% vs. 9.0% at EU level in 2019) and living in 
households  with  poor  housing  conditions  (10.2%  vs.  12.7  %  at  the  EU  level  in  2019).  On 
quality education (SDG  4) Croatia ranks best  in  the EU concerning the percentage of  early 
leavers from education and training in population aged 18 to 24 (2.2% vs. 9.9% at EU level in 
2020) and is  progressing  regarding tertiary  educational  attainment  in  population  aged 25 to 
34,  but  falls  behind  the  EU  average  on  the  participation  in  early  childhood  education  of 
children aged 3 to age of compulsory education, on achievements in mathematics and science 
of  15  year  olds,  on  the  participation  of  adults  in  learning  and  adults  (16  to  74  years  old) 
having at least basic digital skills. On gender equality (SDG 5) challenges remain for some 
indicators  such  as  inactive  population  due  to  caring  responsibilities  and  positions  held  by 
women  in  senior  management  positions,  however,  significant  advances  have  been  made  in 
the  last  years  concerning  the  seats  held  by  women  in  national  parliaments  (from  19.9%  in 
2019 to 31.1% in 2020 vs 32.7% at the EU level in 2020). Croatia is above the EU average 
regarding the gender pay gap, and slightly above the EU average on the employment gap, but 
the  latter  is  mainly  related  to  lower  employment  rates  of  both  man  and  women.  On 
inequalities  within  the  country  (SDG  10),  although  the  risk  of  poverty  or  social  exclusion 
between urban and rural areas has been reduced in the last years, the risk is still significantly 
higher in rural areas compared to EU average. 

Digital transition and productivity 

As  regards  SDG  9  -  Industry,  innovation,  and  infrastructure,  Croatia  is  ranked  very  low  in 
terms of gross domestic expenditures on R&D, with 0.97% in 2018 compared to the 2.2% EU 

19 

 
 
average. In 2018, 0.7% of the active working population worked in R&D compared to the EU 
average  of  1.4%.  Croatia  performs  well  in  terms  of  number  of  mobile  broadband 
subscriptions,  however,  challenges remain regarding the percentage of the population  using 
the internet. 

Macroeconomic stability 

Croatia faces  challenges in addressing SDG 16  – Peace, justice and strong institutions. The 
proportion of people who perceive their justice system to  be very or fairly independent  has 
been decreasing in recent years and is the lowest in the EU. Croatia also performs poorly in 
the corruption perceptions index. 

20 

 
 
 
 
3.  OBJECTIVES, STRUCTURE AND GOVERNANCE OF THE PLAN  

3.1. Overall strategy of the plan 

The  Croatian  recovery  and  resilience  plan  aims  to  support  Croatia’s  socio-economic 
recovery  and  long-term  development  after  the  standstill  caused  by  the  COVID-19 
pandemic  and  two  series  of  devastating  earthquakes  that  hit  Zagreb  and  its 
surroundings  in  March  2020  and  Banovina  region  in  December  2020.  It  also  aims  to 
address  the  long-standing  challenges  facing  the  economy  identified  in  the  National 
Development Strategy until 2030. These challenges are reflected in the structure of the plan, 
which  is  organised  around  five  components  -  (i)  Economy,  (ii)  Public  administration, 
judiciary and state assets, (iii) Education, science and research, (iv) Labour market and social 
protection  and  (v)  Health  -  and  one  initiative  Renovation  of  buildings.  In  total,  the  plan 
contains 76 reforms and 146 investments.  

The  component  Economy  fosters  inclusive  and  sustainable  development  by  boosting 
private investment and the transition towards the green and digital economy. It includes 
reforms and large-scale investments aiming to improve the competitiveness of the economy 
and  to  foster  innovation,  strengthen  agriculture,  transport,  energy  and  environmental 
protection,  as  well  as  to  develop  sustainable  tourism.  The  green  transition  entails 
decarbonising  the  energy  sector,  with  further  investments  in  renewables,  developing  new 
technologies and increasing the energy efficiency in  all sectors, and in particular in energy, 
transport  and  ICT  industry.  In  order  to  develop  a  competitive,  energy-sustainable  and 
efficient  transport  system,  investments  will  continue  in  the  modernisation  of  transport 
infrastructure  and  in  safety,  environmental  sustainability,  efficiency  and  competitiveness  of 
all transport modes.   

The  component  Public  administration,  judiciary  and  state  assets  includes  measures  to 
increase  the  institutional  efficiency  and  resilience.  It  aims  to  improve  the  efficiency  of 
public administration in order to better design, implement and evaluate policies and projects, 
including those financed by EU funds. It also aims to increase the efficiency of the judiciary 
by improving the handling of court proceedings and strengthening electronic communication 
in  courts,  as  well  as  by  improving  the  system  of  preventing  and  combating  corruption  and 
creating  the  preconditions  for  optimising  the  system  of  local  and  regional  self-government 
units  through  actual  or  functional  mergers  of  business  processes  and  digitisation.  Measures 
are  included  to  strengthen  the  fiscal  and  anti-money  laundering  framework,  increase  the 
efficiency of the public procurement and improve the management of state assets. 

The component Education, science and research aims to strengthen the education and 
research  system,  as  well  as  lifelong  learning.  The  reforms  and  measures  under  this 
component  are  expected  to  improve  access  to  and  improve  quality  of  education,  while 
fostering scientific excellence and strengthening Croatia’s research and innovation capacities, 
thereby  contributing  to  competitiveness  and  the  sustainable  development  of  the  economy, 
especially in the aftermath of the pandemic. Reforms and investments in the education system 
aim  notably  to  increase  access  to  early  childhood  education  and  care,  introduce  a  full-day 
teaching  model  in  primary  schools,  increase  the  percentage  of  pupils  in  general  secondary 
education,  which  could  lead  to  improved  tertiary  education  attainment,  modernise  higher 
education,  and  increase  the  labour  market  relevance  of  curricula  for  vocational  secondary 

21 

 
 
education and higher education, and improve adult learning. Reforms and investments in the 
Croatian research and innovation system notably seek to consolidate the public science base, 
revamp the institutional funding system of universities and public research organisations so 
as  to  incentivise  high  quality  research,  strengthen  the  attractiveness  of  research  careers  and 
improve the efficiency of R&I support programmes.  

The  component  Labour  market  and  social  protection  includes  measures  aimed  at 
boosting employment and ensuring adequate social protection, including by improving 
pensions adequacy. It aims to increase the employment rate and strengthen social cohesion. 
Measures  aim  to  help  ensuring  the  conditions  for  creating  new  jobs,  especially  for  young 
people and the self-employed. Reforms and investments within the component are expected 
to contribute to strengthening employment measures and the labour market institutions, while 
improving access to re-skilling and up-skilling. In order to protect the most vulnerable groups 
in  the  society,  the  measures  are  expected  to  contribute  to  streamlining,  targeting  and 
increasing social benefits as well as broadening their coverage hence improving their impact 
on reducing the risk of poverty and social exclusion. 

The  component  Health  focuses  on  the  accessibility  and  sustainability  of  the  health 
system  to  help  achieve  longer  life  expectancy,  better  quality  of  life  and  reduction  of 
health  inequalities.  It  aims  to  contribute  to  the  delivery  of  quality  health  services,  while 
strengthening  governance  in  the  health  system.  Reforms  and  investments  under  this 
component aim to contribute to the fight against the pandemic and to ensuring a public health 
system which is accessible, well-functioning, efficient and financially sustainable in the long-
term,  and  that  will  provide  quality  health  services  at  all  levels  of  healthcare  throughout 
Croatia. Measures are planned to increase the prevention and early detection of diseases and 
to foster the development of telemedicine and medical robotics.  

The initiative Renovation of buildings aims to foster decarbonisation of the sector and 
support the post-earthquake renovation of buildings. It aims to support the comprehensive 
renovation of multi-dwelling and public buildings, including health and educational facilities, 
as well as buildings with the status of a cultural good. The energy renovation programme in 
the housing sector is expected to help reduce energy poverty and increase energy efficiency. 
The initiative aims to speed up the renovation rate by addressing some of the challenges such 
as  the  shortage  of  skilled  workers  and  experts  in  energy  and  post-earthquake  renovation  as 
well  as  the  heavy  administrative  burden  in  the  renovation  process.  Measures  under  this 
initiative  also  aim  to  modernize  the  seismic  data  monitoring  system,  to  help  develop  green 
infrastructure and circular management of building and spaces, and the model for systematic 
monitoring  of  energy  consumption  for  private  buildings,  on  which  a  new  energy-efficiency 
based. 
financing 

model 

could 

be 

22 

 
 
Table 3. Components and associated costs 

Component 

Component 1: Economy 

C.1.1 Resilient, green and digital economy 

C1.2 Energy transition for a sustainable economy 

C1.3 Improving water and waste management 

C1.4 Development of a competitive, energy sustainable and efficient transport system 

C1.5 Improving the use of natural resources and strengthening the food supply chain 

C1.6 Developing sustainable, innovative and resilient tourism 

Component 2: Public administration, judiciary and state assets 

C2.1 Strengthening capacity to design and implement public policies and projects 

C2.2 Further improving the efficiency of public administration  

C2.3 Digital transition of society and public administration  

C2.4 Improving the management of state assets 

C2.5 Modern justice fit for future challenges 

C2.6 Preventing and combating corruption  

C2.9 Strengthening the fiscal framework 

Component 3: Education, science and research 

C3.1 Reform of the education system 

C3.2 Boosting research and innovation capacity 

Component 4: Labour market and social protection 

C4.1  Improving  employment  measures  and  the  legal  framework  for  the  modern 

labour market and the economy of the future 

C4.2 Improving the pension system through increased pension adequacy 

C4.3 Improving welfare systems 

Component 5: Health 

C5.1 Strengthening the resilience of the health system  

Initiative: Renovation of buildings 

TOTAL 

Costs  
(EUR million) 

3 411.5 

738.7 

658.3 

862.7 

728.7 

131.1 

292.0 

581.1 

22.8  

 68.2 

380.8 

1.9 

100.6 

6.0 

 0.8 

995.4 

676.9 

318.5 

276.5 

190.5  

3.0 

83.0 

340.3 

340.3 

789.0 

6 393.8 

23 

 
 
 
 
3.2. Implementation aspects of the plan 

Consistency with other programmes 

The  Croatian  recovery  and  resilience  plan  provides  detailed  justification  for  its 
alignment  to  the  goals,  priorities  and  policy  and  reform  recommendations  of  other 
national broad plans.  

The recovery and resilience plan is consistent with the key strategic documents, such as: 

 
 
 

 

 

the Croatian Government’s 2020 Programme,  
the National Reform Programme (2019-2024),  
the Country-specific recommendations (CSR) under the European Semester (2019 
and 2020),  
the Action Plan for Croatia’s participation in the Exchange Rate Mechanism (ERM II) 
and  
the National Development Strategy of the Republic of Croatia until 2030, which is the 
basic strategic development document for this decade.  

The  recovery  and  resilience  plan  is  consistent  with  the  latest  National  Energy  and 
Climate  Plan.  Notably,  both  the  “economy”  component  and  the  building  renovation 
initiative  include  reforms  and  investments  that  should  help  reach  the  climate  and  energy 
targets  for  2030  and  also  contribute  to  transition  towards  climate  neutrality.  The  energy 
transition  part  of  the  “economy”  component  focuses  on  increasing  the  share  of  renewable 
energy sources in energy consumption, decarbonisation of the energy sector, and investments 
in  advanced  biofuels  production  and  carbon  capture  and  storage.  The  building  renovation 
initiative seeks to  improve the  energy  efficiency of the domestic building stock (residential 
and non-residential, public and private). Finally, the component focusing on the development 
of a competitive and sustainable transport system is also relevant, by focusing on supporting 
electro-mobility and zero-emission fleets in the road, rail and maritime sectors.  

The  recovery  and  resilience  plan  is  consistent  with  the  National  Transport  Strategic 
Plan (2017-2030), as it aims to support the development of a modern, sustainable, accessible 
in 
and  climate  change  resilient 
modernising  and  upgrading  the  railway  infrastructure.  It  acknowledges  the  enhancement  of 
resilience against threats and risks of any kind as a crucial element of economic and societal 
development and progress.  

infrastructures, 

in  particular 

investments 

transport 

The recovery and resilience plan aims to be aligned with the Just Transition Mechanism 
and other funds  and programmes under the  Common  Provision Regulation as well as 
with the Innovation and Modernisation Funds under the EU Emissions Trading System. 
While the Partnership Agreement, Programmes and Territorial Just Transition Plans under the 
Common Provisions Regulation for the period 2021-2027 are still at a preparatory stage, the 
plan  draws  from  and  builds  on  the  outcomes  and  the  experience  from  implementing  the 
Partnership Agreement for the previous period (2014 – 2020). Also, the Economy component 
of  the  plan,  and  specifically  sub-component  1.2  on  the  energy  transition,  includes 
investments,  which should help  reduce  greenhouse gas emissions and alleviate the negative 
consequences of the green transition in the Sisak –Moslavina region, one of the two regions 
eligible  for  the  Just  Transition  Fund  in  Croatia.  Throughout  the  implementation,  it  will  be 

24 

 
 
important to ensure appropriate coordination between the recovery and resilience plan and the 
programmes co-financed by the Cohesion and Regional funds as well as the Innovation and 
Modernisation Funds  under the EU Emissions Trading  System, exploit  synergies and avoid 
overlaps to maximize impact of the investments and safeguard efficiency.  

National arrangements for the implementation of the plan 

A  dedicated  central  coordinating  body  under  the  Croatian  Ministry  of  Finance  will 
coordinate  and  carry  out  the  implementation  of  the  recovery  and  resilience  plan.  One 
specific reform included in the recovery and resilience plan defines the competent authorities 
and their respective responsibilities for carrying  out  the tasks for the implementation of the 
plan.  It  establishes  a  central  coordinating  body  under  the  Ministry  of  Finance  for  the 
implementation  and  monitoring  of  the  national  recovery  and  resilience  plan,  and  mandates 
the  Implementation  Committee,  which  will  ensure  consistency  and  coherence  in  the  use  of 
the EU funds.  

The Croatian plan foresees the strengthening of the management and control system of 
the  Agency  for  the  Audit  of  European  Union  Programmes  Implementation  System 
(ARPA),  which  will  also  be  responsible  for  the  recovery  and  resilience  plan.  This  aims  at 
meeting  the  increased  obligations  under  the  recovery  and  resilience  plan  and  to  enable  its 
efficient and effective implementation. The financial support of specific activities, such as the 
close  monitoring  of  projects’  progress,  audits  and  on-the-spot  inspections,  certifications, 
provision of information and publicity actions, is considered essential for the achievement of 
the recovery and resilience plan’s purposes. The IT system used for European structural and 
investment funds will also be upgraded to allow for the collection, storage and monitoring of 
data on the milestones and targets, including at the level of final recipients. 

Gender equality and equal opportunities for all 

The  recovery  and  resilience  plan  includes  measures  that  could  help  increase  female 
labour market participation. The reform of labour legislation is expected to help improve 
female  labour  market  participation  by  facilitating  work-life  balance,  and  to  contribute 
indirectly to the reduction of the gender pay gap and the currently high gender pension gap.  
The plan includes a reform of education system which aims to ensure equal opportunities for 
all children, mainly by increasing the participation in early childhood education and care and 
the  mandatory  instruction  hours  in  primary  school.  Croatia  will  develop  social  mentoring 
services that support hard-to-reach groups of beneficiaries such as persons with disabilities, 
victims  of  violence,  homeless  people,  migrants,  Roma  and  young  people  leaving  the  social 
welfare  system  to  assist  them  with  employment.  The  plan  foresees  several  investments  to 
address  specific  needs  of  persons  with  disabilities,  such  as  measures  to  ensure  physical 
accessibility to buildings and housing environment, as well as measures to provide adequate 
mobility services, promote hybrid access to a workplace and ensure access to digital public 
services.   

Consultation process  

According  to  the  recovery  and  resilience  plan,  Croatia  carried  out  a  consultation 
process  before  submitting  its  plan.  Croatia  carried  out  a  stakeholder  public  consultation 
after  the  submission  of  a  first  draft  plan  to  the  Commission  in  December  2020.  Between 
January  and  May  2021,  the  authorities  held  more  than  15  thematic  meetings  with  different 

25 

 
 
stakeholders where they presented the recovery and resilience plan opportunities for Croatia 
in  specific areas,  its structure, criteria, process  and complementarities with  other EU funds. 
During  the  consultation  process,  private  sector  representatives  pointed  to  the  general 
financing needs during the Covid 19 crisis and urged the authorities to direct special support 
to  the  SMEs  and  start-ups.  The  summary  of  the  plan  was  published  and  presented  to  the 
media ahead of its adoption by government on 1 April 2021. After adoption by government, 
the summary of the plan was posted on the government’s website and discussed in parliament 
on  14  April  2021.  Croatia’s  recovery  and  resilience  plan  does  not  outline  the  authorities’ 
plans  on  how  to  include  the  stakeholders  in  the  implementation  of  the  plan.  To  ensure 
ownership by the relevant actors, it is crucial to involve all local authorities and stakeholders 
concerned, including social partners, throughout  the implementation  of the investments  and 
reforms included in the plan.  

Technical Support   

Croatia has included in its recovery and resilience plan the estimated cost for additional 
technical support, under the Technical Support Instrument, for the implementation of 
innovative public procurement, in accordance with Article 7(2) of the RRF Regulation. The 
additional  technical  support  shall  contribute  to  enhanced  use  of  public  procurement  of 
innovative goods and services to stimulate their development and commercialisation. It will 
do  so  by  providing  recommendations  on  strengthening  the  innovation-specific  public 
procurement  framework  in  Croatia,  supporting  the  establishment  of  a  monitoring  and 
evaluation  system  for  innovation  procurement,  drafting  a  guide  for  procuring  entities  to 
conduct  innovation-related  procurement  procedures,  establishing  a  continuous  training 
system  to  strengthen  the  capacity  of  Croatian  procurers  in  innovation-related  procurement 
procedures and by raising the awareness of interested private sector stakeholders. 

In  addition,  the  Technical  Support  Instrument  provides  expertise  in  building  capacities  to 
implement the plan in a number of areas it covers, such as insolvency reform, interoperability 
and  coordination  of  public  policies’  digitalisation,  management  of  State  property, 
macroeconomic  modelling,  anti-money  laundering  framework,  and  telemedicine,  digital 
transformation of higher education and implementation of regulatory impact assessments.  

A  number  of  ongoing  technical  support  projects  funded  by  the  Structural  Reform  Support 
Programme contribute to the implementation of the plan in the following areas: support for 
business  environment  reform,  support  for  developing  just  transition  plans,  professional 
services  reforms,  costing  and  assessing  the  performance  of  public  polices,  management  of 
state-owned  enterprises,  e-judiciary,  budget  planning,  curricular  reform,  improving  social 
welfare  system,  and  health-system  performance  assessment.  Sectoral  support  under  the 
Horizon Policy Support  Facility  for the design and implementation of some of the research 
and innovation policy reforms foreseen as part of component 3.2 is also envisaged. 

Cross-border and multi-country projects 

The  plan  includes  cross-border  and  multi-country  projects  in  three  areas.  First,  there  are 
measures related to the interoperability of the information systems under the Digital transition 
component,  which  includes  the  establishment,  upgrading,  interconnection  of  the  core 
registers and the establishment of a Central Interoperability System in line with the European 
Interoperability  Framework  (EIF).  Second,  under  the  Education  component,  the  digital 
transformation  of  higher  education  is  expected  to  stimulate  and  accelerate  the  stronger 

26 

 
 
involvement  of  higher  education  institutions  in  cross-border  and  multinational  projects,  in 
particular projects for which digital maturity is a necessary condition for participation. Third, 
under the Water and waste management component, the Public Water Supply Development 
Programme  and  the  Programme  for  the  Development  of  Public  Sewerage  have  a  positive 
impact  on  the  environment  by  reducing  pollution  the  environment  and  water  resources, 
contributing to the conservation of water bodies, and in this sense their impact is cross-border 
and global.   

Communication strategy 

The  plan  broadly  outlines  Croatia’s  communication  plans.  The  objectives  of  the 
communication strategy are in line with the RRF Regulation and aim to raise awareness about 
the RRP’s contribution to the Croatian and European recovery and to the twin transition. The 
described  communication  strategy  will  publicise  the  objectives  pursued  by  the  Government 
through  the  implementation  of  the  Croatian  RRP  as  well  as  the  opportunities  for  funding, 
programmes and projects. 

The  plan  foresees  three  strategic  communication  goals.  These  include  familiarising  the 
general public with the content of the RRP, strengthening public trust in the implementation 
process  through  transparent  approach  and  raising  awareness  of  the  usefulness  of  EU 
membership  linking  it  to  the  opportunities  provided  by  RRP.  Croatia  plans  to  target  three 
main  groups  with  tailored  messages:  the  general  public,  beneficiaries  and  multipliers  with 
focus  on  media.  The  communication  channels  used  will  range  from  press  briefings, 
conferences,  regular  thematic  announcements,  thematic  broadcasts,  public  events  and 
promotional  videos.  Dedicated  web  page  will  be  set  up  and  an  information  campaign  on 
government social media organised.  

A  series  of  coordinated  communication  activities  with  the  European  Commission  is 
planned,  including  joint  press  releases,  conferences,  events  with  European  Commission 
representatives and cooperation in  an informal campaign on the social  media. Projects  with 
particular  relevance  for  Croatia  and  size  will  be  highlighted.  The  activities  will  be  either 
budget  neutral  or  be  included  in  a  separate  cost  statements  of  individual  projects.  The 
government  plans  to  monitor  the  impact  of  the  communication  measures  in  terms  of 
transparency, awareness of RRP opportunities and the role of the EU.  

 Security self-assessment 

Croatia  provided  a  preliminary  security  self-assessment  for  investments  in  digital 
capacities  and  connectivity.  It  describes  how  the  national  regulator  (HAKOM)  prepared  a 
draft ordinance on the manner and timing of implementing measures to safeguard the security 
and integrity of networks and services, which incorporates the technical measures referred to 
in  the  ‘5G  security  toolbox’.  These  rules  are  scheduled  to  enter  into  force  by  the  end  of 
summer 2021. Regarding public governmental cloud, further information is expected during 
the  implementation  phase.  Strategic  measures  mentioned  in  the  security  self-assessment 
would need to be closely monitored during the implementation of the plan. 

State aid 

State aid and competition rules fully apply to the measures funded by the Recovery and 
Resilience  Facility.  Union funds  channelled through the authorities of Member States, like 

27 

 
 
the RRF funds, become State resources and can constitute State aid if all the other criteria of 
Article 107(1) TFEU are met. When this is the case and State aid is present, these measures 
must be notified and approved by the Commission before Member States can grant the aid, 
unless those measures are covered by an existing aid scheme or comply with the applicable 
conditions  of  a  block  exemption  regulation,  in  particular  the  General  Block  Exemption 
Regulation (GBER) declaring certain categories of aid compatible with the internal market in 
application  of  Articles  107  and  108  TFEU3.  When  State  aid  is  present  and  it  requires 
notification,  it  is  the  duty  of  the  Member  State  to  notify  State  aid  measures  to  the 
Commission before granting them, in compliance with Article 108(3) TFEU. In this respect, 
the  State  aid  analysis  carried  out  by  Croatia  in  the  recovery  and  resilience  plan  cannot  be 
deemed  a  State  aid  notification.  In  as  far  as  Croatia  considers  that  a  specific  measure 
contained in the recovery and resilience plan entails de minimis aid or aid exempted from the 
notification requirement, it is the responsibility of Croatia to ensure full compliance with the 
applicable rules. Measures in the plan should also be compatible with the EU’s international 
obligations, in particular under World Trade Organization rules. 

