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Croatia will need 70 bln kuna (9.2 bln euro) to meet anti-corona crisis spending in next three months

Author Iskra Pavlova
Croatia will need 70 bln kuna (9.2 bln euro) to meet anti-corona crisis spending in next three months Croatian finance minister Zdravko Maric/Photo: Croatian government

ZAGREB (Croatia), April 8 (SeeNews) - Croatia will need some 65-70 billion kuna ($9.3-10 billion/8.5-9.2 billion euro) in the next three months to cover the cost of the government's anti-coronavirus economic stimulus measures, finance minister Zdravko Maric said on Wednesday.

"Our focus at this moment is mainly on the domestic market, but parallel to this we are working on all activities needed for tapping the international markets," Maric said in an interview with local broadcaster N1 TV, as seen in a video file on its website.

Maric added that the government is considering not only tapping the international financial markets, but drawing loans from partner financial institutions such as the European Investment Bank, the World Bank and others, as well as the EU and its mechanisms.

Earlier in April, the government adopted a second stimulus package of anti-coronavirus measures, raising to 4,000 kuna from 3,250 kuna the minimum net wage it is paying out to the employees of troubled companies for the months of April and May. In the first stimulus package adopted in March, the government pledged to pay out 100% of minimum net wages in companies if employers do not lay off workers.

Under the April package, the government is also taking over the payment of social and pension contributions for the increased monthly income, which means a further 1,460 kuna per employee, or an overall 5,460 kuna per employee. Thus, the overall cost of the measure for preserving jobs for March, April and May reaches 8.5 billion kuna.

In addition, the new measures include freeing crisis-hit small businesses from the need to pay profit tax, income tax or contributions; postponing the payment of value added tax for all companies until they receive payment on invoices issued to their counterparties; as well as new regulations specifically targeted at supporting agriculture and tourism.

The government's first set of anti-crisis financial measures worth 30 billion kuna included deferral of payment of income and profit tax, social, health and pension contributions by three months, with an option to be postponed by a further three months. The measures also included interest-free loans to municipalities, cities and counties, as well as to the country's health and pension insurance institutes.

Moreover, state-owned development bank HBOR and commercial banks have decided to freeze and delay loan repayments, as well as to provide financing for working capital and for restructuring of existing loans.

(1 euro = 7.62490 kuna)