Croatia’s new centre-right government approved

The Croatian parliament approved on Thursday the new centre-right cabinet led by PM Andrej Plenkovic whose Croatian Democratic Union (HDZ) won the most parliamentary seats in the general election held on 5 July. His coalition government is supported by two smaller liberal parties and representatives of the national minorities. Plenkovic headed the former HDZ-led coalition over the last four years.

Before parliament Plenkovic said his government would work on raising living standards, vowing to increase an average wage by the end of the four-year term to 7,600 kuna (€1,000) from the current 6,655 kuna. "Our key task is to secure welfare for our citizens ... to preserve their health and the jobs at these times of the (COVID-19) pandemic," Plenkovic said.

His government plans to reduce the income tax rates to 20% and 30% from the current 24% and 36%, respectively, and reduce the profit tax to 10% from 12% for companies with annual earnings of up to 7.5 million kuna. The value-added tax for food products is planned to be cut to 13% from the current 25%, one of the highest VAT rates in the EU.

Most of the ministers from Plenkovic's previous cabinet remained in office, including Finance Minister Zdravko Maric who is seen as pivotal to keeping public finances on track for Croatia's bid to adopt the euro by 2024. This month Croatia entered the European Exchange Mechanism (ERM-2), a waiting room of at least two years before the euro adoption.

Similar articles