4.  SUMMARY OF THE ASSESSMENT OF THE PLAN 

4.1. Comprehensive  and  adequately  balanced  response  to  the  economic  and  social 

situation   

The Croatian recovery and resilience plan amounts to EUR 6.4 billion in non-repayable 
support and represents a comprehensive and fairly balanced package consisting of 222 
individual measures (76 reforms and 146 investments).  

Croatia’s recovery and resilience plan contributes to the general objective of the Facility 
to  promote  the  Union’s  economic,  social  and  territorial  cohesion  by  referring  in  a 
comprehensive  manner  to  the  six  pillars  structuring  the  scope  of  application  of  the 
transition,  (ii)  Digital 
Recovery  and  Resilience  Facility  (Article  3):  (i)  Green 
transformation,  (iii)  Smart,  sustainable  and  inclusive  growth,  (iv)  Social  and  territorial 
cohesion, (v) Health and economic, social and institutional resilience, and (vi) Policies for the 
next generation. Table 4.1 below summarises the coverage of each of the components in the 
Croatian plan to one or more of the six pillars.   

Overall,  the  plan  includes  an  appropriate  balance  of  reforms  and  investments 
addressing  the  six  pillars,  reflecting  the  overall  financial  allocation  and  the  country's 
challenges.  Allocations  to  the  Green  and  Digital  transitions  meet  the  requirements  of  the 
Recovery and Resilience Facility Regulation, and the plan, therefore, contributes to these two 
pillars substantially. The Health,  economic, social  and institutional  resilience pillar benefits 
most  prominently  from  different  components;  at  the  same  time,  a  significant  number  of 
components  also  contribute  to  the  Green  and  Digital  transitions,  the  Smart,  sustainable  and 
inclusive growth, and Social and territorial cohesion pillars. Finally, the two components for 
education,  and  research  and  innovation  provide  an  important  contribution  to  the  pillar  on 
Policies for the next generation.  

28 

 
 
 
 
Table 4.1. Coverage of the six pillars of the Facility by the Croatian recovery and resilience 

plan components 

Green 
transition  

Digital 
transition  

Smart, 
sustainable 
& inclusive 
growth  

Social and 
territorial 
cohesion  

Health, and 
economic, 
social and 
institutional 
resilience  

Policies for 
the next 
generation  

1.1 Resilient, green and digital economy 

1.2. Energy transition for a sustainable 

economy 

1.3 Improving water management and 

waste management 

1.4. Development of a competitive, energy 
sustainable and efficient transport 
system 

1.5. Improving the use of natural resources 
and strengthening the food supply chain 

1.6. Developing sustainable, innovative 

and resilient tourism 

2.1 Strengthening the capacity to design 
and implement public policies and 
projects 

2.2. Further improving the efficiency of the 

public administration 

2.3. Digital transformation of society and 

public administration 

2.4. Improving the management of state 

property 

2.5. Modern justice fit for future 

challenges 

2.6. Preventing and combating corruption 

2.7. Strengthening the fiscal framework 

2.8 Strengthening the anti-money 

laundering framework 

2.9. Strengthening the public procurement 

framework 

3.1 Reform of the education system 

3.2. Boosting research and innovation 

capacity 

4.1 Improving employment measures and 
the legal framework for the modern 
labour market and the economy of the 
future 

4.2 Improving the pension system through 

increased pension adequacy 
4.3. Improving welfare systems 

5.1 Strengthening the resilience of the 

health system 

6.1 Renovation of buildings Initiative: 

Renovation of buildings 

Total number of components that 

significantly contribute to pillar 

● 

● 

● 

● 

○ 

○ 

● 

○ 

○ 

○ 

● 

6 

○ 

○ 

● 

● 

○ 

○ 

● 

● 

○ 

○ 

○ 

○ 

○ 

○ 

● 

○ 

5 

● 

○ 

○ 

○ 

● 

● 

○ 

○ 

● 

○ 

● 

○ 

5 

○ 

○ 

● 

○ 

○ 

○ 

○ 

○ 

○ 

○ 

○ 

● 

● 

● 

○ 

4 

○ 

○ 

○ 

● 

● 

● 

● 

● 
● 

● 

○ 

○ 

○ 

● 

● 

○ 

9 

Key:  

“●” investments and reforms of the component significantly contribute to the pillar;  
“○” the component partially contributes to the pillar  

29 

● 

● 

○ 

2 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Green transition 

Croatia’s  recovery  and  resilience  plan  supports  the  green  transition  through  several 
components. Significant contributions to the green transition are provided by six components 
that  focus  on  climate-related  and  environmental  measures,  and  on  preserving  biodiversity, 
while other five components include individual measures with noticeable contributions to the 
green  transition.  The  largest  contribution  stands  at  EUR  789  million  dedicated  to  building 
renovation  (C6.1),  representing  an  important  effort  in  the  reconstruction  after  the  2020 
earthquakes. An additional  EUR 658 million  are committed to  investments into energy and 
energy efficiency (C1.2), while EUR 649 million is earmarked to sustainable and innovative 
mobility  (C1.4).  EUR  501  million  is  dedicated  to  water  management,  circular  economy, 
biodiversity  and  ecosystems  (C1.3),  while  several  measures  provide  support  to  green 
transition  in  a  form  of  financial  instruments  amounting  to  EUR  604  million  under  the 
economy (C1.1) and tourism (C1.6) components. Finally, EUR 597 million are dedicated to 
improving  green  jobs  transition,  R&D  and  innovation,  energy  efficiency  in  justice 
infrastructure and agri-food system (C1.5, C2.5, C2.6, C3, C4).  

Digital transformation 

Digital  measures  are  included  in  the  majority  of  the  components  of  the  Croatian  plan 
reflecting the broad and crosscutting nature of the envisaged digitalisation efforts. Five 
components  can  be  identified  as  contributing  significantly  to  the  digital  transition,  while 
eleven have a partial impact. The most significant allocation to the digital transition is in the 
component  on  sustainable  and  innovative  mobility  (C1.4)  that  earmarks  EUR  692  million. 
The various measures throughout the plan, amounting to EUR 575 million in total, represent 
a  significant  effort  to  the  digitalisation  of  public  administration  and  raising  digital 
administrative  capacity,  notably  in  the  justice  system,  both  for  the  purpose  of  internal 
efficiency  and  improving  public  services  for  citizens.  In  particular,  one  component  (C2.3) 
focuses  explicitly  on  the  digital  transformation  of  Croatia’s  economy  and  society,  with 
various  measures  to  support  the  digitalisation  of  public  administration  and  the  provision  of 
digital  public  services.  Investments  in  digital  connectivity  are  also  included  for  digital 
infrastructures in remote rural areas, which are lagging behind in terms  of digital inclusion. 
Investments  under  the  energy  component  (C1.2),  amounting  to  EUR  433  million,  and 
projects worth EUR 402 million in the education (C3.1), R&D and innovation (C3.2) areas 
will  also  contribute  the  digital  transition.  The  healthcare  component  (C5.1)  dedicates  a 
majority of measures to health services digital shift amounting to EUR 44.1 million. Finally, 
many  components  dedicate  investments  to  digitalisation  that  improve  competitiveness, 
productivity,  job  skills  and  employability  through  contributions  totalling  EUR  791  million 
(C1.1, C1.3, C1.5, C1.6 and C4).  

Smart, sustainable and inclusive growth 

Numerous  components  include  measures  to  improve  the  business  environment, 
supporting SMEs and large enterprises, along with incentivising innovation and R&D. 
Ensuing  negative  effects  of  the  COVID-19  pandemic,  several  measures  in  the  economy 
(C1.1)  and  tourism  component  (C1.6)  are  tailored  to  enhance  the  productivity  and 
competitiveness of SMEs and the tourism sector through a combination of measures, grants 
and financial instruments aimed at supporting investments and employment, with a particular 
focus on the green and digital transitions. At the same time, measures in the components on 

30 

 
 
strengthening policy making (C2.1) and public procurement (C2.9) will support the better use 
and  higher  absorption  of  EU  funds,  thereby  contributing  to  the  economic  cohesion  within 
Croatia.  Through  the  revamping  of  the  framework  for  funding  research,  and  attracting  and 
retaining  talents,  the  component  on  research  and  innovation  (C3.2)  will  contribute  to 
increasing innovation, productivity and competitiveness of Croatian businesses. 

to  boost 

The  Economy  component  1.1  includes  investments  and  several  regulatory  and 
the  productivity  and 
administrative  changes,  which  are  expected 
competitiveness of Croatian businesses. The component includes around EUR 740 million 
worth  of measures, representing 11.5% of Croatia’s total  allocation.  It  envisages more than 
100  measures  to  reduce  the  administrative  and  parafiscal  burden  of  businesses  by  at  least 
EUR  400  million  and  to  continue  the  liberalisation  of  regulated  professions  to  further 
improve  the  business  environment  in  Croatia.  The  digitalisation  of  public  services  to 
businesses  will  also  continue.  Substantial  resources  within  the  economy  component  (EUR 
560  million)  are  devoted  to  increasing  businesses’  access  to  capital  to  boost  their 
competitiveness, increase their productivity, adapt their business processes to the green and 
digital  transition  and,  specifically,  to  increase  their  investments  in  green  technology.  This 
component pays specific attention to supporting the cultural and creative sectors, which were 
hit  particularly  hard  by  the  pandemic,  in  digitalising  their  services  and  digitising  archives, 
and  thereby  adopt  a  more  sustainable  business  model.  Finally,  this  component  envisages 
amending the legal framework and improving the efficiency of innovation support schemes, 
while  providing  tailored  support  to  innovative  start-ups  and  SMEs  with  a  view  to 
substantially  increase  the  innovation  capacity  of  Croatian  businesses  and  stimulate  private 
R&D investment. 

The  plan  seeks  to  put  the  tourism  sector  of  Croatia  on  a  more  sustainable  footing  by 
focusing  attention  on  the  less  developed  regions  and  tourism  products.  Component  1.6 
(EUR 290 million) is dedicated to help the recovery and increase the resilience of the tourism 
sector, which is one of the main drivers of the growth of the Croatian economy but has been 
particularly  affected  by  the  restrictions  adopted  to  fight  the  pandemic.  The  plan  focuses  on 
developing tourism and increasing the uptake of digital technology of the sector, notably by 
updating  infrastructure  to  increase  its  energy  efficiency  and  the  use  of  renewable  energy 
sources, while promoting the adoption of new business plans in line with the principles of the 
circular economy. A  further objective of this component is  to  increase the attractiveness  of 
less developed inland tourist destinations, raising their quality and enabling extended seasons, 
fostering sustainable forms of tourism and developing tourism infrastructure. 

Social and territorial cohesion 

The  plan  aims  at  enhancing  social  cohesion  mainly  through  labour  market  policy 
measures  and  appropriate  skills  development,  also  targeting  vulnerable  groups,  and 
through  re-designing  social  policies  to  improve  their  poverty-reduction  capacity.  To 
achieve the latter, both the reforms and investments of component 4.1 are tailored to address 
the current and future demand of the labour market, mainly focusing on skills necessary for 
the  green  and  digital  transition  of  the  economy.  The  overall  envelope  of  the  labour  market 
component  (4.1)  amounts  to  EUR  179  million,  with  the  majority  of  the  allocation  geared 
towards  creating  the  adult  education  voucher  system  focused  on  reskilling,  upskilling  or 
uptake of new skills related to green and digital transition. Furthermore, in order to tackle low 

31 

 
 
labour activity as one of the key challenges of the Croatian labour market, the active labour 
market  policies  (AMLP)  will  focus  on  raising  the  competitiveness  and  employability  of 
vulnerable  groups,  long-term  unemployed,  inactive  and  young  NEETs.  Moreover,  poverty-
reducing  measures  in  the  pension  (C4.2)  and  social  policies  (C4.3)  components  have  the 
potential to substantially enhance social cohesion.  

The  plan  is  expected  to  support  the  territorial  cohesion  of  Croatia  through  various 
measures.  These  include  expanding  and  upgrading  network  infrastructures  to  connect 
regions better, introducing new electronic services and improving the regulatory framework. 
In particular, the component on water and waste management (C1.3) envisages investments 
amounting  to  EUR  700  million  aimed  at  renovating  and  rehabilitating  775  km  of  public 
sewerage  networks  and  226  km  of  water  supply  networks  and  improve  flood  protection  in 
risk areas. In addition, EUR 386 million in the transport component (C1.4) will be dedicated 
to  improve  both  the  management  and  the  physical  infrastructure  of  road,  rail  and  maritime 
transport,  thereby  improving  the  accessibility  and  connectedness  of  less  densely  populated 
areas.  The  plan  is  expected  to  further  reduce  territorial  fragmentation  by  giving  priority  to 
less  developed  regions  when  providing  financial  support  to  businesses  under  the  economy 
component  (C1.1)  and  the  tourism  component  (C1.6)  and  by  ensuring  a  high  -quality  and 
efficient  system  of  local  and  regional  self-government  through  incentivising  both  the 
functional and actual integration of local government units. 

Health,  and  economic,  social  and  institutional  resilience,  with  the  aim  of,  inter  alia, 
increasing crisis preparedness and crisis reaction capacity 

In the exceptional circumstances caused by COVID-19 pandemic, the Croatian recovery 
and resilience plan recognises health  (C5.1) as one of the critical sectors for achieving 
crisis preparedness and resilience. An allocation of EUR 340 million is entirely dedicated 
to improving the healthcare system, in terms of necessary structural reform changes as well 
as  infrastructure  and  medical  equipment  requirements.  The  reform  effort  is  focused  on 
supporting  the  sector's  long-term  financial  sustainability,  by  assuring  joint  procurement 
purchasing  for  national  health  facilities.  Through  the  restructuring  and  reorganisation  of 
essential  health  services,  the  long-term  sustainability  of  services  and  the  efficient  use  of 
existing  human  resources  can  be  addressed.  The  plan  will  support  investments  to  develop 
harmonised standards, foster the uptake of modern medical treatment practices, and provide 
specialised  medical  staff  training.  Measures  have  also  been  included  to  promote  full 
territorial  coverage  of  primary  healthcare  and  medicine  availability,  thus  improving  the 
resilience and preparedness of the system while at the same time increasing the quality of life 
in  rural,  remote  and  islands  areas.  In  addition,  digitalisation  is  used  to  enable  remote 
teleservices and better use of limited resources and capacity.   

Long-term  care  (LTC)  investments  amount  to  EUR  82  million  and  are  aimed  at 
supporting  the  development  of  family  and  community-based  services,  while  securing 
access  to  institutional  care  for  individuals  whose  well-being  depends  on  it. Reforms 
included  in  the  component  on  social  policies  (4.3)  aim  to  support  the  transition  to 
deinstitutionalised  long-term  care,  especially  for  older  adults.  Furthermore,  creating 
harmonised quality standards in specific services and further developing the social mentoring 
service will enable a shift towards more community-based services.         

32 

 
 
The  components  on  strengthening  policy  making  (C2.1)  and  on  public  administration 
(C2.2)  are  specifically  dedicated  to  strengthening  the  public  administration,  and  other 
parts of the plan also  contribute significantly to institutional  resilience.  Component 2.1 
includes measures to strengthen mechanisms for the coordination and management of public 
policies, and component 2.2 will revamp procedures in the civil service to recruit, retain and 
remunerate civil servants with a view to improving the quality of public services at all levels 
of  government.  The justice  component (C2.5) and the  component  on  anti-corruption (C2.6) 
include reforms and investments, for a combined total of EUR 100 million, which is expected 
to significantly improve the efficiency of the justice and anti-corruption systems, shorten the 
length of court proceedings and reduce the backlog of court cases. Legislative changes in the 
fiscal component (C2.7), reforms foreseen as regards the anti-money laundering frameworks 
(C2.8), as well as the development of better forecasting tools will contribute to risk mitigation 
and  crisis  preparedness.  Measures  in  the  component  on  public  procurement  (C2.9)  will 
strengthen the public procurement framework, leading to better absorption of EU funds and 
improve 
the  OECD 
recommendations  on  the  governance  of  state-owned  enterprises  and  further  reducing  the 
portfolio of state assets will lead to better management of state assets and increased economic 
resilience of the public sector.  

the  efficiency  of  public  expenditure.  Finally, 

implementing 

Policies for the next generation, children and the youth, such as education and skills 

The  plan  includes  important  measures  targeted  to  children  and  youth,  to  support 
education and the future of the next generation. These are most significantly addressed in 
the  two  components  education  (C3.1)  and  on  research  and  innovation  (C3.2).  The  plan 
includes  measures  to  support  the  reform  of  the  education  system,  based  on  infrastructure 
investments  to  increase  participation  in  early  childhood  education  and  care  and  enable  an 
increase in mandatory education time at primary and lower secondary education levels. These 
measures,  together  with  the  reform  of  curricula,  are  expected  to  visibly  improve  education 
outcomes  and  the  modernisation  of  higher  education  should  improve  its  labour  market 
relevance.  Furthermore,  measures  aiming  at  strengthening  the  attractiveness  of  research 
careers,  such  as  fellowships  for  students  in  Science,  technology,  engineering,  and 
mathematics  (STEM)  and  Information  and  communications  technology  (ICT)  areas,  are 
expected to foster skills development and enhance employability. 

Taking into consideration all reforms and investments envisaged by Croatia, its recovery and 
resilience  plan  represents  to  a  large  extent  a  comprehensive  and  adequately  balanced 
response to  the economic and social situation, thereby  contributing appropriately to  all six 
pillars referred to in Article 3 of the RRF Regulation, taking the specific challenges and the 
financial  allocation  of  Croatia  into  account.  This  would  warrant  a  rating  of  A  under  the 
assessment criterion 2.1 in Annex V to the RRF Regulation. 

4.2. Link with country-specific recommendations and the European Semester 

According  to  the  Regulation,  the  recovery  and  resilience  plan  is  expected  to  contribute  to 
effectively addressing a significant subset of challenges addressed to Croatia identified in the 
relevant  country-specific 
thereof  and 
recommendations  made  pursuant  to  Article  6  of  Regulation  (EU)  No  1176/2011  where 

recommendations, 

fiscal  aspects 

including 

33 

 
 
appropriate,  or  challenges  identified  in  other  relevant  documents  officially  adopted  by  the 
Commission in the context of the European Semester. 

Assessment by challenges  

Table  4.2  presents  the  mapping  of  the  selected  challenges,  the  associated  country-specific 
recommendations  (CSRs)  and  the  six  components  of  the  Croatian  recovery  and  resilience 
plan.  

Public finances 

The Croatian recovery and resilience plan contains two reforms under components 2.7 
and  2.2  that  reinforce  the  budgetary  framework  and  the  monitoring  of  contingent 
liabilities  at  central  and  local  level  (CSR  2019.1.1).  Component  2.7  aims  at  further 
strengthening the fiscal framework and fiscal discipline through amending the Budget Law to 
improve  budgetary  processes,  improve  financial  reporting  and  develop  a  macroeconomic 
projection model. Reinforcing the fiscal framework is one of the basic elements of improving 
the sustainability of public finances, which in turn contributes to macroeconomic stability and 
creates the preconditions for increasing potential growth rates, as well as economic recovery 
and  resilience.  This  component  also  partially  addresses  CSR  2020.1.1  on  pursuing  fiscal 
policies aimed at achieving prudent medium-term fiscal positions. Component 2.2 contributes 
to addressing the CSR with measures aimed at achieving a more functional and sustainable 
local government through further optimisation of local government units. 

Labour market, education and social policies  

Reforms  and  investments  under  component  4.1  address  recommendations  related  to 
labour  market  measures  and  institutions  (CSR  2019.2.3  and  2020.2.1).  The  plan 
envisages  the  adoption  of  active  labour  market  policies  (ALMP)  to  boost  employment  and 
self-employment linked to the green and digital transitions. The planned interventions aim at 
facilitating the inclusion of vulnerable groups in the labour market and monitoring of labour 
market  outcomes  through  improvements  of  the  Public  Employment  Service  processes. 
Investments  under  this  component  include  the  funding  of  vouchers  for  accredited  adult 
education,  training  and  upskilling  programmes  to  acquire  the  skills  needed  in  the  labour 
market.  These  measures  have  the  potential  of  increasing  the  competitiveness  and 
employability of the labour force in line with labour market needs and with a particular focus 
on  the  activation  of  the  long-term  unemployed  and  the  inactive  population.  The  proposed 
reform  of  the  labour  law  has  the  objective  of  establishing  a  clear  and  modern  legislative 
framework aimed at improving working conditions and work-life balance, at better regulating 
novel forms of work and encouraging the transitions from fixed to open-ended contracts and 
from undeclared to declared work. 

The Croatian plan addresses, through component 3.1, the recommendations to deliver 
on the education reform and improve access to education and training at all levels, their 
quality and labour market relevance (CSR 2019.2.1) and to promote the acquisition of 
skills  (CSR  2020.2.4).  It  supports  reform  of  the  education  system,  which  aims  to  improve 
access  to  early  childhood  education  and  care  and  to  increase  the  quality  of  teaching  and 
learning outcomes. The plan includes measures to increase the number of mandatory teaching 
hours  in  primary  schools,  introduce  a  new  full-day  teaching  model,  increase  students’ 
enrolment  in  general  secondary  schools  and  improve  the  labour  market  relevance  of 

34 

 
 
curricula.  It  also  includes  infrastructure  investments  in  early  childhood  education  and  care, 
schools  and  higher  education  digital  infrastructure.  Measures  from  component  3.1  will 
contribute  to  addressing  the  2020  Council  recommendation  to  promote  the  acquisition  of 
skills (CSR 2020.2.4). For basic skills, this will be achieved through increase of the number 
of mandatory teaching hours in primary schools and related reforms. Investments under this 
component also aim to support the digital transformation of higher education and facilitate e-
learning.  This  includes  investments  in  digital  infrastructures  for  teaching  and  the 
development  of  digital  teaching  tools.  Skill  acquisition  is  also  partially  addressed  through 
component  4.1  by  implementing  a  voucher  system  for  re-  and  up-skill  aimed  at  vulnerable 
groups, through component 1.6 with measures to educate students and unemployed persons to 
strengthen knowledge and skills in tourism, and through component 1.1 by funding a voucher 
system that will cover training for improving digital skills. 

Challenges  concerning  the  Croatian  social  welfare  system,  both  as  regards  social 
benefits and social services, are addressed by component 4.3. In particular, the proposed 
reforms  and  investments  relate  to  the  CSR  to  consolidate  social  benefits  and  improve  their 
capacity  to  reduce  poverty  (2019.2.2),  the  CSR  on  the  adequacy  of  unemployment  benefits 
and  minimum  income  schemes  improvement  (2020.2.2),  as  well  as  on  increasing  access  to 
digital  infrastructure  and  services  (2020.2.3).  Measures  under  component  4.3  envisage  the 
increase of the basic amount and the coverage of the Guaranteed Minimum Benefit (the main 
poverty reducing benefit at the national level), as well as the merger of benefits with the same 
functions  –  with  the  aim  to  improve  coverage,  adequacy  and  targeting  of  social  benefits. 
Investments in the digitalisation of the social benefits system will provide a simplified access 
and  an  overview  of  the  type  and  amount  of  social  benefits  that  beneficiaries  are  entitled  to 
receive at the national level as well as at the level of local and regional government units. The 
plan  also  envisages  the  development  of  new  social  services  (social  mentorship  and  family 
assistants)  with  the  aim  to  prevent  institutionalisation  and  social  exclusion,  as  well  as 
measures to support the transition to home and community-based long-term care for elderly 
people. The combined impact  of these measures should help  reduce poverty, prevent  social 
exclusion  and  develop  social  services  tailored  for  vulnerable  groups,  thereby  building  of  a 
more resilient society.  

Health care  

Component 5.1 of the plan addresses the recommending to enhance the resilience of the 
health  system  while  promoting  a  more  balanced  geographical  distribution  of  health 
workers  and  facilities,  a  closer  cooperation  between  all  levels  of  administration  and 
investments  in  e-health  (CSR  2020.1.2).  Component  5.1  allocates  more  than  340  million 
euro  in  investments  to  address  the  challenges  of  resilience  and  sustainability  of  the  health 
care  system,  which  translate  into  below  EU  average  life  expectancy,  weak  preventive, 
chronic and long-term care. The main measures include: improving the digitalised system of 
joint procurement, purchasing new medical equipment, increasing the number of physicians, 
nurses and other health professionals, the introduction of a new care model for patients, the 
functional  integration  of  hospitals  and  the  strengthening  of  day  hospitals  at  secondary  and 
tertiary level. The overarching objective of the reforms and investments in this component is 
to  improve  the  efficiency,  quality,  accessibility,  and  financial  sustainability  of  the  health 
system. 

35 

 
 
Green and digital transition, and other structural policies  

The  recovery  and  resilience  plan  addresses  recommendations  related  to  reducing 
emissions  and  ensuring  a  more  efficient  transport  system,  further  decarbonising  the 
energy  sector  and  increasing  energy  efficiency  across  different  sectors,  and  improving 
water  and  waste  management.  The  measures  and  investments  included  in  the  plan 
contribute in tackling the recommendation (CSR 2020.3.6) to focus investment on the green 
and  digital  transition,  in  particular  on  environmental  infrastructure.  Several  components  of 
the  Croatian  plan  (1.1,  1.2,  1.3,  1.4,  1.5  and  6.1)  contribute  to  achieving  this  objective  by 
promoting investments in clean and efficient energy, carbon capture and storage, an efficient 
and sustainable transport system, the improvement of water and waste management and the 
decarbonisation of buildings. 

Component 1.2 regarding energy transition addresses the Council recommendations to 
focus  investment  on  energy  efficiency,  renewables  and  environmental  infrastructure 
and  the  green  transition  to  clean  and  efficient  production  and  use  of  energy  (CSR 
2019.3.3 and CSR 2020.3.8). This component alone exceeds 10% of the plan allocation. The 
objective  of  this  component  is  to  facilitate  the  decarbonisation  of  the  energy  and  transport 
sectors,  including  the  development  of  innovative  technologies.  This  would  contribute  to 
achieving the contribution of 36.6% to the EU`s 2030 target of renewable energy sources that 
was  set  by  Croatian  National  Energy  and  Climate  Plan  (NECP)  and  meeting  Croatia’s 
contribution to the EU energy efficiency target of 32.5% by 203015. It would also contribute 
to reaching the 14% share of renewables in transport by 2030. The reforms in component 1.2 
consist  of  legislative  initiatives  to  (i)  remove  barriers  and  administrative  procedures 
restraining the uptake of renewable energy sources, including the introduction of a premium 
system  for  the  support  of  investment  in  renewables;  (ii)  finalize  the  certification  of  the  gas 
transmission system operator; and (iii) promote use of alternative fuels in transport, including 
hydrogen and advanced biofuels. Investments consist of: promoting production of renewable 
hydrogen as an alternative fuel, carbon capture and storage, construction of a biorefinery that 
will produe advanced biofuels, digitalising the energy system, fostering energy efficiency and 
investments in renewable energy, with the aim to decarbonise the energy sector and transport 
sector. 

The plan also addresses the recommendations to focus investments in sustainable urban 
and rail transport (CSR 2019.3.3, CSR 2020.3.7). Component 1.4, on the development of a 
competitive, energy-sustainable and efficient transport system can contribute significantly to 
the implementation of this recommendation. The component allocates 11.4% of investments 
of the overall plan to develop a uniform transport network with developed railway and public 
transport infrastructure and intermodality between different modes of transport, increase the 
share of vehicles and vessels powered by alternative fuels, reduce greenhouse gas emissions 
and environmental footprint of the transport sector, as well as foster sustainable mobility of 
people and goods. This component includes reforms and investments in all transport modes 

15 Economidou, M., Ringel, M., Valentova, M., Zancanella, P., Tsemekidi Tzeiranak, S., Zangheri, P., Paci, D., 
Ribeiro Serrenho, T., Palermo, V. and Bertoldi, P., National Energy and Climate Plans for 2021-2030 under the 
EU Energy Union, JRC122862. 

36 

 
 
                                                           
(rail, road, maritime, air, public urban and inland waterway transport) and covers all regions 
of Croatia. 

Component  2.3  of  the  plan  contributes  to  addressing  the  recommendation  to  increase 
access  to  digital  infrastructure  and  services  and  to  focus  investment  on  high-speed 
broadband  (CSR  2020.2.3  and  CSR  2020.3.9).  This  component  focuses  on  the  digital 
transformation  of  Croatia’s  society  and  the  public  administration.  It  includes  reforms  and 
investments to digitalise the public administration and increase the provision and quality of 
digital  public  services.  It  also  includes  reforms  and  investments  in  connectivity  with 
measures to provide access to very high-capacity networks in rural areas.  

Component  3.2  regarding  boosting  R&I  capacity  contributes  to  addressing  the 
recommendation  to  focus 
investment-related  economic  policy  on  research  and 
innovation (CSR 2019.3.1). Through a series of reforms and investments this component has 
the following objectives: (i) improving the system of institutional funding for universities and 
scientific institutes to incentivise scientific excellence and to promote research collaborations 
and knowledge transfer through the introduction of performance-based funding; (i) increased 
investment  in  research  infrastructure  and  organisational  capacities  of  universities  and 
scientific  institutes,  which  shall  allow  for  a  higher  quality  of  scientific  research  as  well  as 
improving the attractiveness of research careers in Croatia; (iii) introducing a new enabling 
framework  for  the  advancement  and  career  development  of  researchers,  in  line  with  the 
specificities  of  scientific  fields,  attracting  and  retaining  young  Croatian  scientists  and  high-
quality  foreign  scientists;  (iv)  introducing  a  more  efficient  institutional  and  programming 
framework for research and development funding programmes.  

Public administration, judiciary and the business environment  

Component 2.2 of the plan contributes to address the challenges of the Croatian public 
administration,  as  identified  in  consecutive  CSRs  (2019.1.2,  2019.2.4,  and  2020.4.1).  
Component 2.2 of the plan envisages the introduction of new wage and work models in the 
civil  service  and  public  service,  upgrading  the  human  resource  management  system,  and 
fostering vertical and horizontal mobility. It also aims at improving the recruitment process in 
the  civil  service  by  strengthening  the  admission  system  and  further  improving  the 
competences of civil servants. The plan also partly addresses the high level of fragmentation 
of  the  Croatian  public  administration  at  the  local  government  level,  which  results  in  many 
small  local  governments  often  lacking  adequate  financial  and  administrative  resources  to 
provide  the  services  under  their  remit,  which  creates  wide  disparities  in  public  service 
provision.  The  measures  under  component  2.2  incentivise  support  for  functional  and  actual 
mergers of local government units. The reforms in the public administration are supported by 
targeted  investments  in  the  digitalisation  of  the  public  administration,  interoperability,  the 
upgrading of IT systems, including in human resource management.  

Component 2.1 of the plan is dedicated to reinforcing the capacity and efficiency of the 
public  administration  to  design  and  implement  public  projects  and  policies  at  central 
and  local  level  (CSRs  2019.3.4  and  2020.4.1).  The  overall  objective  of  the  envisaged 
measures is to improve the quality of public policy making, increase the public administration 
the 
capacity  by  enhancing  coordination  among  relevant  ministries  and 
implementation  phase.  More  specifically,  the  reform  will  strengthen  mechanisms  for 
coordination  and  integration  of  public  policies,  link  currently  separate  processes  and 

improving 

37 

 
 
procedures,  broaden  the  scope  and  application  of  public  policy  and  regulatory  impact 
assessment  processes,  and  professionalise  strategic  planning  and  impact  assessments  of 
regulations.  These  measures  are  supported  by  investments  in  the  digitalisation  of  processes 
for strategic planning and impact assessment as well as investments to provide assistance to 
final recipients in the preparation of tender project-technical files. 

The  plan  addresses  recommendations  to  improve  the  efficiency  of  the  judicial  system 
and to reduce the duration of court proceedings and improve electronic communication 
in courts (CSR 2020.4.2 and CSR 2019.4.3)16. One of the main strategic objectives outlined 
in the plan is to improve the effectiveness of the justice system in order to contribute to the 
development of the economy and respond to citizens’ expectations of strengthening the rule 
of law. The reforms include measures such as amendments to the civil procedural code and 
improvements  to  business  processes  in  courts  that  will  contribute  to  reducing  backlogs  and 
shortening  court  proceedings,  focusing  on  a  transparent  and  efficient  administration  of  the 
justice system. The component also includes investments to improve the digitalisation of the 
justice  system,  particularly  electronic  communication  between  courts  and  parties,  and 
upgrading the ICT system for case management. 

Components  2.6  and  2.9  contribute  to  addressing  the  recommendation  to  enhance  the 
prevention and sanctioning of corruption, in particular at the local level (CSR 2019.4.2). 
Component  2.6  includes  measures  to  i)  increase  the  efficiency,  coherence  and  openness  of 
authorities in the fight against corruption, ii) improve the implementation of the Law on the 
Right  of  Access  to  Information,  iii)  enhance  corporate  governance  in  majority-owned 
companies  of  local  and  regional  self-government  units  and  iv)  strengthen  judicial  redress 
capacity  in  public  procurement  procedures.  While  component  2.9  primarily  aims  at 
enhancing  the  transparency  and  efficiency  of  public  procurement,  it  also  contributes  to  the 
fight  against  corruption  by  shortening  the  average  time  limit  for  appeals  and  upgrading  the 
functions of the current public procurement system. 

Component  1.1  of  the  plan  deals  with  recommendations  to  improve  the  business 
environment in Croatia and address barriers to growth and investment (CSRs 2019.4.4, 
2019.4.5  and  2020.31,  2020.3.2,  2020.3.3).  It  takes  a  broad,  horizontal  approach  in 
addressing  some  of  the  structural  weaknesses  of  the  Croatian  economy,  including  a 
cumbersome  business  environment,  relatively  low  investments  by  the  private  sector,  and 
limited access to financing by the most innovative companies. This component addresses the 
CSRs to provide liquidity to small- and medium-size companies, reduce para-fiscal  charges 
and  excessive  product  and  services  market  regulation,  promoting  private  investments  and 
focusing  investments  on  the  green  and  digital  transition.  The  package  of  reforms  includes 
further liberalising regulated professions, increasing access to credit with the help of grants, 
concessional  loans  and  equity  instruments,  attracting  foreign  direct  investments  and 
supporting the cultural and creative sectors in their digital transition. The proposed measures 
should help to achieve a better allocation of capital resources within the economy by devising 

16 According to the 2021 EU Justice  Scoreboard, backlogs and length of proceedings remain among the  most 
considerable in the EU, and the Information and Communication Technologies (ICT) for case management and 
the electronic communication between courts and parties remain among the least developed in the EU. 

38 

 
 
                                                           
changes  to  the  regulatory  framework  to  incentivise  private  sector  investment.  Reforms  are 
accompanied  by  grants  and  concessional  financial  instruments  to  support  businesses, 
particularly  for  adopting  green  technologies;  and  improving  access  to  alternative  or 
innovative ways of financing. Investments also include – for example – the digitalisation of 
government  and  public  administration  services  provided  to  the  business  sector,  as  well  as 
interventions  to  enhance  the  digital  transformation  of  Croatian  companies  by  providing 
financial support for the deployment of digital solutions in their business operations.  

Component 2.4 addresses the recommendation (on improving corporate governance of 
SOEs  and  intensifying  the  sale  of  non-strategic  assets  (CSR  2019.4.1).  State-Owned 
Enterprises  (SOEs)  play  a  significant  role  in  the  Croatian  economy.  The  proposed  reforms 
envisage an update of the list of SOEs that have a strategic interest to Croatia, as well as the 
adoption  of  a  new  legislation  which  would  implement  the  OECD  recommendations, 
harmonise  the  regulatory  framework  for  the  corporate  governance  of  SOEs,  and  strengthen 
the  SOEs  board’s  autonomy  and  independence.  Further  measures  aim  to  strengthen  the 
human and institutional capacities at the central government level with a view to setting the 
financial and operational objectives of SOEs. The plan also includes a commitment, although 
limited, to reduce the number of SOEs which are non-strategic. Overall, improving corporate 
governance  in  strategic  SOEs  and  therefore  their  efficiency,  together  with  the  continued 
reduction  in  the  portfolio  of  government  assets  can  lead  to  a  distinct  rise  in  overall 
productivity.  Component  2.4  also  contributes  to  the  fulfilment  of  Croatia’s  post-ERM  II-
accession  commitments.  Overall,  the  plan  constitutes  a  comprehensive  package  of  reforms 
and  investments  directed  at  addressing  the  challenges  identified  in  the  European  Semester, 
particularly the country-specific recommendations.  

Taking into consideration the reforms and investments envisaged by Croatia, its recovery and 
resilience plan is expected to contribute to effectively addressing all or a significant subset of 
challenges  identified  in  the  country-specific  recommendations,  or  challenges  in  other 
relevant documents officially adopted by the Commission under the European Semester, and 
the recovery and resilience plan represents an adequate response to the economic and social 
situation of Croatia. This would warrant a rating of A under the assessment criterion 2.2 in 
Regulation.
Annex 

RRF 

the 

to 

V 

39 

 
 
Table 4.2 Mapping of country challenges identified in 2019-20 country-specific recommendations and the Croatia RRP components  

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C

Country challenges 
(as identified in Section 2) 

Associated CSR (2019-2020) 

Fiscal policy and fiscal governance 

Access to finance 

Active labour market policies 
Wages & wage setting  
Poverty reduction & social inclusion  
Education, skills & life-long learning 

2019 1.1 

2020 3.1 

2019 2.3, 2020 2.1 
2019 2.4 
2019 2.2, 2020 2.2 
2019.2.1, 2020 2.4 

Health care  

2020 1.2 

Public Finances 

● 

● 

Financial Sector 
○ 
○ 
Labour market, education and social policies 

● 

○ 

○ 

○ 

● 

○ 

○ 

○ 

Health care  

Research & innovation 
Energy, resources & climate change 
Transport 
Green and digital transition 

Business Environment 
Public administration 
State-owned enterprises 
Civil justice 
Corruption 

2019 3.1 
2019 3.3, 2020 3.8 
2019 3.2, 2020 3.7 
2020 3.6, 2020 3.9, 2020 2.3 

Green and digital transition and other structural policies 
○ 

○ 

○ 

● 
○ 

● 

●  ●  ●  ●  ● 

○ 

● 

2019 4.4, 4.5 and 2020 3.2, 3.3, 3.4, 3.5  ● 

Public administration, judiciary & business environment 
● 

● 

● 

○ 

2019 1.2, 2019 3.4, 2020 4.1 
2019 4.1 
2019 4.3, 2020 4.2 
2019 4.2 

● 

●  ● 

● 

● 

● 

● 

● 

Key: “●” investments and reforms of the component significantly address the challenge; “○” the component partially addresses the challenge 

40 

● 

●  ●  ● 
○ 
● 

○ 

● 

● 

●  ● 

● 

●  ● 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4.3. Growth  potential,  job  creation,  economic,  institutional  and  social  resilience, 
European  Pillar  of  Social  Rights,  mitigating  the  impact  of  the  crisis,  and  social 
territorial cohesion and convergence  

Fostering economic growth and jobs 

The  investments  financed  by  the  Recovery  and  Resilience  Facility  are  expected  to  foster 
economic growth already in the short- to medium-term. The much needed boost to Croatia’s 
economy in the aftermath of the COVID-19 crisis will be ensured through numerous investments 
and  consumption  worth  over  EUR  6.3  billion,  or  more  than  11½  %  of  Croatia’s  2019  GDP. 
Although  investments  in  a  small  and  open  economy  like  Croatia’s  feature  a  comparatively  big 
import component which moderates their immediate impact on GDP growth, the impact is still 
substantial.  The  short-term  impact  of  the  plan  was  projected  using  PACMAN,  a  simultaneous 
equation  error  correction  macroeconomic  model.  The  results  project  GDP  to  be  almost  4% 
higher  in  the  last  year  of  the  plan  compared  to  the  no-RRF  baseline.  This  growth  estimate  in 
excess  of  the  baseline  scenario  is  somewhat  higher  than  a  simulation  conducted  by  the 
Commission using the QUEST  model (although  due to  methodological  differences the  two are 
not fully comparable). 

In the longer term, the RRF is expected to raise Croatia’s growth potential through several 
channels.  The  additional  investments  will  increase  the  capital  stock  in  the  economy  while 
requiring  additional  employment.  These  developments  will  raise  the  capital  and  labour 
contribution  to  potential  growth,  respectively.  Furthermore,  the  structure  of  investments  is 
expected to raise potential growth, mainly by improving productivity. Research and innovation 
investments  worth  EUR  320  million  are  set  to  benefit  competitiveness  and  productivity,  while 
the  funding  of  upskilling  vouchers  for  30,000  final  recipients  is  set  to  improve  the 
competitiveness of the workforce and reduce skills gaps and mismatches on the labour market. 
Moreover,  together  with  outreach  initiatives,  upskilling  should  help  raise  the  chronically-low 
activity rate as it is particularly focused on improving the employability of the most vulnerable 
beneficiaries.  Substantial  investments  in  education  will  enable  a  switch  to  one-shift  schooling, 
improving education outcomes.  Likewise, a positive effect  on human capital  in  the long run is 
expected to come from investments in the modernisation of facilities and processes in healthcare. 
Numerous investments  in  green and digital technologies and skills  are also  expected to  benefit 
the productivity of workforce and corporates and are in line with the EU update of the 2020 New 
Industrial  Strategy17.  Green  investments  should  increase  the  circularity  of  Croatia’s  economy, 
making it more sustainable and crowding-in additional investments over time. Similarly, digital 
investments  (e.g.  in  broadband  infrastructure)  will  enable  the  roll-out  of  existing  and  future 
technologies  to  new  areas  (particularly  rural)  and  applications.  Investments  in  transport  will 
positively  affect  exporters,  reduce  congestion  and  pollution  and  benefit  labour  mobility  and 

17  See  European  Commission,  Updating  the  2020  New  Industrial  Strategy:  Building  a  stronger  Single  Market  for 
Europe’s recovery, COM(2021) 350 final, 05.05.2021 

41 

 
 
                                                           
regional  links,  while  investments  in  clean  energy  and  carbon  capture  will  help  achieve  the 
emission reduction targets. 

Box 2. Stylised Next Generation EU impact simulations with QUEST – Croatia 

Model  simulations  conducted  by  the  Commission  using  the  QUEST  model  show  that  the 
economic impact of the NGEU in Croatia could lead to an increase of GDP of between 1.9% and 
2.9% by 2026.[1] After 20 years, GDP could be 1.1% higher. Spillovers account for a sizeable part of 
such impact.  

According  to  these  simulations,  this  would  translate  into  up  to  21,000  additional  jobs.  Cross 
border  (GDP)  spillovers  account  for  0.5  pps  in  2026,  showing  the  value  added  of  synchronised 
expenditure across Member States (line 2). Even in a scenario with lower productivity of NGEU funds, 
the impact is still significant (line 3).[2] 

This stylised scenario does not include the possible positive impact of structural reforms, which 
can be substantial. A model-based benchmarking exercise shows that undertaking structural reforms 
that  would  result  in  halving  the  gap  vis-à-vis  best  performers  in  terms  of  indicators  of  structural 
reforms  could  raise  Croatian  GDP  by  15%  in  20  years’  time,  more  than  the  11%  found  for  the  EU 
average, the difference reflecting Croatia’s relatively larger gaps vis-a-vis best performers . [3] 

Due  to  the  differences  in  the  assumptions  and  methodology,  the  results  of  this  stylised  assessment 
cannot be directly compared to the numbers reported in chapter 4 of Croatia’s RRP.  

Table Box.1: QUEST simulation results (%-deviation of real GDP level from non-NGEU case, linear 
disbursement assumption over 6 years) 

_____________ 
[1]  RRF  amounts  to  roughly  90%  of  NGEU,  which  also  includes  ReactEU,  Horizon,  InvestEU,  JTF,  Rural 
Development and RescEU. 
[2] Technically, the low productivity scenario considers a significantly reduced output elasticity of public capital. 
[3] Varga, J, in 't Veld J. (2014), “The potential growth impact of structural reforms in the EU: a benchmarking 
exercise ", European Economy Economic Papers no. 541.  
http://ec.europa.eu/economy_finance/publications/economic_paper/2014/pdf/ecp541_en.pdf. 

Meanwhile,  reform  measures  are  set  to  modernize  Croatia’s  economy  and  increase  its 
efficiency.  Reforms  benefitting  the  business  environment,  namely  the  reductions  in  para-fiscal 
charges and administrative burden, should free up resources of the private sector, benefitting its 
investment  and  output.  Liberalising  regulated  professions  will  increase  competition  in  the 
market,  benefitting  consumers  and  adding  jobs.  Anti-corruption  measures,  reductions  in  case 
backlogs  and  resolution  times  and  process  improvements  in  the  justice  system  are  expected  to 
positively affect investor confidence, making Croatia more attractive to inbound investments and 

42 

Scenario 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2040 Baseline 1.5 2.6 2.5 2.6 2.7 2.9 2.1 1.3 1.5 1.6 1.1   of which spillover 0.4 0.5 0.5 0.5 0.5 0.5 0.4 0.3 0.3 0.2 0.1 Low productivity 1.3 2.2 1.9 1.8 1.9 1.9 1.0 0.2 0.4 0.5 0.5   
 
 
know-how  transfer.  Professionalization  and  efficiency-increasing  reforms  in  the  public 
administration  will  benefit  citizens  and  businesses  and  reduce  the  upward  pressure  on  public 
spending  as  a  means  to  improve  the  quality  of  public  services.  The  divestment  of  ownership 
stakes  will  shift  more  factors  of  production  from  the  less  productive  public  sector  to  the  more 
productive private sector, which should help increase Croatia’s low allocative efficiency. 

In  sum,  the  implementation  of  the  recovery  and  resilience  plan  will  boost  economic 
recovery  in  an  inclusive  way  and  address  the  weaknesses  of  Croatia’s  economy  in  the 
longer term. The implementation of the investments and reforms in the plan will help address 
Croatia’s key economic weaknesses – its comparatively low employment and growth potential. 
In  the  short  run,  the  sheer  volume  of  investments  will  mechanically  translate  into  stronger 
growth  and  job  creation.  In  the  medium  and  long  run,  those  effects  will  be  bolstered  by  the 
positive  spill-over  effects  stemming  from  the  structure  of  investments  (i.e.  type  and  quality  of 
projects) and a positive impact of reforms on productivity and value creation. At the same time, 
the  investments  should  not  contribute  to  new  debt,  thus  preserving  the  soundness  of  Croatia’s 
public finances and supporting the unwinding of Croatia’s macroeconomic imbalances related to 
high external debt. 

Strengthening social cohesion 

The plan features substantial measures aimed at improving the employability of the most 
vulnerable  persons,  thus  reducing  social  exclusion  and  poverty.  The  risk  of  poverty  and 
social exclusion in Croatia is closely linked to unemployment and inactivity. As reflected in the 
very low share of Croatian citizens in work that are at risk of poverty (5.1%), transitioning into 
employment  is  a  very  effective  pathway  out  of  poverty  and  social  exclusion.  For  this  reason, 
some of the most important measures with a social impact in the Croatian recovery and resilience 
plan are active labour market policies (ALMPs). The ALMPs introduced and funded by the plan 
are  the  support  grants  for  employment,  self-employment  and  traineeships  in  green  and  digital 
areas and vouchers to finance upskilling. Importantly, both measures feature a special focus on 
the  most  vulnerable  groups.  Similarly,  the  plan  commits  the  Croatian  Public  Employment 
Service  to  conduct  outreach  activities  tailored  towards  those  farthest  away  from  the  labour 
market and re-orient its working processes to better fit the needs of people with multiple barriers 
to  employment. The plan also  features policies to foster transition  from undeclared to declared 
work in a way that protects workers’ rights. All of these features should maximise the effect of 
employment-related measures on improving social cohesion. 

At  the  same  time,  the  plan  features  measures  directly  aimed  at  countering  poverty  and 
social  exclusion  from  inactivity  and  unemployment  and  among  pensioners.  The  plan 
commits  to  both  increasing  the  adequacy  and  broadening  the  coverage  of  the  Guaranteed 
Minimum  Benefit,  the  key  benefit  designed  to  reduce  poverty.  Similarly,  the  amount  of  the 
unemployment  benefit  will  be  increased  and  its  duration  prolonged.  Furthermore,  social 
mentorship will be developed to cater for the most disadvantaged persons, including long-term 
unemployed, people with disabilities, victims of violence, homeless people, migrants, Roma, ex-
convicts  and  others.  The  aim  of  this  measure  will  be  to  integrate  the  final  recipients  in  the 
community,  reduce  their  social  exclusion  and  improve  their  employability  through  an 

43 

 
 
individualised approach. When it comes to people beyond working age, the plan commits to an 
increase in the minimum pension of at least 3% in real terms  and an increase in the survivor’s 
pension between 10% and 15%. 

Investments in social infrastructure coupled with strengthened deinstitutionalisation efforts 
will improve the quality of social services. Investments in new early childhood education and 
care  (ECEC)  will  improve  access  to  ECEC  and  investments  in  primary  school  capacities  are 
expected to improve the quality of education, positively affecting outcomes for children, but also 
indirectly  activity  rates  among  women.  The  plan  also  commits  to  developing  a  strategic 
framework  for  accessible  care  for  the  elderly  and  the  development  of  community  services  to 
prevent  institutionalisation  and  advance  long-term  care.  Meanwhile,  new  elderly  care  facilities 
will be financed for the provision of care for elderly people who depend entirely on institutional 
care and whose needs cannot be provided through out-of-institutional services.  

Reducing vulnerability and increasing resilience 

The  nature  of  investments  in  the  plan  is  conducive  to  reducing  Croatia’s  reliance  on  the 
non-tradable  sector.  One  of  the  main  structural  vulnerabilities  of  Croatia’s  economy  is  the 
composition  of  its  current  account  flows,  which  rely  strongly  on  proceeds  from  tourism.  This 
vulnerability materialised in 2020, as illustrated by the decline in output which was particularly 
steep  compared  to  peers  because  the  COVID-19  crisis  has  been  especially  detrimental  to  the 
tourism  sector  (see  section  2.1).  Similarly,  investments  have  historically  been  biased  towards 
non-tradable  sectors  (retail  trade,  finance,  tourism).  To  reduce  the  reliance  on  the  non-tradable 
sectors,  it  is  essential  to  create  conditions  for  strong  growth  in  the  tradable  sectors  of  the 
economy. Of vital importance to that end are the substantial investments (including considerable 
grants  for  private  investments)  in  green  and  digital  technologies  and  skills,  research  and 
innovation  capacity,  transport  and  energy.  All  of  those  investments  should  strengthen  the 
competitiveness  of  manufacturing  firms,  enabling  a  continuation  of  strong  goods  exports 
performance  witnessed  after  Croatia’s  EU  accession.  Moreover,  investments  in  agriculture 
infrastructure  should  enable  productivity  gains  which  are  crucial  for  this  tradable  sector 
characterized by low added value.  

Similarly,  reforms  are  expected  to  improve  the  environment  for  the  tradable  sector  to 
excel. Reforms that cut red tape and reduce the financial burden on businesses disproportionately 
benefit small and medium enterprises, as they free up a relatively big share of their resources. As 
such, those reforms  are  conducive  to  exports growth  on the extensive margin  (i.e., driven by  a 
growing number of exporting firms). At the same time, reforms that strengthen the science base 
and  research  and  innovation  capacity  benefit  the  pockets  of  excellence  within  the  economy, 
nurturing  growth  of  exported  goods  on  the  intensive  margin  (i.e.,  driven  by  existing  exporters 
increasing  the  volume  of  their  exports).  Finally,  reforms  that  strengthen  institutions  and  the 
judiciary  create  a  better  environment  to  invest  in  tradable  sectors,  as  they  reduce  the  risk 
premium (easier to offset in case of investments in non-tradable sectors, which tend to be more 
strongly collateralized).  

44 

 
 
The  implementation  of  the  plan  is  expected  to  help  increase  social  and  institutional 
resilience  of  the  country.  Investments  in  the  healthcare  sector  are  aimed  to  improve  hospital 
infrastructure,  strengthen  their  governance  and  improve  the  framework  for  public  health  and 
emergency medicine. All of these aspects are important for reinforcing the capacity of Croatia’s 
healthcare  system  to  respond  to  shocks  the  likes  of  the  COVID-19  pandemic.  Investments  in 
energy infrastructure will enable Croatia to rely more on its own energy sources, thus improving 
its  energy  security.  Social  and  labour  market  policies  aimed  at  fighting  poverty,  protecting 
people out of work and increasing their employability are essential to increase the resilience of 
social structures and institutions. Reforms related to anti-money laundering, anti-corruption and 
strengthening of the justice system, improvements in public administration and SOE governance 
strengthen the rule of law and institutional resilience. 

Cohesion and convergence 

The  plan  is  expected  to  support  the  reduction  of  economic  and  social  inequalities  and 
territorial disparity. A substantial share of measures include provisions and considerations that 
specifically cater to the disadvantaged groups in society. The most prominent examples include 
commitments to improve the adequacy and broaden the coverage of social benefits towards the 
most  vulnerable  citizens,  to  focus  upskilling  measures  and  outreach  activities  on  those  farthest 
away from the labour market and to increase the minimum pension. Meanwhile, several sizable 
investments will particularly benefit remote and less developed areas. Notable examples include 
investments  in  rail  infrastructure,  island  connectivity  and  energy  production  (biorefinery). 
Substantial  investments  in  agriculture  infrastructure  will  help  increase  the  productivity  and 
competitiveness of farmers, who are most concentrated in the disadvantaged eastern part of the 
country,  which  has  also  been  hit  hardest  by  outward  migration  in  recent  years.  Furthermore, 
investments  in  reconstruction  and  energy  efficiency  of  buildings  damaged  in  the  2020 
earthquakes  will  benefit  five  counties,  of  which  three  (Sisak-Moslavina,  Krapina-Zagorje  and 
Karlovac) are among the least developed ones. Moreover, energy efficiency gains benefit lower-
income households the most, since energy costs represent a disproportionately high share of their 
consumption. Residents in remote areas, including islands, will also benefit from the introduction 
of mobile clinics and pharmacies aimed to improve access to healthcare. 

In  addition  to  investments,  reforms  are  expected  to  increase  the  speed  of  Croatia’s 
convergence with the EU. The obstacles that hold back Croatia’s rate of catching-up with the 
EU  countries  are  the  same  obstacles  that  undermine  its  potential  growth.  Most  notably,  they 
include  low  activity  and  employment  rates,  economic  frictions  stemming  from  restrictive 
regulations and an extensive presence of the state in the economy which results in low allocative 
efficiency of the factors of production. Low employment and activity rates have in part been due 
to  weak  job  creation  and  in  part  due  to  skills  gaps  and  mismatches  in  the  labour  market.  Job 
creation has been on the rise in the several years before the pandemic and is expected to resume 
as  the  economy  recovers  and  the  Recovery  and  Resilience  Facility  investments  materialise. 
Furthermore,  the  economy  should  add  jobs  as  reforms  increase  competition  in  the  market  and 
free up resources of the more productive private sector. Meanwhile, active labour market policies 
should  help  reduce  skills  gaps  and  mismatches.  Finally,  the  aforementioned  positive  impact  of 

45 

 
 
reforms  on  productivity  should  contribute  to  lifting  the  growth  potential  through  the  TFP 
contribution, allowing Croatia to increase its rate of convergence. 

Taking  into  consideration  all  reforms  and  investments  envisaged  by  Croatia,  its  recovery  and 
resilience  plan  is  expected  to  have  a  high  impact  on  strengthening  the  growth  potential,  job 
creation,  and  economic,  social  and  institutional  resilience,  to  effectively  contribute  to  the 
implementation  of  the  European  Pillar  of  Social  Rights,  including  through  the  promotion  of 
policies for children and youth, and to effectively mitigate the economic and social impact of the 
COVID-19  crisis,  thereby  enhancing  the  economic,  social  and  territorial  cohesion  and 
convergence within the Union. This would warrant a rating of A under the assessment criterion 
2.3 of Annex V to the RRF Regulation. 

46 

 
 
Box 3: Employment and social challenges in light of the Social Scoreboard accompanying 
the European Pillar of Social Rights 

The Social Scoreboard supporting the European Pillar of Social Rights identifies a number of employment 
and social challenges in Croatia. Despite overall improvements - observed until 2020, including the reduction of 
the unemployment and long-term unemployment rates, challenges related to the labour market, as well as social 
protection and inclusion, remain and are further emphasized by the COVID-19 crisis. The employment rate is still 
critically low, in particular among young people, older workers, the low skilled and persons with disabilities. The 
rate  of  young  people  not  in  employment,  education  or  training  (NEET)  increased  again  in  2020.  There  are 
concerns  regarding  the  effectiveness  of  active  labour  market  policies  and  the  remaining  pathways  to  early 
retirement. The share of early school leavers in Croatia is well below the EU average. Nonetheless, access to and 
quality of education and training for young people and adults remain a challenge. Low participation of children 
aged  less  than  3  years  in  formal  childcare  is 
particularly critical and further deteriorated in 2019. 
Participation  in  early  childhood  education  from  the 
age of 3 to compulsory education is also low, though 
it  is  improving.  The  number  of  early  leavers  from 
education  and  training  is  the  lowest  in  the  EU,  but 
basic skills and tertiary education attainment are low 
with significant gender gaps. 

impact  of  social  transfers  on  poverty 
The 
reduction remains limited. While poverty has been 
gradually  decreasing  in  the  years  before  the  crisis, 
the pandemic may reverse this trend. In 2019, the at 
risk  of  poverty  or  social  exclusion  rate  was  still 
above the EU average (23.3% vs 20.9% in the EU) 
and  the  rate  of  people  persistently  exposed  to 
poverty  remained  high.  The  elderly,  persons  with 
disabilities  and  those  living  in  jobless  households 
are  relatively  more  exposed  to  poverty  risks.  Both 
the  coverage  and  adequacy  of  the  unemployment 
benefit  scheme  remain  low.  The  poverty  reduction 
capacity of  minimum income benefits is also  weak. 
Overall,  the  poverty  reduction  capacity  of  social 
transfers in 2019 further deteriorated (0.2pps).  

social 

relevant 

challenges 

The  recovery  and  resilience  plan  submitted  by 
Croatia  addresses  a  multitude  of  employment 
and 
the 
implementation  of  the  Pillar.  To  foster  equal 
opportunities  and  access  to  the  labour  market,  the 
plan envisages a new strategy for adult learning and 
a  modernisation  of  the  upskilling  and  reskilling 
system. The reform would redesign and upgrade the 
current  fragmented  programmes,  establishing  new 
curricula  linked  to  labour  market  needs  and  an 
assessment  framework  for  the  providers  of  upskilling  programmes.  To  improve  labour  market  dynamics  and 
working  conditions,  Croatia  also  plans  significant  investments  in  ALMPs  that  will  complement  activation 
programmes  supported  by  the  ESF.  Although  the  proposed  investments  also  target  the  inactive  population  and 
those  facing  multiple  employment  barriers,  the  need  to  develop  a  comprehensive  activation  strategy  remains 
relevant.  In  this  sense,  an  integrated  approach  to  providing  employment  and  social  services  should  be 
strengthened.  The  aforementioned  measures  would  also  be  complemented  by  a  labour  law  reform  aimed  at 

for 

47 

 
 
improving  the  labour  market  functioning,  including  via  the  establishment  of  a  framework  to  fight  undeclared 
work.  

With  more  people  likely  to  fall  back  on  the  basic  safety  nets  due  to  the  COVID-19  crisis,  reforms  of  the 
social protection and inclusion systems are important in order to provide much needed support, in synergy 
with ESF funding. The plan includes various interventions in the social area, aimed, among others, at expanding 
access  to  early  childhood  education  and  care,  developing  digital  solutions  to  exchange  data  on  social  benefits, 
introducing social mentoring services to promote employment and social inclusion and increasing long-term care 
capacity. However, the interventions lack an overall strategic framework and ambition for strengthening access to 
and adequacy of social benefits and services and improving the efficiency of the current complex system of social 
protection.  Reform  proposals  aimed  at  tackling  the  critically  low  adequacy  of  pensions  are  expected  to  induce 
only a limited positive impact. 

4.4. The principle of ‘do no significant harm’  

The RRF Regulation provides that no measure included in the recovery and resilience plan 
should  lead  to  significant  harm  to  any  of  the  six  environmental  objectives  within  the 
meaning of Article 17 of the Taxonomy Regulation18. In line with the RRF Regulation and the 
Technical  Guidance  on  the  Application  of  ‘do  no  significant  harm’19  (‘DNSH  Technical 
Guidance’),  Member  States  provide  a  ‘do  no  significant  harm’  (DNSH)  assessment,  on  which 
basis  the  Commission  assesses  whether  the  plan  is  expected  to  ensure  that  no  measure  does 
significant  harm.  DNSH  compliance  is  therefore  a  necessary  condition  for  the  Commission  to 
positively  assess  the  recovery  and  resilience  plan.  Croatia  has  included  a  detailed  DNSH 
assessment for each measure included in its plan in accordance with the template provided by the 
Commission,  and  in  line  with  the  DNSH  Technical  Guidance.  The  Commission  has  assessed 
whether and how each measure in the Croatian plan complies with DNSH on that basis. 

Croatia demonstrated compliance with the DNSH principle by only selecting or designing 
measures  complying  with  DNSH,  and  by  fully  substantiating  compliance  as  part  of  the 
DNSH assessment.  By selecting measures that either contribute substantially to environmental 
objectives,  such as those on reforestation, or have no or an insignificant  foreseeable impact  on 
environmental  objectives  (such  as 
labour  market,  social  policy,  or  public 
administration), many measures in  the Croatian  plan can be  considered  DNSH compliant from 
the  outset.  Other  measures  are  designed  to  ensure  compliance  with  DNSH,  directly  or  by 
requiring specific evidence and commitments through milestones and targets to substantiate that 
they will not lead to significant harm to environmental objectives. 

those  on 

A summary of the most relevant issues is presented hereafter. 

18  The  six  environmental  objectives  comprise  (1)  climate  change  mitigation,  (2)  climate  change  adaptation,  (3) 
sustainable use and protection of water and marine resources, (4) the circular economy, (5) pollution prevention and 
control, and (6) protection and restoration of biodiversity and ecosystems.  
19 2021/C58/01 

48 

 
 
                                                           
DNSH-compliant  measures  facilitate  the  green  transition  with  investments  in  the  energy 
and transport segments  of the Croatian economy. The self-assessment clarified compliance, 
in  particular  for  investments  in  the  energy  component  1.2,  where  the  upgrading  of  the  high-
voltage network will enable a larger supply of renewable energy, and the submarine cables will 
be  laid,  or  the  distribution  network  will  be  upgraded.  In  addition,  sensitivity  mapping  of  the 
renewable energy sources investment  will ensure that infrastructure placed within Natura 2000 
protected areas complies with applicable environmental rules and the biorefinery is based on the 
sustainable  sourcing  of  biomass  according  to  the  criteria  of  the  recast  Renewable  Energy 
Directive. For the development of two CO2 capture and geological storage facilities in Croatia, 
the  authorities  have  committed  to  thoroughly  analyse  the  possible  environmental  implications, 
and  to  exclude  that  technologies,  facilities  or  equipment  are  engineered  towards  enhanced  oil 
recovery, while ensuring that any possible extraction of oil or gas is limited to the indispensable 
needs  of  managing  pressure  and  ensuring  safety  of  the  storage  sites.  For  exploring  geothermal 
potential,  the  authorities  have  confirmed  that  project  will  not  include  any  exploration  or 
extraction  of  either  oil  or  gas,  and  it  shall  be  ensured  that  geothermal  drilling  would  have  no 
harmful impact on water scarcity and water quality, nor any methane releases. In component 1.4, 
investment  in  public transportation vehicles has  been limited to  electric  and hydrogen vehicles 
and vessels, and the investments at the Zadar airport has been focused on the provision of fixed 
electrical  connections  to  stationary  aircraft,  replacement  of  diesel-fuelled  ground  handling 
equipment and construction of photovoltaic power plant and charging stations. This measure will 
contribute  to  the  overall  reduction  of  the  greenhouse  gases.  A  reform  and  investments  of  the 
railway  sector  under  component  1.4  include  investing  in  removing  bottlenecks  in  the  railway 
sector,  as  well  digitalising  and  electrifying  the  railway  lines.  Also,  railway  investments  in  the 
TEN-T core network and suburban rail, interventions in the rail infrastructure, including projects 
on the TEN-T core network and on suburban rail, are also meant to modernise and electrify the 
network, which support switching from road to rail and in that way contribute to the reduction of 
the CO2 emissions.  

Measures related to the construction and reconstruction of buildings as well as to the water 
and  waste  management  are  also  contributing  to  the  green  transition  and  are  DNSH-
compliant.  For  the  construction  and  renovation  of  residential  and  public  buildings  (under  the 
Renovation of buildings initiative, and the components Judicial system, Research and innovation, 
Labour market and Healthcare and long-term care), the respect of the principle will be ensured 
through  compliance  with  the  minimum  requirements  in  the  Energy  Performance  of  Buildings 
Directive  and  respecting  the  circular  economy  principles  when  it  comes  to  construction  waste. 
This  is  achieved  by  ensuring  that  70%  of  the  construction  waste  will  be  recycled.  For  water 
measures included in component 1.3, compliance with the DNSH principle will be ensured inter 
alia  by  requiring  that  any  work  regarding  flood  protection  investments  prioritises  nature-based 
solutions  and  is  in  line  with  the  Water  Framework  Directive.  Lastly,  compliance  of  the 
investment  into  a  Medical  Waste  Facility  in  Clinical  Hospital  Centre  (KBC)  Zagreb  shall  be 
assured by treatment of only non-recyclable hazardous medical waste generated on site, as well 
as continuous facility emissions monitoring and assuring no impact on air quality, non-recyclable 
hazardous medical waste generated on site, as well as continuous facility emissions monitoring 
and assuring no impact on air quality.  

49 

 
 
The  Croatian  plan  includes  measures  of  a  horizontal  nature,  which  are  designed  to  be 
DNSH  compliant.  As  set  out  in  the  DNSH  Technical  Guidance,  measures  of  a  more  general 
nature,  such  as  broad  industry  support  schemes  (e.g.,  financial  instruments  facilitating 
investments by companies across multiple sectors) and research and innovation support schemes, 
should be designed to  ensure adherence of the relevant  investments  with DNSH. The Croatian 
plan  contains  such  broad  measures,  such  as  financial  instruments,  providing  guarantees  and 
affordable  loans  and  equity  funding  to  companies,  or  measures  to  support  the  development  of 
innovative products and services. For these – as for other more specific measures – Croatia will, 
inter alia, apply selection criteria that are based on an exclusion list that excludes from support 
investments related to:  

fossil fuels,  

 
  activities  under  the  ETS  with  projected  CO2  equivalent  emissions  that  are  not 

 

 

substantially lower than the relevant benchmarks established for free allocation, 
investments  in  facilities  for  the  disposal  of  waste  in  landfill,  in  mechanical  biological 
treatment (MBT) plants, and  
incinerators  for  the  treatment  of  waste,  and  activities  where  the  long-term  disposal  of 
waste may cause long-term harm to the environment.  

Through this approach, Croatia ensures that the broad measures included in the plan are DNSH 
compliant. 

Taking  into  consideration  the  assessment  of  all  the  measures  envisaged,  no  measure  for  the 
implementation  of  reforms  and  investments  projects  included  in  Croatia’s  recovery  and 
resilience  plan  is  expected  to  do  a  significant  harm  to  environmental  objectives  within  the 
meaning  of  Article  17  of  Regulation  (EU)  No  2020/852  (the  principle  of  ‘do  no  significant 
harm’). This would warrant a rating of A under the assessment criterion 2.4 of Annex V to the 
RRF Regulation. 

4.5. Green transition 

Climate target  

Croatia’s  recovery  and  resilience  plan  correctly  follows  the  methodology  for  climate 
tracking in accordance with Annex VI to the Regulation, by identifying intervention fields 
and corresponding coefficients for calculation of support to climate change objectives, for 
relevant investment measures.  In cases where the selected intervention field includes specific 
conditions  to  justify  the  climate  contribution,  those  are  explained  in  the  description  of  the 
measure and reflected in the milestones and targets for the relevant component. In particular, this 
has been done for investments regarding the energy renovation of buildings, construction of new 
energy-efficient buildings, green horizontal schemes for support to SMEs and large enterprises, 
and water supply investments compliant with energy-efficient criteria.  

To ensure that the climate contribution of certain measures is not overestimated, Croatia 
split the measures into sub-measures to the extent possible, with relevant intervention field 
for each sub-measure. In such cases, Croatia provided a weighted average of the contribution to 

50 

 
 
 
 
the climate objectives for the relevant measure, in line with required methodology. Consistently 
with  the  latter,  Croatia  excluded  from  the  climate  tracking  the  costs  for  seismic  or  static 
renovation of buildings (the plan’s initiative of building renovation). The plan does not propose 
any increased climate coefficient for any measure.  

As  an  exceptional  case,  two  different  intervention  fields  for  climate  tracking  and  digital 
tagging have been selected for the investment related to autonomous electric vehicles. This 
has been applied due to the fact that no single intervention field that reflects the contribution to 
both climate and digital objectives could have been applied, and as the measure is considered as 
fully contributing to both climate and digital objectives.  

Overall,  the  recovery  and  resilience  plan  contributes  to  climate  objectives  for  40.3%  of 
Croatia’s  allocation  of  EUR  6.3  billion,  and  the  climate  target  of  37%  is  therefore 
considered  to  have  been  met.  The  most  significant  contributions  to  the  climate  target  are 
provided by measures under the Components 1 and 6 of the plan. In particular, the plan allocates 
(i) more than EUR 147 million for horizontal investment schemes to support green investments 
in  business;  (ii)  EUR  418  million  to  promote  the  deployment  of  renewables  by  upgrading  the 
electricity grid and investing in geothermal energy for district heating; (iii) EUR 165 million to 
promote alternative fuels by constructing a plant for production of advanced biofuels, as well as 
renewable hydrogen production capacity and corresponding infrastructure; (iv) EUR 217 million 
to improve flood protection and access to drinking water; (v) EUR 228 million to upgrade and 
digitalise TEN-T rail infrastructure; (vi) EUR 135 million for development of green skills; and 
(vii)  EUR  625  million  for  energy  efficiency  renovation  of  buildings.  In  addition,  important 
investments  contributing  to  the  climate  target  include  the  construction  of  energy-efficient 
buildings in various sectors, as well as investments into sustainable mobility for modernisation of 
vehicles and vessels. 

Green transition  

The  plan  allocates  a  significant  part  of  reforms  and  investments  to  the  objective  of 
addressing  the  challenges  of  the  green  transition.  Planned  measures  are  aligned  with  the 
National  Energy  and  Climate  Plan  and  aim  at  being  complementary  with  the  future  Territorial 
Just Transition Plans. As such, they are expected to directly contribute to the EU’s 2030 climate 
targets  and  2050  climate  neutrality  objective.  Specific  measures  are  expected  to  contribute  to 
meeting  national  and  EU’s  targets  for  environmental  policy,  directly  focusing  on  waste 
management,  water  supply  and  wastewater  treatment,  flood  protection,  sustainable  mobility, 
sustainable food systems and biodiversity protection.  

The  planned  contribution  to  the  climate  and  environmental  objectives  from  the  Facility 
amounts to EUR 3.3 billion. Component 1 (Economy) and initiative 6 (Building renovation) are 
primarily  focused  on  green  transition,  while  individual  measures  in  other  components  further 
contribute to addressing the green transition objectives. The planned reforms and investments are 
expected to contribute to the objectives of the European Green Deal, and will support Croatia’s 
green transition  and sustainable economic recovery. The plan addresses the main sustainability 
challenges faced by Croatia. 

51 

 
 
 
 
 
 
 
 
Climate and energy 

The Croatian recovery and resilience plan puts substantial focus on the climate and energy 
transition. In particular, proposed measures address some key policy challenges, in line with the 
Commission’s  recommendation  on  the  National  Energy  and  Climate  Plan.  The  plan  includes 
important reforms and investments to promote (i) energy efficiency, (ii) renewable energy, and 
(iii) sustainable mobility. Mature investment projects will be frontloaded as much as possible, as 
well as key enabling reforms, such as those addressing investment barriers to renewables.  

The  plan  includes  a  dedicated  initiative  for  the  energy-efficiency  renovation  of  buildings 
(Initiative - Renovation of buildings), in the context of post-earthquake reconstruction. Measures 
include various types of buildings, including both residential and public buildings, such as health 
and educational facilities, as well as buildings with the status of a cultural good. Post-earthquake 
renovation  investments  will  be  complementary  to  ongoing  earthquake  reconstruction  activities 
supported  by  the  Solidarity  Fund.  In  total,  RRF  funds  will  support  the  renovation  of  at  least 
225,000  m2  of  private  building  stock,  522,000  m2  of  public  buildings  and  31,000  m2  of 
buildings with  a status  of a  cultural  good. The investments  will achieve on average  at  least  an 
increase  of  30%  primary  energy  savings  compared  to  the  pre-renovation  state.  The  building 
renovation  initiative  will  directly  contribute  to  the  Renovation  Wave.  In  terms  of  enabling 
reforms  supporting  the  reduction  of  energy  consumptions  and  greenhouse  gas  emissions  in 
buildings,  the  plan  includes  a  pilot  project  for  the  establishment  of  an  energy  management 
system that should contribute to the development of a new financing model for the renovation of 
the public building stock, as well as tailored support to develop workforce skills in the context of 
the post-earthquake reconstruction and energy efficiency renovations. 

In addition, the plan includes investments for construction and reconstruction of energy-efficient 
buildings  in  various  sectors,  including  education,  judiciary  and  social  infrastructure.  The  plan 
contains some measures to address energy poverty. The plan includes further energy efficiency 
measures,  such  as  schemes  to  promote  energy  efficiency  in  industrial  processes  (component 
1.2.), as well as energy efficiency measures and uptake of green technologies in SMEs and large 
enterprises (components 1.1. and 1.6).  

It  is  expected  that  the  plan  will  substantially  contribute  to  the  reductions  of  final  and 
primary energy consumption, in line with the NECP objectives and 2030 energy efficiency 
targets.  The  energy  efficiency  measures  in  building  renovation  and  industrial  processes  will 
support this contribution, although the total expected energy savings from these measures are not 
quantified  at  this  point.  However,  further  investments  in  building  renovations  and  energy 
efficiency  would  be  needed  in  the  next  years  to  deliver  on  the  objectives  set  out  in  the  2030 
National  Energy  and  Climate  Plan  and  the  Long-Term  Renovation  Strategy.  In  particular, 
additional  efforts  will  be  needed  in  order  to  leverage  additional  private  capital  for  building 
renovations  and  energy  efficiency  measures  in  industrial  processes,  and  to  uphold  the  Energy 
Efficiency First principle.  

On  renewable  energy,  the  legislative  reforms  proposed  will  address  administrative  and 
regulatory  obstacles  to  unlock  Croatia’s  potential  for  renewable  energy,  especially  in  the 
southern  part  of  the  country.  Investments  include  upgrade  of  the  electricity  grid  to  enable 

52 

 
 
 
 
 
 
 
additional  1,500MW  of  RES  capacity  to  be  connected  to  the  grid.  The  plan  does  not  contain 
specific  measures  to  increase  the  deployment  of  wind  or  solar  energy,  but  aims  to  provide  a 
stable  legislative  framework  for  potential  investors,  by  introducing  a  premium  system  for  the 
support  of  investment  in  renewables,  outlining  a  long-term  investment  plan  and  mapping  of 
potential RES locations, taking into account the potential impact on Natura2000 protected sites. 
Upgrades to the grid will be complemented by increased deployment of smart meters, which will 
enable  further  development  of  an  active  role  of  customers  in  the  energy  market.  Renewed 
connections of 6 islands to the mainland grid will improve their energy security, in line with the 
recommendations made in the European Commission’s assessment of Croatia’s National Energy 
and Climate Plan  (NECP) to  support efficient investments  in  infrastructure for national  energy 
security  goals20.  The  plan  also  addresses  the  need  to  increase  the  share  of  renewables  in  the 
heating and cooling sector, focusing on deployment of geothermal energy in district heating. 

The  plan  entails  comprehensive  reforms  and  investments  to  increase  the  contribution  of 
renewables, specifically in the transport sector. The plan includes the adoption of a legislative 
framework to promote the production and use of advanced biofuels in transport, with a dedicated 
strategy  to  foster  development  of  hydrogen.  These  reforms  are  complemented  by  major 
infrastructure  investments:  construction  of  a  biorefinery  with  annual  production  capacity  of 
55,000  tonnes  of  advanced  bioethanol;  first  production  of  renewable  hydrogen  based  on 
electrolysis;  as  well  as  introduction  of  hydrogen  charging  stations  across  the  country.  These 
investments  will  make  a  substantial  contribution  to  Croatia’s  target  to  achieve  a  14%  share  of 
renewables in the transport energy mix by 2030, while also contributing to the creation of green 
jobs in a lagging region.    

The  plan  addresses  the  main  challenges  of  sustainable  mobility  transition,  supporting 
infrastructure  development  of  low-carbon  transportation  modes.  In  the  rail  sector,  major 
investments  are  targeted  towards  modernisation  and  electrification  of  TEN-T  rail  network,  in 
order  to  accelerate  the  modal  shift  from  road  to  rail.  For  example,  the  plan  entails  the 
reconstruction and electrification of the 22 km railway section Dugo Selo - Novska, sub-section 
Kutina  -  Novska  (EUR  140.7  million),  along  the  TEN-T  rail  network  and  the  Alpine-Western 
Balkans rail-freight corridor.  

The plan includes dedicated measures to decarbonise public transport, in road and coastal 
traffic. The plan focuses on improving public transport in the City of Zagreb, with the flagship 
activity  to  develop  autonomous  electric  taxis,  as  a  part  of  a  new  urban  mobility  ecosystem. 
Support will be provided for the purchase of electrical and hydrogen-powered buses for public 
transport, as well as zero-emission passenger ships.  

20  Communication  from  the  Commission  to  the  European  Parliament,  the  Council,  the  European  Economic  and 
Social Committee and the Committee of the Regions. United in delivering the Energy Union and Climate  Action. 
Setting the foundations for a successful clean energy transition. COM/2019/285 final.   

53 

 
 
 
 
                                                           
The plan includes actions to accelerate the electrification and digitalisation of road and air 
transport. For example, the plan includes the deployment of 1,300 charging stations for electric 
vehicles, incentives for the purchase of 2,000 cleaner vehicles through support schemes, and the 
launch  of  an  electronic  toll  system  for  motorways  (EUR  65.5  million)  which  is  expected  to 
reduce heavy congestion and waiting time at toll stations, reducing emissions and air pollution. 
Investments  in  Zadar  airport  will  install  fixed  electrical  connections  to  stationary  aircraft, 
provide  electrically  powered  aircraft  ground  handling  equipment  and  promote  the  use  of 
renewable energy sources, leading to a reduction of greenhouse gas emissions and environmental 
footprint of the transport sector.  

In  terms  of  new  technologies  contributing  to  climate  mitigation,  the  plan  contains  two 
investments  for  carbon  capture  and  geological  storage.  Two  pilot  projects  will  be  able  to 
capture over 240,000t of CO2 annually, directly contributing to national  GHG reductions from 
industrial  processes.  At  the  same  time,  those  will  serve  as  example  projects  for  use  of  CCS 
technology in the EU, facilitating greater CCS deployment in the next decade.  

The plan also contains adaptation measures that aim to increase resilience towards climate 
change.  These  focus  on  addressing  the  risk  of  floods,  as  one  of  main  climate-related  risks  for 
Croatia. In particular, the plan envisages the construction of protective structures to prevent flood 
risks, prioritising investments into nature-based solutions and green infrastructure to the greatest 
extent.  As  a  result  of  these  investments,  additional  20,000  people  are  expected  to  be  protected 
from  flood  risks.  In  addition,  component  1.3  includes  extensive  investments  into  water  supply 
network  and  water  metering  devices  with  specific  targets  to  reduce  water  losses,  which  will 
directly contribute to preservation of water resources.  

Environmental policies 

The  plan  contains  considerable  reforms  and  investments  that  contribute  to  the  EU 
environmental  policies,  focusing  on  water  management  and  the  circular  economy. 
Component 1.3 includes a major reform of the water sector, aggregating fragmented water utility 
companies at the municipal level. This will result in improved operational efficiency and better 
governance  of  these  companies,  including  a  new  benchmarking  system.  The  plan  includes 
substantial  infrastructure  investments  to  upgrade  water  and  wastewater  systems,  as  well 
construction  of  new  wastewater  treatment  plants,  aiming  to  reduce  compliance  gap  with  the 
requirements  of  the  Urban  Wastewater  Treatment  Directive.  Specific  measures  and  targets  are 
dedicated  to  reduction  of  water  losses.  A  detailed  investment  plan  of  water  and  wastewater 
investments  will  be  prepared,  to  ensure  prioritisation  of  mature  and  urgent  projects,  as  well  as 
ensure coherence with other funding sources, notably European Regional Development Fund. As 
a result, 45,000 people will have improved access to drinking water, while 200,000 people will 
benefit from improved wastewater services.   

The  plan  also  includes  reforms  and  investments  to  improve  waste  management  and 
accelerate  the  shift  to  circular  economy  (component  1.3).  A  planned  reform  will  set  up  a 
legislative  framework  with  specific  measures,  including  development  of  a  circular  economy 
roadmap,  new  extended  producer  responsibility  (EPR)  and  pay-as-you-throw  schemes.  New 
waste management plans will commit to quantified targets for waste recycling, sorting, reusing 

54 

 
 
 
 
 
and repairing; as well as consider dedicated activities at local level to support the transition to the 
circular  economy, such  as potential of digital  technologies. Substantial  funding is  allocated for 
new  infrastructure  that  would  reduce  the  share  of  waste  sent  to  landfills,  including  recycling 
facilities and waste sorting centres. Investments also include remediation of 10 closed landfills.  

The  plan  includes  investments  to  promote  the  circular  economy  in  the  agriculture  sector 
(component  1.5).  A  logistics  infrastructure  network  for  the  fruit  and  vegetables  sector  will  be 
established,  and  the  capacity  of  the  food  donation  chain  will  be  strengthened,  effectively 
contributing to the reduction of food waste. It also contains a smart farming component, which 
has  the  potential  to  reduce  the  ecological  footprint  of  farming  (e.g.,  minimised  or  site-specific 
application  of  inputs,  such  as  fertilisers  or  pesticides,  in  precision  agriculture  systems  will 
mitigate potential water pollution problems as well as emissions of greenhouse gases) 

The  Croatian  recovery  and  resilience  plan  includes  dedicated  measures  to  support 
biodiversity protection and restoration. Within component 1.3, the plan includes investments 
to  restore  rivers,  floodplains  and  lakes  (e.g.  Vransko  lake  and  Trakoscan  lake),  as  well  as 
eliminate  invasive  species  in  sensitive  area  of  Neretva  delta.  These  investments  will  improve 
river  habitats  as  well  as  overall  ecosystem  in  those  areas.  All  the  measures  of  the  plan  will 
comply with EU and national requirements for protection of biodiversity. For example, reform of 
agricultural land consolidation (component 1.5) envisages that each project of land consolidation 
will  be  subject  to  an  environmental  impact  assessment  in  relation  to  the  protection  and 
restoration of biodiversity. On biodiversity mainstreaming, the plan considers extensive coverage 
of Natura2000 areas across the Croatian territory. For example, the reform to increase the uptake 
of  renewables  in  the  country  will  consider  the  findings  of  sensitivity  mapping  of  biodiversity 
locations.  Integration  of  nature-based  solutions  in  flood-prevention  measures  will  also  likely 
contribute to biodiversity objectives. 

The plan’s measures will indirectly contribute to improving air quality. While no measures 
are specifically dedicated to this objective, the plan would address low air quality mostly through 
investments to shift passenger and cargo transport from fossil-based transport modes (component 
1.4  transport),  as  well  as  by  investing  in  cleaner  production  processes  of  SMEs  and  large 
enterprises (components 1.1, 1.2 and 1.6.).  

Lasting impact   

Measures  described  in  the  recovery  and  resilience  plan  are  expected  to  have  a  lasting 
impact  towards  the  green  transition.  Measures  will  provide  long-term  contribution  for 
improvement of energy efficiency of renovated and newly constructed buildings. Measures will 
support the development of alternative fuels and new transport infrastructure, with major impacts 
on the uptake of renewable energy and sustainably mobility in the next decade, while promoting 
a  modal  shift  from  road  to  rail.  Investments  into  carbon  capture  and  storage  will  provide 
demonstration  of  innovative  technologies,  with  mitigation  potential  towards  2050  climate 
neutrality.  On  the  other  hand,  some  measures,  such  as  support  schemes  to  SMEs  are  not 
estimated  at  this  point,  and  could  have  a  more  limited  long-term  impact,  depending  on  the 
outcome of these demand-driven schemes. 

55 

 
 
Taking  into  consideration  the  assessment  of  all  the  measures  envisaged,  the  recovery  and 
resilience  plan  is  expected,  to  a  large  extent,  to  make  a  significant  contribution  to  the  green 
transition or to address the challenges resulting from it and ensures that at least 37% of its total 
allocation contribute to the climate target. This would warrant a rating of A under criterion 2.5 
of Annex V to the Recovery and Resilience Facility Regulation.   

4.6. Digital transition 

Digital tagging 

The recovery and resilience plan correctly follows the methodology for digital tracking set 
out  in  Annex  VII  of  the  Regulation,  by  identifying  intervention  fields  and  corresponding 
coefficients  for  the  calculation  of  support  to  the  digital  objectives,  for  each  investment 
measure. It should be noted that: 

  Several measures of the plan often consist of several sub-measures – for measures where 
that is the case, the plan indicates an intervention field for each sub-measure and a digital 
tagging is computed at sub-measure level.  

  The plan does not propose increased digital coefficients for any measure. 
 

In a limited number of cases, Croatia has indicated for the same measure, two different 
intervention  fields  for  the  purpose  of  climate  and  digital  tagging  respectively.  This  has 
been  applied  when  the  measure  cannot  be  split  into  different  sub-parts,  when  no  single 
intervention field that reflects the contribution to both climate and digital objectives can 
be  applied,  and  when  the  measure  is  considered  as  fully  or  partly  contributing  to  both 
climate and digital objectives. 

Overall, the recovery and resilience plan contributes to digital objectives for 20.4% (close 
to EUR 1.3 billion) of Croatia’s allocation of EUR 6.3 billion, and as such, the digital target 
of 20 % is considered to be met. The component making the most important contribution to this 
target  is  related  to  component  C2.3,  which  focuses  on  Croatia’s  digital  transformation.  This 
component  (with  an  allocation  of  EUR  381  million)  accounts  for  close  to  30%  of  the  overall 
digital  contribution.  Particularly  prominent  within  this  component  is  the  investment  for  the 
development  of  broadband  infrastructure  (EUR  106  million).  However,  the  single  measure 
contributing  the  most  to  the  digital  target  belongs  to  the  transport  component  (C1.4),  with  the 
measure  on  autonomous  electric  vehicles  (“research  development  and  production  of  new 
mobility vehicles and supporting infrastructure” C1.4.R5-I2), tagged at 100% digital, accounting 
alone  for  close  to  15%  of  the  overall  digital  contribution  (close  to  EUR  200  million).  In  the 
energy  sub-component,  the  measure  on  “revitalisation,  construction  and  digitalisation  of  the 
energy  system  and  supporting  infrastructure  to  decarbonise  the  energy  sector”  (C1.2.R1-I1) 
contributes  to  smart  energy  systems  and  makes  an  important  contribution  to  the  digital  target 
(EUR  155  million).  In  the  education  sub-component  (C3.1),  the  investment  for  the  digital 
transformation of higher education (C3.1.R2-I1), tagged at 100% with an allocation of EUR 84 
million), also makes a significant contribution to the digital target. 

Digital transition 

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Actions  to  support  the  digital  transition  are  present  in  most  components  of  the  recovery 
and  resilience  plan,  reflecting  the  broad  and  crosscutting  nature  of  the  envisaged 
digitisation  efforts.  The  Croatian  recovery  and  resilience  plan  dedicates  one  component  (2.3) 
focusing  exclusively  Croatia’s  digital  transformation,  with  various  measures  to  support  the 
digitisation of public administration and the provision of digital public e-services. Investments in 
digital  connectivity  are  also  included  to  invest  in  digital  infrastructures  in  remote  rural  areas, 
which are lagging behind in terms of digital inclusion. This component also includes investments 
in  cybersecurity,  with  a  public  information  campaign  and  upgrade  of  the  digital  tools  of  the 
Ministry of Internal Affairs to tackle cybercrime. Beyond this component dedicated to the digital 
transition,  measures  related  to  digital  are  spread  across  the  components  of  the  plan.  Six 
components can be identified as contributing significantly to the digital transition, while eleven 
are having a partial impact (see section 4.1). 

The  plan  includes  the  development  of  a  strategic  framework,  “Croatia’s  2030  Digital 
Strategy”, which will steer the digital transformation of Croatia’s society and economy for 
the  next  decade.  It  will  set  the  frame  for  investments  in  the  digital  transition  and  will  define 
strategic objectives in the following areas: (i) digital transition of the economy, (ii) digitisation of 
public administration and justice, (iii) digital connectivity/development of broadband electronic 
communications networks and (iv) development of digital skills and digital jobs.  

Connectivity 

The plan includes  an investment  to increase  national  broadband coverage with  very high 
capacity  networks  (VHCN)  in  areas  where  there  is  insufficient  commercial  interest.  The 
current  low  digital  connectivity  hinders  the  development  of  Croatia’s  digital  economy  and 
contributes to the digital divide between urban and rural areas. The objective of this investment, 
with an allocation of around EUR 106 million, is to ensure the availability of Gigabit networks 
(VHCN  including  5G  networks)  in  rural  and  sparsely  populated  areas  where  there  is  no 
commercial  interest  in  the  construction  of  5G  networks.  These  measures  are  expected  to  help 
reduce, but not close, the digital divide in Croatia.  

The  plan  also  includes  investments,  for  around  EUR  20  million,  for  the  construction  of 
passive  electronic  communications  infrastructure  (such  as  the  construction  of  stand-alone 
antenna  poles,  provision  of  fibre  or  microwave  transmission  capacity  to  connect  mobile 
electronic  communications  network  to  base  stations).  The  investments  will  target  rural  areas 
located in counties with the lowest socio-economic indicators and will enable the development of 
5G networks in these areas.  

These investments (for a total of around EUR 126 million) are however limited and below 
what would be required to close the significant investment gaps that have been identified 
for Croatia to reach the 2025 gigabit objectives. Croatia estimated an investment gap of about 
EUR  940  million  to  reach  the  2025  gigabit  objectives. While  the  private  sector  is  expected  to 
significantly  contribute  to  financing  investments  in  connectivity  in  Croatia,  and  that  other 
national  and  EU  funds  are  likely  to  be  needed,  the  allocation  planned  under  the  recovery  and 
resilience plan in terms of investment in gigabit and 5G connectivity is rather limited. 

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E-government and digital public services 

The  plan  includes  a  number  of  consistent  measures  to  improve  the  interoperability  of 
information  systems  used  by  Croatia’s  government.  This  will  materialize  with  the 
establishment  of  a  central  register  for  public  authorities,  which  will  remedy  the  current 
fragmentation, where hundreds of registers are being used by public authorities. The set-up of a 
central  interoperable  system  interconnecting  core  registers  will  be  in  line  with  the  European 
Interoperability  Framework  (EIF).  The  plan  also  includes  an  investment  to  establish  a  central 
database enabling the use of advanced data analytics for competent authorities.  

Overall,  these  measures  are  expected  to  support  the  provision  of  digital  public  e-services 
and facilitate the interaction between citizens/businesses and the public administration. The 
central interoperable register will enable the online provision of the 21 administrative procedures 
listed in Annex II of Regulation (EU) 2018/1724 (the Single Digital Gateway Regulation). The 
introduction  of  advanced  data  analytics  in  the  national  administration  will  also  support  data-
driven decision-making at all levels of the administration. These measures are expected to have a 
lasting impact, bringing systemic changes towards the development of interoperable systems at 
national level and towards data-driven decision-making.  

The  plan  includes  an  investment  to  create  a  one-stop-shop  harmonising  and  centralising 
the  helpdesk  system  of  all  public  administrations’  online  services.  The  one-stop-shop  will 
provide  a  new,  improved  service  for  citizens  and  businesses  to  communicate  with  public 
administrations and will enable users to easily find the information requested. The one-stop-shop 
will  also  have  features  to  enable  users  to  send  feedback,  assess  the  quality  of  interaction  with 
civil  servants  and  post  evaluation.  This  investment  is  expected  to  have  a  lasting  impact, 
transforming the interaction between Croatia’s public administration and its users. The plan also 
includes  an  investment  to  enable  citizens  to  easily  use  online  public  services  on  their 
smartphones,  by  creating  a  mobile  e-service  platform.  While  the  existing  “eCitizens  services” 
have been developed for personal computers and are currently not adapted to mobile devices, a 
platform  adapted  to  mobile  applications  is  now  needed.  The  plan  also  promotes  the  use  of 
electronic  signatures  in  citizens’  interaction  with  the  public  administration.  It  includes  an 
investment for the deployment of Croatia’s digital identity card to enable users of e-IDs to sign 
documents on mobile platforms. 

The plan includes a significant investment to expand the capacity of the State cloud (Shared 
Services Center, ‘CDU’) to enable a large increase in the number of users and upgrade it with the 
development  of  new  functionalities.  The  Shared  Services  Center  (CDU)  platform  will  be 
integrated  into  the  Common  European  Data  Spaces  to  enable  secure  hosting,  access  and 
modification of data and services at EU level. 

These investments are expected to have a long-lasting impact on the digital transition of the 
public  administration,  strengthening  the  interoperability  capacities  of  its  digital  services 
and ensuring that the public administration is closer  to citizens and businesses. They  will 
equally  strengthen  the  capacity  of  the  administration  to  exploit  data  for  decision-making,  to 
expand the availability of electronic identification solutions and to enhance interoperability and 
transition to cloud, leading to greater functional integration of services. The investments are also 
expected  to  increase  the  efficiency  of  public  administration,  with  significant  costs  savings 
associated with the digitalisation of services and digitisation of archives.  

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Human Capital 

The recovery and resilience plan includes investments to support the development of digital 
skills.  In  complement  to  the  ongoing  “e-Schools  project”  aimed  at  upgrading  teachers’  and 
students’ digital skills, the plan includes the continuation of the reform of the education system. 
The  reform  is  expected  to,  inter  alia,  improve  the  basic  skills  of  pupils  through  increased 
instruction time and strengthen the link between vocational and adult education on the one hand 
and  the  labour  market  on  the  other.  Part  of  this  reform  includes  the  development  of  new 
curricula, which will include a focus on the digital transition.  

The plan also supports the digital transformation of higher education,  with investments to 
equip  public  higher  education  institutions  with  modern  teaching  digital  infrastructures  and 
support online learning. At a time of expansion of digital learning and teaching tools, Croatia is 
confronted with insufficient and uneven equipment of higher education institutions, affecting the 
quality of higher education. The plan includes investments in digital teaching infrastructure and 
digital teaching tools. The plan also supports the development of a digital register of diplomas, 
which will be a significant step in the development of a graduate tracking system and aid to their 
integration into the labour market. 

Digitalisation of businesses 

The plan includes measures to support businesses in adapting their operations to the digital 
environment,  with  a  special  focus  on  the  cultural  and  creative  sectors  which  were  hit 
particularly hard by the COVID-19 crisis. Measures include a voucher system to support SMEs 
that want to develop a digital business model, strengthen their capacity to digitalise, or improve 
their cybersecurity. The voucher system will cover training for improving digital skills, adapting 
business  models  to  the  digital  transformation,  digital  marketing,  cyber  resilience  and  the 
deployment of complex digital products and services. The plan also includes measures to provide 
grants to companies for the deployment of digital solutions in their business operations, such as 
the purchase of digital tools and equipment, for strengthening digital skills to develop and deploy 
new products, services and processes.  

Taking  into  consideration  the  assessment  of  all  the  measures  envisaged,  the  recovery  and 
resilience  plan  is  expected,  to  a  large  extent,  to  make  a  significant  contribution  to  the  digital 
transition or to address the challenges resulting from it and ensures that at least 20% of its total 
allocation contribute to support digital objectives. This would  warrant a rating of A under the 
assessment criterion 2.6 in Annex V to the Recovery and Resilience Facility Regulation.  

4.7. Lasting impact of the plan  

Structural change in administration and institutions 

The implementation of the investments and reforms envisaged through the Croatian plan 
are  expected  to  bring  about  structural  changes  in  several  policies  areas  and  strengthen 
institutional  resilience  of  the  country.  The  proposed  measures  through  aim  at  equipping 
Croatia  with  the  means  to  more  efficiently  and  effectively  support  business  R&I  through  a 
diversified set of policy tools, including an improved R&D tax incentive scheme, and innovation 

59 

 
 
support  programmes,  which  could  have,  if  properly  implemented,  a  lasting  positive  impact  on 
both administrative capacity and the economy overall. Measures in general contribute to positive 
structural/long-term  changes  to  the  public  administration,  improving  design,  implementation, 
coordination  and  management  of  public  policies.  Given  the  significant  role  of  SOEs  in  the 
Croatian  economy,  improving  corporate  governance  in  strategic  SOEs  and  the  continued 
reduction in the portfolio of government assets can lead to a distinct rise in overall productivity. 
Different  flanking  reform  measures  will  have  a  lasting  impact  on  administration  and  building 
policies,  among  other,  the  strengthening  of  digitalisation  for  permitting  procedures  and  of  the 
one-stop-shop,  the measure supporting the development  of skills  and capacities for  energy  and 
seismic renovations, as well as the improvement of the integrated management and monitoring 
system for the energy consumption of the public administration buildings. 

Structural change in policies 

The  recovery  and  resilience  plan  presented  by  Croatia  has  considerable  efforts  in  place, 
more  than  half  of  the  financial  request,  to  address  structural  policies  that  can  bring  a 
lasting impact to industry and services. Tourism sector is one of the main drivers of growth in 
Croatia and the plan investments aims at increasing the sustainability of tourism by investing in 
continental  tourism  and  extending  the  tourist  season  while  also  transition  to  a  green  tourism 
sector.  Investments  in  clean  energy,  modernizing  transport  system,  digital  and  green  transition 
will increase the sustainability of the economy and crowding-in additional investments over time 
and help achieve the emission reduction target. 

The measures aimed to improve the education, research and innovation system and labour 
market will also carry a positive effect on potential growth in the long-term. The proposed 
measures  are  expected  to  bring  about  structural  changes  in  the  Croatian  R&I  ecosystem,  in 
particular  regarding  the  institutional  funding  of  universities  and  public  research  organisations, 
the governance model of universities, the career advancement framework of researchers and the 
governance of R&I support programmes. Investments in constructing or improving existing early 
childhood education and care (ECEC) and primary school  capacities that will enable increased 
participation  in  ECEC  and  a  switch  to  one-shift  schooling  shall  improve  human  capital  in  the 
long  run.  The  measures  related  to  increasing  the  capacities  of  labour  market  institutions  and 
setting up the administrative and legal framework to fight the undeclared work should have long-
term positive effects on how the relevant policy areas and measures are administered. The labour 
market  will  also  be  strengthened  by  measures  aimed  at  improving  suitable  skill  in  tourism, 
health, green and digital sectors. 

Lasting impact 

The plan overall addresses many of the core problems of the country like labour market, 
education, productivity, business environment and competitiveness challenges. Components 
that  aim  at  improving  employment  measures  and  legal  framework  for  modern  labour  market, 
improving  education  outcomes  and  skills  acquired  in  initial  education,  reducing  skill 

60 

 
 
 
 
mismatches, improving mobility and developing digital skills will have a lasting impact on the 
overall  economy  and  increase  productivity  in  the  long  run.  Addressing  challenges  like  bosting 
business  environment  for SMEs and the governance of SOEs and strengthening the innovation 
capacity  of  firms,  while  fostering  the  development  of  sustainable  tourism  will  increase  the 
competitiveness  of  the  Croatian  economy.  The  plan  also  has  an  ambitious  objective  regarding 
investments in circular economy, green and digital transition that will contribute to a sustainable 
long-term  growth.  The  combination  of  energy  renovation  with  seismic  renovation  will  also 
ensure  a  lasting  impact  of  the  energy-renovation  investments,  as  Croatia  is  one  of  the  EU 
countries with the highest seismic risk. The long-term financial impact of the proposed combined 
renovation is expected to be highly positive since for countries with high seismicity, the payback 
period of combined renovation investments is estimated to be nearly half of the payback period 
calculated when seismic and energy renovation are done separately21 . 

The long-lasting impact of the plan can be enhanced through dialogue with stakeholders in 
the  implementation  of  some  measures.  Changes  of  the  labour  law,  establishment  of  the 
framework  to  fight  the  undeclared  work  and  increasing  the  minimum  wage  and  adapting  the 
unemployment  benefit  are  measures  requiring  consultation  with  social  partners  and  other 
stakeholders.  It  is  not  clear  up  to  what  level  social  partners  and  other  stakeholders  will  be 
involved  in  the  effort  to  reach  the  milestones  and  targets.  Their  involvement  in  the 
implementation of these measures could enhance their success. Some measures in the health care 
system may have a more significant lasting impact if they were to be continued after the end of 
RRF, such as, the investments in health workforce (C5.1. R3-I1 Central Specialisation Funding 
and C5.1. R3-I2 Special upgrading of nurses and technicians in emergency medicine). 

Taking into consideration all reforms and investments envisaged by Croatia in its recovery and 
resilience  plan,  their  implementation  is  expected,  to  a  large  extent  to  bring  about  a  structural 
change in the administration and in relevant policies and to have a lasting impact. This would 
warrant a rating of A under criterion 2.7 of Annex V to the RRF Regulation. 

4.8. Milestones, targets, monitoring and implementation 

Adequacy of the structure tasked with the implementation of the plan, monitoring of progress 
and reporting 

The  Croatian  structure  tasked  with  carrying  out  the  implementation  of  the  plan, 
monitoring of progress and reporting is built around four main bodies that will each have 
responsibility  to  execute  the  management  and  control  system  to  be  established.  First,  the 
Recovery  and  Resilience  Facility  Central  Coordinating  Body  under  the  Ministry  of  Finance, 
constitutes  the  lead  national  body  tasked  with  the  overall  coordination  and  monitoring  of  the 
recovery and resilience plan, including active monitoring of the progress of the measures, on the 

21 Pohoryles D.A., Maduta C.,  Bournas D.A. and Kouris  L.A.,  (2020), Energy performance of existing residential 
buildings in Europe: a novel approach combining energy with seismic retrofitting, JRC120248. 

61 

 
 
                                                           
basis  of  the  milestones  and  targets  set  for  each  component.  Second,  the  responsibility  for  the 
implementation of each specific measure is well defined and falls in most cases on the competent 
Ministry, whose services will support the monitoring of the projects’ progress and maintain close 
cooperation with the RRF Coordination Body and the implementing bodies. Third, all measures 
in the plan will be monitored by the Implementation Committee, which will ensure consistency 
and  coherence  in  the  use  of  the  EU  funds.  Fourth,  the  Agency  for  the  Audit  of  the  European 
Union Programmes Implementation System (ARPA) will be mandated to carry out audits in the 
scope  of  the  Croatian  recovery  and  resilience  plan.  In  order  to  provide  general  policy 
orientations,  the  Steering  board,  headed  by  the  Prime  Minister,  oversees  the  management  and 
implementation of the plan. The IT system, which is currently used for European structural and 
investment funds will be upgraded to allow for the collection, storage and monitoring of data on 
the milestones and targets, including at the level of final recipients. 

The recovery and resilience plan’s components fall, to a large extent, under the competency 
of a Ministry that will then appoint relevant implementing bodies depending on the scope 
of the measures included under the specific component. However, monitoring implementation 
of some broader components containing diverse measures, such as Components 1.1 (Economy), 
Component 1.4 (Transport) and Component 2.3 (Digital transition), involves multiple Ministries 
and agencies, with an assigned lead Ministry.  

The  Croatian  plan  presents  a  detailed  overview  of  the  monitoring  and  reporting 
mechanism  foreseen.  More  specifically,  the  management  and  control  system  includes  a 
dedicated  monitoring  phase  covering  the  whole  lifecycle  of  the  measures.  This  includes 
analytical processes that will be established, in order for the implementing bodies to notify the 
RRF  Coordination  Body  on  a  periodical  basis  on  the  progress  made  in  the  achievement  of  the 
milestones  and  targets.  The  recovery  and  resilience  plan  contains  a  detailed  description  on  the 
functioning  of  the  information  gathering,  monitoring  and  reporting  system.  The  reporting 
mechanism starts with the collection of the information from the final recipients on the progress 
in  the  implementation  of  the  grant  agreements.  These  contracts  will  require  final  recipients  to 
report regularly through the e-Funds system on the progress made in implementing investments. 
The  body  responsible  for  the  component  will  enter  information  on  the  achievement  of  the 
indicator  under  its  responsibility  and  will  aggregate  the  data  at  component  level.  The  body  in 
charge of the component shall be responsible for the accuracy and completeness of the indicator 
output data. Regular checks on the veracity and accuracy of data shall be carried out by the RRF 
Coordinating Body in cooperation with the National Fund. 

Milestones, targets and indicators 

The milestones and targets of the Croatian plan constitute an appropriate system to allow 
the  efficient  monitoring  of  its  implementation.  The  recovery  and  resilience  plan  defines 
milestones/targets for each investment and reform included in the plan. The proposed qualitative 
and quantitative indicators used for the milestones and targets are sufficiently clear, realistic and 
comprehensive  to  ensure  that  their  completion  can  be  traced  and  verified.  Furthermore,  the 
milestones  and  targets  are  relevant,  robust  and  acceptable,  as  their  scope  reflects  the  overall 
objective  of  the  measures,  which  are  assessed  as  reasonable  and  cost-effective.  Where 

62 

 
 
compliance  with  the  Do  No  Significant  Harm  principle  cannot  be  ascertained  in  advance,  the 
milestones and targets associated with the measure lay out adequate safeguards for compliance. 

Overall organisational arrangements 

As  set  out  in  the  recovery  and  resilience  plan,  the  lead  body  tasked  with  the  overall 
coordination, the RRF Central Coordination Body, is an independent special public service 
under  the  Minister  of  Finance.  The  RRF  Central  Coordination  Body  constitutes  the  lead 
national body tasked with the overall coordination and monitoring of the plan. It is also assigned 
as  the  responsible  body  that  submits  twice  a  year  the  payment  request  to  the  Commission, 
accompanied by a management declaration of sound financial management and the summary of 
the  Agency  for  the  Audit  of  European  Union  Programmes  Implementation  System  (ARPA) 
audits, including weaknesses identified and any corrective actions taken. 

The  legal  mandate  of  the  RRF  Coordinating  Body  and  the  mandate  of  other  bodies 
involved in the implementation and monitoring is defined in the plan. The official decision 
on the involvement of the above bodies is planned to be adopted at the end of June 2021. The 
formalisation of the legal mandate of the bodies involved in the implementation and control of 
the RRF in Croatia is thus pending. Accordingly, a milestone is included in the plan to ensure the 
mandates  are  formalised  before  the  first  payment  request  is  submitted  to  the  European 
Commission. The legal act on the institutional framework for EU funds will also include the law 
for capacity building activities, which shall be further developed though by-laws. The law shall 
also recognise the need to further strengthen the capacity of final recipients to prepare, apply and 
implement EU projects. 

Whereas  the  plan  presents  comprehensive  coordination,  implementation  and  monitoring 
arrangements,  the  implementation  of  the  plan  will  crucially  hinge  on  the  administrative 
and  implementation  capacity  of  the  implementing  bodies  and  will  need  to  be  closely 
monitored.  The  bodies  responsible  for  the  implementation  of  the  investments  are  reforms  are 
clearly  identified  and,  in  the  majority  of  cases,  have  substantial  expertise  and  knowledge 
stemming  from  the  implementation  of  the  ESI  Funds.  Nevertheless,  it  remains  important  to 
assess their capacity needs further, in order to ensure sufficient resources for implementation. In 
some cases, it is not clear how the public-private partnerships foreseen will interact with the local 
organizations  (e.g.,  on  water  management  investments  under  component  1.3).  Further,  the 
Croatian  Bank  for  Reconstruction  and  Development  (HBOR)  is  expected  to  contribute  to  the 
implementation of some important measures (e.g., measures under components 1.1, 1.2 and 1.6) 
and  it  will  be  important  to  ensure  that  it  has  sufficient  administrative  capacity.  Similarly,  the 
technical  services  of  the  municipalities,  are  expected  to  contribute  to  the  implementation  of  a 
number  of  components  (e.g.,  components  1.2,  1.3,  1.6,  and  6.1),  and  their  administrative 
capacity, in particular for the smaller municipalities, is usually limited. It would be important to 
underpin  the  latter,  also  through  the  aggregation  of  offices  and  competences  resulting  from 
successful  physical  and  functional  mergers  of  local  units  (Reform  C2.2  R4).  The  planning, 
implementation and monitoring of digital measures will require a strong coordination in terms of 
policy  steering  and  technical  support  (through  sub-component  C2.1)  for  all  digital  measures 
spread  across  the  RRP,  and  for  those  financed  by  other  national  or  EU  funds,  with  a  view  to 

63 

 
 
ensure  synergy  and  complementarity  and  avoid  duplication  of  efforts.  To  ensure  adequate 
capacities,  a  workload  analyses  shall  be  carried  out  for  the  institutions  involved  in  the 
implementation,  also  taking  into  account  the  burden  arising  from  the  Recovery  and  Resilience 
Facility. Based on the analysis and recommendations, necessary resources shall be allocated to 
the  institutions  involved.  Accordingly,  a  milestone  is  included  in  the  Council  implementing 
decision to ensure proper execution of the analyses and recommendations. 

The  arrangements  proposed  by  Croatia  in  its  recovery  and  resilience  plan  are  expected  to  be 
adequate to ensure effective monitoring and implementation of the recovery and resilience plan, 
including the envisaged timetable, milestones and targets, and the related indicators. This would 
warrant a rating of A under the assessment criterion 2.8 of Annex V to the RRF Regulation. 

4.9. Costing 

The  recovery  and  resilience  plan  generally  presents  a  clear  breakdown  of  costs  for  each 
investment and reform where costs occur. References to earlier similar projects or to studies 
carried out are provided to justify the cost figures. For several demand-driven measures, based 
on calls for proposal, a milestone or target covering the budgetary execution has generally been 
included.  The  cost  descriptions  vary  in  the  methodology  used.  The  descriptions  provide  an 
appropriate level of information, based on which reasonability, plausibility, and additionally with 
other EU funding sources can be assessed. Furthermore, in combination with the economic and 
social  impact  assessment  provided  in  the  plan,  the  cost  assessment  also  allows  an  evaluation 
regarding  whether  the  overall  costs  are  commensurate  with  the  economic  and  social  impact 
expected from the measures as well as their cost efficiency.  

Croatia  submitted  a  detailed  costing  table  which  provides  a  breakdown  of  costs  per  year 
and the description of the costs. The budget breakdown contains the estimated cost excluding 
value added tax, and includes information regarding the duration of the measure, assurances that 
none  of  the  costs  have  been  incurred  before  February  2020  as  well  as  information  regarding 
recurrence of the cost. The budget also includes information regarding costs that are covered by 
other private parties or Union financing, in which case they have been taken out of the project 
cost  to  ensure  there  is  no  double  funding.  Furthermore,  the  table  also  contains  information 
regarding the methodology used for estimating the cost, the critical cost  drivers, unit costs and 
the  total  number  of  units,  and  the  estimation  of  the  total  budget  per  measure.  The  table  also 
contains  references  to  supporting  material,  such  as  relevant  studies  as  well  as  historical  and 
comparative costs of similar projects that were used to validate the project cost.  

Certain elements, notably on comparative costing data, have not always been filled out in 
the table. There are deficiencies in the costing description for a number of measures such as the 
description  and  justification  of  costs  not  covering  all  sub-measures;  methodology  and 
calculations  provided  not  always  matching  the  proposed  amounts;  and  some  failure  to  provide 
supporting documentation, in case reference is made e.g. to studies or past projects. Croatia has 
not provided an independent validation for any of the cost estimates proposed.   

In terms of costing methodology, the recovery and resilience plan presents three different 
approaches  (bottom-up  cost  calculation,  parametric  cost  calculation  and  top-down  cost 

64 

 
 
estimation) depending on the maturity of a project and the availability of data. The bottom-
up approach estimates the cost of each granular cost driver and then aggregates the cost of the 
individual  units  to  an  estimated  total  cost  of  the  project.  The  parametric  approach  relies  on 
similar  projects  and  historical  figures  to  estimate  the  project  cost;  and  the  top-down  cost 
estimation  approach  apportions the total  cost  to  individual  cost  parameters.  This  approach  also 
heavily relies on historical data but also takes into account expert judgement, especially in cases 
where there is limited comparable costing information available.  

Reasonable costs 

To  support  the  cost  estimates,  Croatia  provided  a  source  for  its  estimates  of  unit  costs 
(where pertinent) and gave adequate explanations on the methodology used for establishing 
the cost for a clear majority of measures. The cost estimates include costing tables that break 
down the overall cost into different items, and allow the identification of the main cost drivers 
and  how  the  overall  cost  of  the  project  has  been  estimated.  The  underlying  calculations  and 
assumptions for the cost estimations can be well understood and are sound for a majority of the 
measures. Some of the investment projects are expected to create recurrent cost, due to the nature 
of the investment,  but these cases are limited in number and duly justified and well explained. 
All cost breakdowns only include cost that have been incurred after February 2020 and the value 
added  tax  has  been  excluded  from  the  cost  calculations.  A  recurring  issue  concerns  measures 
consisting  of  several  sub-measures,  where  the  methodology  for  allocating  costs  to  each  sub-
measure  is  frequently  not  entirely  clear.  For  a  certain  number  of  measures,  no  calculations  for 
arriving  at  the  total  cost  are  provided,  or  those  calculations  do  not  reconcile  to  the  requested 
funding or the associated milestones or targets. Depending on the significance of the deficiencies 
identified, these measures are assessed as having low or medium reasonability.  

Plausible costs  

Croatia provided sufficient information and evidence that the amount of the estimated total 
costs of the recovery and resilience plan is in line with the nature and type of the envisaged 
investments.  As  part  of  the  costing  tables,  Croatian  has  included  a  justification  why  the 
estimated  cost  are  in  line  with  the  nature  and  type  of  the  project,  and  should  be  regarded  as 
plausible. These justifications are generally supported by reference projects that are comparable 
and have been concluded recently either in Croatia or other EU Member States, relevant studies, 
tender  documentation  of  recently  awarded  tenders  of  comparable  projects  and  average  market 
rates. For some projects, that are of very innovative nature or will be supporting specific action 
for  instance  via  demand  driven  schemes  and  therefore  cannot  be  directly  compared  to  other 
existing projects, scientific sources and input cost have been used to substantiate the plausibility 
of the cost estimates. A limited number of projects is not sufficiently substantiated with cost of 
comparable  project  or  the  evidence  cited  could  not  be  accessed.  Where  estimated  project  cost 
exceed  the  project  cost  of  the  reference  projects,  the  excess  remains  generally  within  an 
appropriate range.     

No double Union financing 

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Most of the measures proposed in the recovery and resilience plan are entirely funded from 
the  Recovery  and  Resilience  Facility  and  in  the  few  exceptions,  where  other  funding 
sources  are  used,  sufficient  information  has  been  provided.  In  the  few  cases  that  also  use 
national or other EU funding sources, the information regarding the amounts and costing items 
that are not covered under the Recovery and Resilience Facility have been provided as part of the 
cost breakdown per measure. The costs that are covered by other than Recovery and Resilience 
Facility  funding  sources  have  been  taken  out  of  the  overall  cost  that  will  be  supported  by  the 
Facility,  therefore  providing  a  clear  delineation  and  avoiding  double  funding.  Further  details 
could  have  been  provided  on  the  demarcation  between  funds,  for  those  measures  which  are 
similar to a priority also funded under cohesion policy (e.g. renovation of buildings, waste and 
water  management).  However,  given  the  strong  governance  between  EU  funds  and  control 
systems  described  in  the  plan,  no  risk  of  double  funding  has  been  identified.  Further  detail  is 
provided on the arrangements under section 4.10. 

Commensurate and cost-efficient costs 

Due to its significant positive economic and social impact and positive assessment regarding 
the  reasonability  and  plausibility  of  the  cost,  the  total  cost  of  the  recovery  and  resilience 
plan can be assessed as  commensurate  to the  expected social and economic impact of the 
envisaged measures. As outlined in  sections  4.1 and 4.3, the measures  foreseen  as part of the 
plan  are,  when  assessed  jointly,  expected  to  have  a  significant  economic  and  social  impact, 
counteracting  some  of  the  adverse  effects  of  the  economic  crisis  caused  by  the  coronavirus 
pandemic as well as fostering structural changes in the economy and society. The cost associated 
with  these  measures  have  been  well  explained  and  assessed  as  reasonable  and  plausible  and 
therefore are commensurate to the expected social and economic impact.  In light of the above, 
the rating for commensurate and cost-efficient costs is assessed as an A. 

The justification provided by Croatia on the amount of the estimated total costs of the recovery 
and resilience plan is to a medium extent reasonable, plausible, in line with the principle of cost-
efficiency  and  is  commensurate  to  the  expected  national  economic  and  social  impact.  Croatia 
provided sufficient information and evidence that the amount of the estimated cost of the reforms 
and  investments  of  the  recovery  and  resilience  plan  to  be  financed  under  the  Facility  is  not 
covered  by  existing  or  planned  Union  financing.  This  would  warrant  a  rating  of  B  under  the 
assessment criterion 2.9 of Annex V to the RRF Regulation. 

4.10. 

Controls and audit 

Robustness of internal control system and distribution of roles and responsibilities  

The Croatian plan adequately describes the system for the implementation of the recovery 
and resilience plan in Croatia. The system presents a robust process and structure, where the 
roles and responsibilities are clearly defined, and the relevant control functions are appropriately 
segregated.  The  coordinating  body  will  be  the  Directorate  for  Macroeconomic  Analysis  within 
the  Ministry  of  Finance.  For  each  component/sub-component,  the  competent  authority  at 
ministry and central  government  office level  has been appointed for the  implementation  of the 

66 

 
 
reforms  and  the  investments,  in  accordance  with  the  sectoral  competence  provided  for  in  the 
System of State Administration Act. 

The National Fund department within the Ministry of Finance is the body responsible for 
preparing and sending the payment requests to the European Commission. The tasks of the 
audit authority  are  assigned  to  the Agency for the audit of the  EU programme implementation 
system (ARPA). The independence of the audit body is ensured. 

The  coordinating  body,  in  cooperation  with  the  National  Fund,  will  carry  out  checks  to 
confirm  that  the  milestones  and  targets  have  been  met.  The  National  Fund  will  carry  out 
checks  on  the  expenditure  in  order  to  ensure  compliance  with  all  relevant  regulations  and  will 
prepare the summary of audit findings and recommendations in parallel with the preparation of 
the Management Declaration, based on the information provided in the management declarations 
of the ministries and of the audit reports provided by the audit body.  

All bodies in charge of implementing the components/sub-components are involved in the 
implementation  of  the  European  Structural  and  Investment  (ESI)  Funds  2014-2020  as 
bodies in the management and control systems or as beneficiaries of the projects. To ensure 
uniform  rules  for  the  use  of  the  Funds,  the  Croatian  authorities  have  decided  that  the  bodies 
responsible  for  the  component/sub-component  shall  use  the  same  procedures  as  for  the  ESI 
Funds, which are to be adapted to the recovery and resilience plan specificities by October 2021, 
in  cooperation  with  the  National  Fund.  In  addition,  the  Ministry  of  Finance  will  develop 
procedures for the monitoring and the reporting on the fulfilment of key indicators and targets. 
The adaptation of the ESI Funds procedures to the recovery and resilience facility context is thus 
pending.  Accordingly,  a  milestone  has  been  proposed  to  ensure  the  procedures  are  formalised 
before the first payment request is submitted to the European Commission.  

Adequacy of control systems and other relevant arrangements  

For the management and the monitoring of the recovery and resilience plan, the Croatian 
authorities will use the eFunds system developed for the management of the ESI Funds for 
the  2014-2020  programming  period.  The  system  will  be  further  upgraded  to  allow  for  the 
collection, storage and monitoring of data on the milestones and targets, including at the level of 
final recipients. A dedicated milestone has been included to be completed before the submission 
of the first payment request. 

Regarding  the  prevention,  detection  and  correction  of  irregularities,  the  Croatian 
authorities  will  rely  on  the  Anti-fraud  coordination  service  (AFCOS)  system  in  place  in 
Croatia. The Ministry of Finance has adopted guidelines on Irregularity Management containing 
rules  for  the  prevention,  detection,  handling  and  reporting  of  irregularities  as  well  as  on  the 
follow-up  of  the  reported  irregularities.  Within  the  Ministry  of  Finance,  the  Sector  for 
Harmonisation  of  the  Development  of  the  Internal  Control  System  and  the  Financial  and 
Budgetary  Control  Sector  has  been  set  up  at  the  request  of  the  Coordinating  Authority.  The 
Internal  Control  System  Harmonisation  Sector  performs  tasks  related  to  the  development  of 
internal  control  and  internal  audit  systems  in  the  public  sector  and  provides  instructions  and 

67 

 
 
trainings in these areas. The proposed measures give assurance that there is an adequate level of 
control to prevent, detect and correct irregularities identified when using funds provided by RRF. 

The  Croatian  plan  states  the  procedures  that  are  in  place  to  ensure  compliance  to 
applicable  Union  and  national  law,  throughout  the  implementation  of  all  measures  by 
allowing  for  controls  and  audits  to  be  implemented  in  separate  and  distinctive  levels.  In 
particular, during the first level controls, the implementing bodies will carry out  administrative 
and  on-the-spot  checks.  On  top  of  the  above,  the  coordinating  body,  in  cooperation  with  the 
National Fund, will carry out checks to confirm that the milestones and targets have been met. 
The National Fund will carry out checks in order to ensure that the competent authorities comply 
with  all  relevant  regulations.  Moreover,  the  Agency  for  the  audit  of  the  EU  programme 
implementation system will carry out the second level audits, these will – based on a half-yearly 
audit cycle – include system audits and audits on the achievement of the milestones and targets. 
Finally, the bodies involved in the implementation of the plan are already using the ARACHNE 
tool for the ESI Funds and will continue to use it also for recovery and resilience plan. 

Adequacy of arrangements to avoid double EU funding  

The  avoidance  and  detection  of  double  funding  will  be  ensured  at  all  stages  of  projects’ 
lifecycle. The arrangements put in place are sufficient and adequate in their description. Checks 
on double funding will be carried out through three main processes: the planning of the funds in 
the  national  budget,  the  award  of  the  grants  for  the  implementation  of  the  projects  and  the 
approval of payments per project. 

The  bodies  in  charge  of  implementing  the  component/sub-component  are  responsible  for 
the  proper  planning  of  the  funds  in  the  State  budget  and  the  avoidance  of  double 
budgeting. When drawing up the State budget, checks on planned amounts and potential double 
funding are carried out by the State Treasury or the National Fund for all costs financed by EU 
funds. 

The verification of double funding will also be carried out at the grant award stage and at 
the disbursement of the funds to project final recipients. In both cases, project final recipients 
submit a declaration on the avoidance of double funding. Implementing agencies will carry out 
checks  based  on  the  available  data  in  the  IT  systems  of  the  authorities  responsible  for 
implementing  the  ESI  Funds,  data  on  the  implementation  of  expenditure  from  the  national 
budget and by consulting the information available on the allocation of funds from other public 
sources. 

Data on project financing are kept in a number of IT systems under the responsibility of 
various Ministries, which are also bodies involved in the implementation of the plan. These 
ministries are the Ministry of Regional Development and EU Funds, the Ministry of Labour, the 
Pension System, the Family and Social Policy, the Ministry of Interior, the Ministry of Education 
and Science and the Ministry of Agriculture. In order to ensure the timely availability of data and 
the  verification  of  double  funding,  information-sharing  agreements  will  be  concluded  by 
September  2021  detailing  the  systems  in  which  the  data  on  implementation  are  located,  the 
ownership  of  the  data  and  the  right  of  access  to  information  of  all  bodies  involved  in  the 

68 

 
 
implementation  of the plan. The coordinating body  will lead the overall  process  of concluding 
the  agreement.  The  data  collection  and  consolidation  will  heavily  rely  on  the  planned 
information-sharing  agreements,  which  should  be  followed  closely,  which  will  be  followed  up 
through  the  milestone  on  the  putting  in  place  of  all  the  procedures  to  be  used  by  the 
implementing bodies, which is to be fulfilled before the first payment request is submitted.    

Legal empowerment and administrative capacity of control function  

The  official  decision  on  the  involvement  of  the  bodies  responsible for  the  implementation 
and the control of the recovery and resilience plan in Croatia is planned to be adopted at 
the  end  of  June  2021.  The  formalisation  of  the  legal  mandate  of  the  bodies  involved  in  the 
implementation and control of the RRF in Croatia is thus pending. Accordingly, a milestone is 
included  in  the  plan  to  ensure  the  mandates  are  formalised  before  the  first  payment  request  is 
made.  

For  setting  up  the  Coordinating  Body,  a  Sector  for  Coordinating  and  monitoring  the 
implementation  of  the  plan  is  set  up  in  the  Directorate  for  Macroeconomic  Analysis,  the 
European Union and International Financial Relations within the Ministry of Finance. It is 
planned  to  dispose  of  30  posts  to  carry  out  the  tasks  of  the  Coordinating  Body,  which  will 
initially be filled by internal transfers of staff within the Ministry of Finance and from other state 
administration bodies in the course of 2021, while in the meantime the recruitment of additional 
staff will be launched to reach full capacity. The Croatian authorities consider that the number of 
30 additional staff dealing exclusively with the recovery and resilience facility is adequate. They 
will  be  able  to  build  on  the  capacities  of  the  other  parts  of  the  Directorate,  given  that  the 
Directorate’s remit is complementary to the tasks of the Coordination Body, in particular in the 
areas  of  public  finances,  relations  with  the  EU  and  financial  institutions.  The  process  of 
establishing the sector is ongoing and formal establishment is expected by October 2021. 

The audit of the plan will be carried out by the Audit Process Support Service within the 
Agency for the audit of the EU programme implementation system (ARPA). The Statutes of 
the Agency are currently being amended on the basis of which amendments to the Rules on the 
organisation  and  systematisation  of  posts  will  be  adopted.  These  amendments  will  extend  the 
scope of the Audit Process Support Service to include a review of the plan and will increase the 
number of established posts from three to eight. Based on the information provided in the plan, 
the Croatian authorities have demonstrated that the Agency for the audit of the EU programme 
implementation  system  has  modified  its  organisation  ensuring  that  experienced  auditors  will 
handle  the  recovery  and  resilience  facility  audits.  The  workload  analysis,  as  requested  in  the 
dedicated milestone, will reveal whether this number of auditors will be sufficient to cope with 
the  workload  of  the  recovery  and  resilience  facility  audits,  and  if  needed,  Croatia  shall  ensure 
that a sufficient number of additional auditors are allocated to the Agency for the audit of the EU 
programme implementation system. 

Croatia  will  –  for  the  implementation  of  the  recovery  and  resilience  plan  -  use  the  same 
structures,  bodies  and  procedures  as  for  the  ESI  Funds.  Therefore,  the  recovery  and 

69 

 
 
 
resilience facility auditors will be able to build on the audits of the ESI management and control 
system  (in  particular  the  system  audits)  carried  out  by  the  Agency  for  the  audit  of  the  EU 
programme implementation system services.  

The arrangements proposed by Croatia in the recovery and resilience plan to prevent, detect and 
correct  corruption,  fraud  and  conflicts  of  interest  when  using  the  funds  provided  under  the 
Facility, including the arrangements aimed to avoid double funding from the Facility and other 
Union  programmes,  are  assessed  to  be  adequate.  This  would  warrant  a  rating  of  A  under  the 
assessment criterion 2.10 of Annex V to the RRF Regulation. 

4.11. 

Coherence 

Croatia’s recovery and resilience plan is structured around five coherent components and 
one initiative, which support the common objectives to  stimulate the recovery of the Croatian 
economy and mitigate the impact of COVID-19, to contribute to the twin transition and inclusive 
growth,  and  to  increase  resilience  and  competitiveness  of  the  Croatian  economy.  The  plan’s 
components,  especially  the  “Initiative:  Renovation  of  Buildings”,  shall  also  contribute  to  the 
reconstruction  of  the  damage  caused  by  two  devastating  earthquakes,  which  in  2020  affected 
central Croatia with consequences in and around Zagreb, and Banovina region. 

The plan’s five components and one initiative represent a package of coherent reforms and 
investments,  which  are  mutually  reinforcing  or  complementary,  as  they  aim  to  act  in 
synergy, while taking into account Croatia’s development potential and development challenges 
at  regional,  national,  European  and  global  levels.  Reforms  and  investments  are  aimed  at 
addressing  the  economic  and  social  damage  caused  by  the  global  crisis,  boosting  Croatia’s 
recovery, and responding to the objectives set in the European Green Deal and the EU Territorial 
Agenda  2030,  thus  providing  the  basis  for  the  sustainable  and  innovative  development  of 
Croatia, while making society and economy resilient to global crises. 

Mutually-reinforcing measures 

The  “Public  Administration,  Judiciary  and  State  Property”  component  aims  to  improve 
the efficiency of public administration, the judiciary and the management of state assets, as 
well  as  the  quality  and  accessibility  of  public  services  to  citizens  and  the  effective  fight 
against  corruption.  The  proposed  reforms  and  investments  are  mutually  reinforcing.  For 
example,  the  reform  of  local  government  units  from  the  component  aimed  at  improving  the 
efficiency of public administration, is  reinforcing  the anti-corruption framework policies in  the 
component  on  preventing  and  combating  corruption.  These  reforms  and  investments  will  also 
have  a  positive  impact  on  reinforcing  the  component  that  aims  to  further  strengthen  the  fiscal 
framework  and  fiscal  discipline  through  the  amended  Budget  Act.  The  investment  on 
construction  of  passive  electronic  communications  infrastructure  in  rural  areas,  reinforces  the 
investment  on  smart  Agriculture  platform,  aimed  to  support  the  digital  transformation  of 
agriculture. Both investments are pursing the objective of digital transition of society and public 
administration.  The  investment  on  developing  new  IT  tools  for  the  tourism  public  information 
system  (e-tourism)  is  envisaged  to  facilitate  development  of  tourism  and  support  the 
sustainability  of  the  sector.  This  investment  will  have  a  positive  impact  on  uptake  of  digital 

70 

 
 
technologies  in  tourism,  thus  reinforcing  investments  aimed  at  fostering  the  green  and  digital 
transition of tourism. 

The  “Education,  Science  and  Research”  component  aims  to  improve  the  availability  and 
effectiveness  of  education,  strengthen  Croatia’s  public  science  base  and  promote 
cooperation  with  the  business  sector.  The  proposed  reforms  and  investments  are  mutually 
reinforcing.  For  instance,  reforms  of  the  research  and  innovation  policy  and  investment 
framework, under the component on boosting research and innovation, is helping to improve the 
capacities  of  the  research  sector  and  align  them  with  market  needs,  thus  directly  supporting 
economic development under component on resilient, green and digital economy. The plan also 
includes a reform of the education system, which aims, among others, to increase access to early 
childhood  education.  The  reform  is  accompanied  by  mutually-reinforcing  investments  in 
infrastructure to create new places in early childhood education and care, which will contribute 
towards eventually enabling universal access to early childhood education. 

Complementarity of measures 

The “economy” component aims to support the competitiveness, resilience, and sustainable 
development of the economy, and includes a set of complementary reforms and investments 
to support the green and digital transition. For example, the investments into recharging and 
refuelling  infrastructure  and  investments  aimed  to  improve  the  use  of  hydrogen  and  new 
technologies  complement  the  investments  aimed  at  modernising  public  urban  and  suburban 
regular  transport  of  passengers  through  the  purchase  of  new  vehicles  and  vessels  (hydrogen 
powered or electrical). Furthermore, modernisation of the tram fleet, procurement of alternative-
fuel-powered  zero  emission  vessels  and  a  new  urban  mobility  ecosystem  with  autonomous 
electric vehicles, work together towards greening the transport sector. The investments related to 
better  management  of  natural  resources,  under  the  component  on  improving  water  and  waste 
management, contribute to reforms and investments related to better use of natural resources and 
stronger food supply chain. They also complement the measures for a sustainable, innovative and 
resilient tourism. In the component on improving the use of natural resources and strengthening 
the supply chain food, the new Act on Agricultural Land Consolidation shall create preconditions 
for modern farming methods and facilitate the use of digital  services in  the agricultural  sector, 
thus  contributing  to  objectives  of  the  component  on  digital  transition  of  society  and  public 
administration.  Reforms  and  investments  related  to  agricultural  land  consolidation  shall  also 
contribute to measures on better water management.  

The  “Public  Administration,  Judiciary  and  State  Property”  component  also  includes  a 
number  of  complementary  investments  to  support  the  digital  transition.  For  instance,  it 
includes a key investment to upgrade the State Cloud (Shared Services Centre). Building on this 
investment,  the  plan  also  includes  various  measures,  such  as  the  upgrade  of  the  Central 
Information Health System of the Republic of Croatia (CEZIH), which will use the State Cloud 
to modernize their IT systems. 

The  “Labour  Market  and  Social  Protection”  component  aims  to  boost  the  employment, 
strengthen  the  framework  for  further  increasing  wages,  pensions  and  cash  benefits, 

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effectively  fighting  poverty  and  taking  care  of  the  most  vulnerable  groups  of  society.  The 
component  includes  a  set  of  complementary  reforms  and  investments.  For  example,  the  active 
labour  market  policies  will  target  the  long-term  unemployed  and  less  employable  people  from 
vulnerable groups. This measure will be complemented with the use of skills vouchers in order to 
provide skills related to the green and digital transitions. In general, all reforms and investments 
under  this  component  work  in  synergy  in  order  to  increase  the  employment  rate,  thereby 
increasing the competitiveness of the Croatian economy. 

The  “Healthcare”  component  includes  a  set  of  complementary  investments  while  the 
overarching objective of the reforms and investments is to improve the efficiency, quality, 
accessibility,  and  financial  sustainability  of  the  health  system.  The  investments  under  this 
component  are  complementary  and  they  work  together  in  achieving  the  objectives  of  the 
pertaining  reforms.  For  example,  six  accompanying  investments  ranging  from  digitalising  the 
medicine  tracking  to  the  development  of  a  medicines  shortages  monitoring  and  prevention 
system in Croatia, support the reform that is expected to ensure the financial sustainability of the 
health  system.  Reforms  and  investments  under  this  component  also  support  and  contribute  to 
other  components  of  the  plan.  The  introduction  of  mobile  pharmacies  into  primary  care,  also 
supports and contributes to sustainable and resilient tourism, since it increases the availability of 
pharmacy services, not just for residents, but also for tourists during high season. 

The  “Initiative:  Renovation  of Buildings”,  aims  to  support  the  comprehensive  renovation 
of buildings, and includes a set of complementary investments and reforms. The investments 
include energy renovation, post-earthquake renovation combined with energy renovation, energy 
renovation  of  buildings  with  a  status  of  a  cultural  good,  and  the  development  of  the 
seismological  data  network.  They  also  contribute  to  the  green  and  digital  transition,  and  work 
towards  smart,  sustainable  and  inclusive  growth,  together  with  investment  from  other 
components,  especially  those  measures  relating  to  energy  transition  and  decarbonisation  of  the 
energy  sector.  Developing  a  framework  to  ensure  adequate  skills  in  the  context  of  post-
earthquake  reconstruction  also  contributes  to  measures  related  to  the  labour  market  and  active 
employment policy for the needs of the green transition. Setting up of on-line and physical one-
stop  shops,  to  reduce  the  administrative  burden  and  combine  the  energy  and  post-earthquake 
renovation, contributes to increasing the efficiency of public administration. In order to promote 
wider  coherence  across  instruments,  notably  with  the  European  cohesion  policy  funds,  a 
balanced territorial allocation of resources is encouraged. 

Taking into consideration the qualitative assessment of all components of the Croatian recovery 
and  resilience  plan,  their  individual  weight  (importance,  relevance,  financial  allocation)  and 
their  interactions,  the  plan  contains  measures  for  the  implementation  of  reforms  and  public 
investments which, to a high extent, represent coherent actions. This would warrant a rating of A 
under the assessment criterion 2.11 of Annex V to the RRF Regulation. 

72 

 
 
 
 
ANNEX: CLIMATE AND DIGITAL TRACKING TABLE

22 

Measure/ 
Sub-measure 
ID 

Measure/Sub-measure name 

Climate 

Digital 

Budget 
(EUR 
mn) 

Interv. 
field 

Coeff. 
% 

Interv. 
field 

Coeff. 
% 

C1.1.1. R1-I1  Digitalisation of government and public 

4.6 

011 

0% 

011 

100% 

administration services by business sector 
(G2B) 

C1.1.1. R1-I2.b  Continued administrative and fiscal burden 
relief, and a better regulatory environment 

1.1 

011 

0% 

011 

100% 

C1.1.1. R4-I1.a  Supporting businesses for the transition to an 

99.5 

047 

40% 

energy and resource-efficient economy - 
SMEs 

C1.1.1. R4-I1.b  Supporting businesses for the transition to an 

152.6 

047bis 

40% 

energy and resource-efficient economy – 
large companies 

C1.1.1. R4-I2.a  Financial instruments for micro, small and 

27.9 

047 

40% 

medium-sized enterprises – green part 

0% 

0% 

0% 

C1.1.1. R4-I2.c  Financial instruments for micro, small and 

23.2 

010 

0% 

010 

100% 

medium-sized enterprises – digital part 

C1.1.1. R4-I3.a  Mid-cap financial instruments  

26.5 

047bis 

40% 

businesses and large entities – green part 

C1.1.1. R6-I1 

C1.1.1. R4-I4.a  Financial instruments for public sector 
entities – green part 
Transforming and strengthening the 
competitiveness of cultural and creative 
industries 
Establishing media fact-check and public 
disclosure system 
Preparation of strategic documents for the 
digital transformation of the economy and 
artificial intelligence 

C1.1.1. R6-I2 

C1.1.2. R3-I1 

C1.1.2. R3-I2  Digital vouchers 
C1.1.2. R3-I3  Grant support for digitalisation 
C1.1.2. R4-I1 
C1.2. R1-I1 

Support for Digital Innovation Hubs 
Revitalisation, construction and 
digitalisation of the energy system and 
supporting infrastructure to decarbonise the 
energy sector 

0% 

0% 

8.0 

047bis 

40% 

33.2 

021 

0% 

021bis 

100% 

6.6 

021 

0% 

021bis 

100% 

0.4 

021 

0% 

021ter 

100% 

10.0 
27.3 
7.5 
387.8 

010 
010 
010 
033 

0% 
0% 
0% 
100% 

010 
010 
010 
033 

100% 
100% 
100% 
40% 

22  While  the  total  cost  of  Croatia’s  recovery  and  resilience  plan  exceeds  the  total  allocation  of  non-repayable 
financial support to Croatia, Croatia will ensure that all spending related to the measures mentioned in this table as 
contributing to climate objectives are fully financed by the funds from the Recovery and Resilience Facility. 

73 

 
 
 
 
 
 
 
                                                           
0% 

0% 

0% 

0% 

0% 

0% 

0% 

0% 

0% 

Measure/Sub-measure name 

Climate 

Digital 

Budget 
(EUR 
mn) 

Interv. 
field 

Coeff. 
% 

Interv. 
field 

Coeff. 
% 

Measure/ 
Sub-measure 
ID 

C1.2. R1-I2.a 

C1.2. R1-I2.b 

C1.2. R1-I2.c 

Fostering energy efficiency, heat and 
renewable energy to decarbonise the energy 
sector – SMEs part 
Fostering energy efficiency, heat and 
renewable energy to decarbonise the energy 
sector - industry 
Fostering energy efficiency, heat and 
renewable energy to decarbonise the energy 
sector – geothermal renewable energy 

30.0 

034bis 

100% 

30.9 

024bis 

40% 

30 

032 

100% 

C1.2. R1-I3.a  Use of hydrogen and new technologies - 

20.2 

077 

100% 

recharging points 

C1.2. R1-I3.b  Use of hydrogen and new technologies – 

9.1 

032 

100% 

hydrogen production and electrolysers 

C1.2. R1-I3.c  Use of hydrogen and new technologies - 

3.1 

029 

100% 

Solar 

C1.2. R1-I3.d  Use of hydrogen and new technologies - 

12.7 

022 

100% 

C1.2. R1-I4.a 

carbon capture and storage 
Biorefineries for the production of advanced 
biofuels Sisak - biofuels 

99.5 

030bis 

100% 

C1.2. R1-I4.b  Biorefineries for the production of advanced 

33.2 

022 

100% 

C1.3. R1-I1.b 

C1.3. R1-I2.a 

C1.3. R1-I2.b 

biofuels Sisak - carbon capture and storage 
Programme for the development of public 
sewerage – water supply 
Programme for the development of public 
water supply 
Programme for the development of public 
water supply – digital part 

60.2 

039bis 

40% 

129.6 

039bis 

40% 

8.3 

040 

40% 

011 

100% 

C1.3. R1-I3.a  Disaster risk reduction programme in the 
water management sector – risk reduction 
C1.3. R1-I3.b  Disaster risk reduction programme in the 

124.6 

035 

100% 

33.1 

050 

40% 

0% 

0% 

C1.3. R2-I1 
C1.4. R1-I1 
C1.4. R1-I2 

C1.4. R1-I3 

C1.4. R1-I4 

C1.4. R1-I5 

water management sector – green 
infrastructure 
Disposal reduction programme 
Electronic tolling system 
Improving the system of exercising the 
rights of persons with disabilities in the field 
of mobility 
National road transport electronic storage 
and data exchange system (NSCP) 
Reporting control system for road passenger 
and freight transport 
Monitoring of Transport of Dangerous 
Goods by Road (e-ADR) 

74 

146.0 
65.6 
2.0 

042 
063 
011 

40% 
0% 
0% 

0% 
100% 
100% 

063 
011 

7.7 

063 

1.9 

063 

2.5 

063 

0% 

0% 

0% 

063 

100% 

063 

100% 

063 

100% 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
C1.4. R2-I3.b  Removing “bottlenecks” on railway 

1.1 

069 

40% 

Measure/ 
Sub-measure 
ID 

C1.4. R2-I1 

C1.4. R2-I2 

C1.4. R2-I3.a 

Measure/Sub-measure name 

Reconstruction of existing and construction 
of second track of railway section Dugo Selo 
- Novska, sub-section Kutina - Novska 
(phase D) 
Modernisation of the line M604 Oštarije  
– Knin – Split 
Removing “bottlenecks” on railway 
infrastructure – TEN-T 

C1.4. R2-I4 

C1.4. R2-I6 

C1.4. R2-I7 

C1.4. R3-I1 

C1.4. R3-I2 

C1.4. R3-I3 

C1.4. R3-I4 

C1.4. R4-I1 

infrastructure - general 
Modernisation of Zagreb Kustošija - Zagreb 
Zapadni Kolodvor - Zagreb Glavni 
Kolodvor 
Use of green technologies in rail passenger 
transport 
Upgrading of the IT and sales system and 
modernization of trains with the IT system 
Modernisation programme for ports open to 
public traffic 
Procurement/construction of passenger ships 
used for regular coastal transport 
Construction of new cable ferry ‘Križnica’, 
Municipality of Pitomača 
Equipping ports and harbours with waste 
management infrastructure 
Procurement of alternative-fuel-powered 
vehicles for public urban and suburban 
regular transport 

Climate 

Digital 

Budget 
(EUR 
mn) 

Interv. 
field 

Coeff. 
% 

Interv. 
field 

Coeff. 
% 

140.7 

064 

100% 

0% 

39.8 

068 

100% 

18.8 

068 

100% 

29.2 

067 

100% 

13.3 

072bis 

100% 

11.3 

081bis 

40% 

40.8 

074 

100% 

0.8 

073 

100% 

1.5 

044 

40% 

39.8 

074 

100% 

6.4 

070 

40% 

070 

100% 

C1.4. R4-I2 
C1.4. R5-I1.b  Alternative fuels infrastructure at Zadar 

Modernisation of tram fleet 

59.7 
5.3 

074 
077 

100% 
100% 

airport 

C1.4. R5-I1.c.  Capacity building for solar energy at Zadar 

0.5 

029 

100% 

C1.4. R5-I2.a 

airport 
Research, development and production of 
new mobility vehicles and supporting 
infrastructure - infrastructure 

11.4 

073 

100% 

063 

100% 

75 

0% 

0% 

0% 

0% 

0% 

0% 

0% 

0% 

0% 

0% 

0% 
0% 

0% 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Measure/ 
Sub-measure 
ID 

Measure/Sub-measure name 

Climate 

Digital 

Budget 
(EUR 
mn) 

Interv. 
field 

Coeff. 
% 

Interv. 
field 

Coeff. 
% 

C1.4. R5-I2.b  Research, development and production of 

185.7  N/A23 

100% 

063 

100% 

C1.4. R5-I3.a 

new mobility vehicles and supporting 
infrastructure - vehicles 
Co-financing programme for the purchase of 
new alternative fuel vehicles and the 
development of alternative fuel 
infrastructure in road transport - vehicles 

21.2  N/A24 

100% 

0% 

C1.4. R5-I3.b  Co-financing programme for the purchase of 

15.6 

077 

100% 

0% 

new alternative fuel vehicles and the 
development of alternative fuel 
infrastructure in road transport - 
infrastructure 

C1.5. R1-I1.b  Construction and equipping of logistic 

37.3 

025ter 

40% 

0% 

C1.5. R1-I1.c 

distribution centres for fruit and vegetables - 
Construction of the energy efficient logistics 
distribution centres 
Construction and equipping of logistic 
distribution centres for fruit and vegetables - 
Investments into renewable energy sources 
(solar) 

1.6 

029 

100% 

0% 

C1.5. R1-I1.d  Construction and equipping of logistic 

38.1 

044 

40% 

0% 

distribution centres for fruit and vegetables - 
Equipping of the logistic distribution centres 
Agricultural Land Monitoring Programme 
Deployment of digital public services 
Smart Agriculture 
Traceability System 
Improving food donation systems 

C1.5. R2-I2 
C1.5. R3-I1 
C1.5. R3-I2 
C1.5. R3-I3 
C1.5 R4 
C1.6. R1-I1.a   Regional diversification and specialisation 
of Croatian tourism through investments in 
the development of high added value 

1.7 
1.9 
6.6 
1.7 
0.3 
49.4 

011 
011 
011 
011 
011 
050 

0% 
0% 
0% 
0% 
0% 
40% 

011 
011 
011 
011 
011 

100% 
100% 
100% 
100% 
100% 
0% 

23 The “Methodology for climate tracking” annexed to the Recovery and Resilience Facility Regulation (2021/241) 
does  not  set  out  intervention  fields  that  would  allow  for  climate  or  environmental  tracking  of  electric  vehicles  or 
plug-in  hybrid  vehicles,  except  for  vehicles  for  urban  transport  falling  under  intervention  field  074.  According  to 
Article 18 (4)(e) of the Regulation, the methodology should however ’be used accordingly for measures that cannot 
be directly assigned to an intervention field listed in Annex VI’. In this context, the Commission has applied a 100% 
climate contribution coefficient  for zero-emission vehicles  of all categories (this includes battery electric and fuel 
cell/hydrogen-powered vehicles).  
24 Ibid. 

76 

 
 
 
 
 
 
 
 
 
 
 
                                                           
Measure/ 
Sub-measure 
ID 

Measure/Sub-measure name 

C2.1. R1-I1 

C1.6. R1-I2.a 

C1.6. R1-I2.b 

C1.6. R1-I2.c. 

tourism products - general 
C1.6. R1-I1.b  Regional diversification and specialisation 
of Croatian tourism through investments in 
the development of high added value 
tourism products – energy efficiency 
Strengthening the competitiveness of 
entrepreneurs and fostering the green and 
digital transition of the tourism sector – 
large enterprises 
Strengthening the competitiveness of 
entrepreneurs and fostering the green and 
digital transition of the tourism sector - 
SMEs 
Strengthening the competitiveness of 
entrepreneurs and fostering the green and 
digital transition of the tourism sector – 
digital part 
Optimisation, Standardisation and 
Digitalisation of processes for strategic 
management and impact assessment of 
public policies 
e-National Professional exam - infrastructure 
e-National Professional exam – support 
services 
Improving pay systems in state 
administration and public services, HRM 
and COP systems – digital part 
Introduction of a model for hybrid access to 
the workplace – smartworking – non-digital 
part 
Introduction of a model for hybrid access to 
the workplace – smartworking – digital 
infrastructures 
Deployment of digital infrastructure and 
public administration services through the 
development of a conservation base system 
Improve the digital infrastructure and public 
sector services by developing the national 
archives information system and 
strengthening the national archives network 
- digitalisation 
Further optimisation and decentralisation of 
JLP(R)S through support for functional 

C2.2. R1-I2.a 
C2.2. R1-I2.b 

C2.2. R2-I2.c. 

C2.2. R4-I1.b 

C2.2. R2-I1.b 

C2.2. R3-I2.a 

C2.2. R2-I2.a 

C2.2. R3-I1 

77 

Climate 

Digital 

Budget 
(EUR 
mn) 

Interv. 
field 

Coeff. 
% 

Interv. 
field 

Coeff. 
% 

74.1 

026 

40% 

83.0 

047bis 

40% 

74.7 

047 

40% 

0% 

0% 

0% 

8.3 

100 

0% 

100 

40% 

1.2 

011 

0% 

011 

100% 

0.1 
0.6 

055 
011 

3.5 

011 

0% 
0% 

0% 

055 
011 

100% 
100% 

011 

100% 

1.1 

011 

0% 

011 

100% 

8.2 

055 

0% 

055 

100% 

10.8 

011 

0% 

011 

100% 

5.3 

011 

0% 

011 

100% 

0.9 

011 

0% 

011 

100% 

 
 
 
 
 
Measure/ 
Sub-measure 
ID 

Measure/Sub-measure name 

C2.3. R1 

C2.3. R2-I1 

C2.3. R2-I2 

C2.3. R3-I1 
C2.3. R3-I2 

C2.3. R3-I3 

C2.3. R3-I4 

C2.3. R3-I5 

C2.3. R3-I6 

C2.3. R3-I7 

C2.3. R3-I8 
C2.3. R3-I9 

C2.3. R3-I10 

C2.3. R3-I11 
C2.3. R3-I12 

C2.3. R3-I13 

C2.3. R3-I14 

C2.3. R3-I15 

C2.3. R3-I16 

blending – digital part 

Digital Croatia strategy and strengthening 
inter-institutional cooperation and 
coordination for a successful digital 
transition of society and economy 
Establishment of a central interoperability 
system 
Establishing a central data light repository 
and business analytics system 
Upgrading the Shared Services Centre 
Strengthening the capacity of the police to 
tackle cybercrime 
Establishing a one-stop shop for all e-public 
helpdesk services 
Consolidation of CEZIH health information 
infrastructure systems 
Digital Identity Card Deployment Project 

Investments in state information 
infrastructure networks 
Improvement of spatial planning systems, 
construction and state assets through 
digitalisation 
Creation of a digital mobile platform 
Establishing a new platform for the 
Electronic Public Procurement Bulletin of 
the Republic of Croatia 
Digitalisation and computerisation of the 
CES (eHZZ) 
ICT support modernisation (eHZMO) 
Digitalisation of the HZMO archives 
(eArhiva) 
Digital transformation of the Tax 
Administration 
Implementation of the non-cash payment 
system in the economy through eInvoices 
with integrated e-archives and active tax 
accounting 
Putting in place tourism applicative 
solutions with the aim of administratively 
relieving entrepreneurs and transforming the 
tourism model towards sustainability 
Digitalisation of processes in sport and 

78 

Climate 

Digital 

Budget 
(EUR 
mn) 

Interv. 
field 

Coeff. 
% 

Interv. 
field 

Coeff. 
% 

0.1 

011 

0% 

011 

100% 

14.0 

011 

16.6 

055 

34.5 
1.8 

055 
021 

4.1 

055 

13.3 

095 

0.9 

31.4 

011 

053 

23.9 

011 

4.3 
1.5 

011 
011 

7.6 

011 

17.1 
6.2 

011 
011 

56.6 

011 

14.2 

011 

0% 

0% 

0% 
0% 

0% 

0% 

0% 

0% 

0% 

0% 
0% 

0% 

0% 
0% 

0% 

0% 

011 

100% 

055 

100% 

055 
021qui
nquies 
055 

100% 
100% 

100% 

095 

100% 

011ter 

100% 

053 

100% 

011 

100% 

011 
011 

100% 
100% 

011 

100% 

011 
011 

100% 
100% 

011 

100% 

011 

100% 

5.3 

011 

0% 

011 

100% 

1.5 

011 

0% 

011 

100% 

 
 
Measure/ 
Sub-measure 
ID 

Measure/Sub-measure name 

C2.4. R5 

C2.3. R4 

C2.5. R1-I3 

C2.5. R1-I2 

C2.5. R1-I1 

C2.3. R4-I2 

C2.3. R4-I1 

recreation at local and regional level 
Enhancing connectivity as a cornerstone of 
the digital transition of society and economy 
Implementation of projects under the 
National Framework Programme for the 
Development of Broadband Infrastructure in 
areas where there is no sufficient 
commercial interest in investment 
Construction of passive electronic 
communications infrastructure 
Optimisation of State-owned property 
management 
Enhancing the Court Case Management 
System (efile) 
Improvement of land register information 
system and cadastre 
Development of a tool for the publication 
and search of court decisions 
Project and implementation of the Zagreb 
Justice Square project to improve access to 
justice and efficiency of commercial 
procedures and administrative disputes 
Implementation of energy efficiency 
measures to renovate obsolete judicial 
authorities 
A stable and resilient IT infrastructure for 
the Justice Information System 
Digitalisation of the Ethics System of Civil 
Servants 
Advancing the existing asset declarations 
system of state officials 
C.2.6. R1-I4.a   Supporting efficiency in the fight against 
corruption and organised crime – digital 
investments 

C2.6. R1-I3 

C2.5. R1-I4 

C2.5. R1-I5 

C2.5. R1-I6 

C2.6. R1-I2 

Climate 

Digital 

Budget 
(EUR 
mn) 

Interv. 
field 

Coeff. 
% 

Interv. 
field 

Coeff. 
% 

0.4 

053 

106.2 

053 

19.6 

051 

0.3 

011 

2.9 

011 

3.1 

011 

0.2 

011 

0% 

0% 

0% 

0% 

0% 

0% 

0% 

053 

100% 

053 

100% 

051 

100% 

011 

100% 

011 

100% 

011 

100% 

011 

100% 

67.9 

025ter 

40% 

0% 

10.5 

026bis 

100% 

0% 

16.0 

011 

0.3 

011 

0.1 

011 

1.3 

011 

0% 

0% 

0% 

0% 

011quat
er 
011 

100% 

100% 

011 

100% 

011 

100% 

C.2.6. R1-I4.b  Supporting efficiency in the fight against 

2.7 

026 

40% 

0% 

corruption and organised crime – renovation 
of buildings 
C3.1. R2-I1 
Digital transformation of higher education 
C3.2. R1-I1.b   Development of a system of programming 

agreements to finance universities and 
research institutes focused on innovation, 
research and development – digital part 
Strengthening institutional capacity of 

C3.2. R1-I2.a 

84.0 
5.9 

012 
009 

0% 
0% 

012 
009bis 

100% 
100% 

4.4 

021 

0% 

021quat

100% 

79 

 
 
 
 
 
Measure/ 
Sub-measure 
ID 

Measure/Sub-measure name 

universities and research institutes for 
innovation – digital investments 

C3.2. R2-I1.a  Developing an enabling model for 
researchers’ career progression and 
conducting cutting-edge scientific research 
in STEM and ICT fields – granting of 
scholarships 

C3.2. R2-I1.d  Developing an enabling model for 
researchers’ career progression and 
conducting cutting-edge scientific research 
in STEM and ICT fields – Research support 
digital 

C3.2. R3-I1.e 

C3.2. R2-I2.a 

C3.2. R3-I1.d 

C3.2. R2-I2.b 

C3.2. R2-I1.e  Developing an enabling model for 
researchers’ career progression and 
conducting cutting-edge scientific research 
in STEM and ICT fields – support for start-
ups 
Investing in research – technology 
infrastructure in STEM and ICT fields – 
digital equipment 
Investing in research – technology 
infrastructure in STEM and ICT fields – 
digital research 
Introducing a more functional R & D & I 
project funding programming framework – 
spin-offs in digital field 
Introducing a more functional R & D & I 
project funding programming framework – 
digital research cooperation 
Develop and implement new targeted active 
employment policy measures for the green 
and digital transitions of the labour market – 
green jobs 
Develop and implement new targeted active 
employment policy measures for the green 
and digital transitions of the labour market – 
digital jobs 
Setting up a voucher system for the 
education of employed and unemployed 
people – green jobs 
Setting up a voucher system for the 
education of employed and unemployed 
people – digital jobs 
Implementation of vouchers for the 

C4.1. R3-I1.a 

C4.1. R1a  

C4.1. R3b 

C4.1. R1b 

C4.1. R3a 

80 

Climate 

Digital 

Budget 
(EUR 
mn) 

Interv. 
field 

Coeff. 
% 

Interv. 
field 

Coeff. 
% 

er 

12.1 

108 

0% 

108 

100% 

3.1 

009 

0% 

009bis 

100% 

7.4 

016 

0% 

016 

40% 

15.0 

055 

0% 

055 

100% 

15.0 

021 

0% 

021quat
er 

100% 

19.2 

018 

0% 

018 

40% 

19.2 

021 

0% 

021 

40% 

102.2 

01 

100% 

0% 

43.8 

108 

0% 

108 

100% 

0.0 

01 

100% 

0% 

0.0 

108 

0% 

108 

100% 

27.9 

01 

100% 

0% 

 
 
 
 
 
Measure/ 
Sub-measure 
ID 

C4.1. R3-I1.b 

C4.3. R1-I1 

C4.3. R1-I2 

C4.3. R3-I2 

C4.3. R3-I3 

Measure/Sub-measure name 

education of employed and unemployed 
persons – green jobs 
Implementation of vouchers for the 
education of employed and unemployed 
persons – digital jobs 
Enhancing the digitalisation of social benefit 
systems between national and local levels 
Development of a web application on the 
possibility to receive social benefits at 
national level 
Enhancing the digitalisation of welfare 
systems and connecting welfare centres and 
social service providers 
Enhancing the digitalisation of welfare 
systems and implementing systems for the 
methodology for calculating prices for social 
services 

Climate 

Digital 

Budget 
(EUR 
mn) 

Interv. 
field 

Coeff. 
% 

Interv. 
field 

Coeff. 
% 

11.9 

108 

0% 

108 

100% 

0.1 

011 

0.4 

011 

0% 

0% 

011 

100% 

011 

100% 

0.5 

011 

0% 

011 

100% 

0.7 

011 

0% 

011 

100% 

C4.3. R3-I4.b  Construction and equipping of centres for 

9.8 

026bis 

100% 

0% 

C5.1. R1-I4 
C5.1. R1-I6 
C5.1. R2-I2 

C5.1. R4-I3 

C5.1. R4-I4 

C5.1. R4-I5 

C5.1. R5-I1 

C5.1. R5-I2 
C5.1. R5-I3 
C5.1. R5-I4 

the elderly (accommodation and services) – 
energy renovation 
Digital image diagnostics KBC Split 
Digital image diagnostics KB Dubrava 
Purchase and implementation of equipment 
for the establishment of the National 
Oncological Network and National 
Oncological Database 
Digitising the pathway through health 
institutions at secondary and tertiary levels 
of healthcare 
Developing a system for monitoring and 
preventing shortages of medicinal products 
in Croatia 
Introduction of a treatment outcome 
monitoring system for non-hospital patients 
with a focus on chronic patients in public 
pharmacies 
Digital integration of operating halls and 
robotic surgery in KBC Split 
TELECORDIS 
Teletransfusion 
Digitalisation and integration of operating 
rooms equipped with robotic surgery in 
KBC Sestre milosrdnica 

81 

2.7 
5.3 
10.6 

095 
095 
095 

0% 
0% 
0% 

095 
095 
095 

100% 
100% 
100% 

2.5 

013 

0% 

013 

100% 

1.4 

013 

0% 

013 

100% 

0.6 

013 

0% 

013 

100% 

8.0 

095 

0.6 
1.6 
7.6 

095 
095 
095 

0% 

0% 
0% 
0% 

095 

100% 

095 
095 
095 

100% 
100% 
100% 

 
 
 
Measure/ 
Sub-measure 
ID 

C5.1. R5-I5 

C6.1 R1-I1.a 

C6.1 R1-I1.c. 

C6.1 R1-I2.a 

C6.1 R1-I2.b 

C6.1 R1-I3 

C6.1 R2 

C6.1 R3a – 
digital part 

C6.1 R4 

C6.1 R4-I1a 

C6.1 R6 

Measure/Sub-measure name 

Digitalisation and equipping of KB Merkur 
diagnostic units 
Energy renovation of buildings – public 
buildings 
Energy renovation of buildings – multi-
dwelling buildings 
Renovation of buildings damaged in 
earthquakes with energy renovation – public 
buildings 
Renovation of buildings damaged in 
earthquakes with energy renovation – multi-
dwelling buildings 
Energy renovation of buildings with a status 
of a cultural good 
Developing a framework for ensuring 
adequate skills in the context of green jobs 
needed for post-earthquake reconstruction 
Efficiency gains, reduction of administrative 
burden and digitalisation of the renovation 
process 
Modernisation and integration of seismic 
data for the renovation process and planning 
of future construction and monitoring of 
public infrastructure 
Seismological data network development – 
digital part 
Pilot project for the establishment and 
implementation of systematic energy 
management and the development of a new 
financing model 

Climate 

Digital 

Budget 
(EUR 
mn) 

Interv. 
field 

Coeff. 
% 

Interv. 
field 

Coeff. 
% 

3.2 

095 

0% 

095 

100% 

85.2 

026bis 

100% 

36.5 

025bis 

100% 

354.8 

026bis 

100% 

59.1 

025bis 

100% 

39.8 

026bis 

100% 

5.3 

01 

100% 

0% 

0% 

0% 

0% 

0% 

0% 

2.0 

011bis 

40% 

011bis 

100% 

0.7 

055 

0% 

055 

100% 

8.7 

055 

0% 

055 

100% 

1.6 

011bis 

40% 

011bis 

100% 

82