AGP Executive Report

EU Pay Transparency: New EU salary transparency rules are now in force, but Croatia is still finalising the laws needed to fully implement the directive—job applicants should get starting pay or pay ranges upfront, and employers can’t ask about previous earnings. Rail Investment: Croatia signed a €13m deal to modernise the Hum-Lug–Gornja Stubica railway line, funded via an EIB loan, aiming to improve local rail links to Zagreb and make public transport more competitive. Tourism Momentum: Croatia’s pre-season is strong, with HTZ reporting over 440,000 visitors currently in the country and a push to extend demand beyond peak summer. Labour Market Watch: A new debate is brewing over whether Croatia’s foreign worker boom is slowing, after a drop in newly issued work permits compared with last year. World Cup Context: FIFA says it will collect items after every match to document the 2026 tournament—while Croatia’s next big test is the Croatia vs Slovenia friendly in Varaždin on June 8.

Croatia’s Farm Support Boost: Croatia launched a new €47m package under the CAP Strategic Plan, offering farmers and food processors loans and credits with principal write-offs of up to 50%—a first in the EU—via HBOR and HAMAG-BICRO, with €27m earmarked for primary production in sectors like livestock, beekeeping, fruit and vegetables. Border Trade Disruption Risk: Bosnia’s Indirect Taxation Administration warns that if a new Croatia–BiH border-crossing agreement is applied on schedule, some Gradiška-area crossings could be suspended from June 9 for goods needing full inspection, potentially hitting carriers and citizens. Cyber Extortion Update: Silent Ransom Group (SRG) is shifting tactics by using fast-flux botnet infrastructure to rotate malicious domains, complicating takedowns and targeting data-leak extortion, including law firms. EU Pay Transparency Deadline Misses: Cyprus is among many EU states failing to transpose the pay transparency directive by the deadline, with the ETUC saying only Slovakia, Italy and Lithuania met it. World Cup Meets Business: England’s World Cup warm-up in Florida drew complaints over ticket pricing and empty seats, while the tournament’s expanded format and rising costs keep fueling debate.

Agriculture Finance Boost: Croatia rolled out a new €47m package under the CAP plan to help farmers and food processors access loans and credits, including principal write-offs of up to 50%—with €27m earmarked for primary production via HAMAG-BICRO, HBOR and the Paying Agency. Identity Documents Update: Over 13,000 Croatians with older identity cards marked “permanent validity” (issued before 1 Jan 2003) must replace them by 3 August, after EU security standards flagged the older cards as easier to forge. EU Pay Transparency Deadline Watch: Cyprus is among the majority of EU states missing the pay transparency directive deadline; an ETUC study says only Slovakia, Italy and Lithuania met it, while many others have drafts or timelines pushed to 2027. Transport & Rail Ambition: Coverage highlights Croatia’s “railway revival” push, with EU-funded upgrades on key corridors aimed at faster, more reliable services to compete with cars. Tourism & Local Economy: Vrgorac hosted the Dalmatian Pršut and Wine Days (9th edition) with 50+ exhibitors promoting certified pršut and local wines.

EU Social Climate Plan: Lithuania’s €884m plan (to 2032) backs energy-efficiency upgrades for 40,000+ vulnerable households, expands social housing, and supports micro-enterprises plus transport—incl. 7,000 EVs and new bike lanes. Croatia Infrastructure & Housing: A look at why major projects drag on in Croatia—permits, studies, procurement, financing, contractor capacity, disputes, and EU compliance all add friction. Zagreb Reconstruction: Zagreb is still wrapped in scaffolding more than six years after the 2020 earthquake, with residents and visitors questioning the pace. Croatian Economy & Finance: Croatia’s inflation is easing to 5.2% in May, but the broader slowdown and pressure on tourism landlords and fees remain in focus. Tourism & Travel: Croatia’s tourism growth story continues, alongside new routes and longer hours in key cities as the summer season ramps up. World Cup Business Angle: England ticket prices drop sharply as FIFA releases unsold seats; pubs expect a big boost if the team goes deep. Corporate Expansion: rhode (e.l.f. Beauty) expands to Mexico and adds Croatia among seven European markets. Work Pay Rules (EU): The EU Pay Transparency Directive pushes employers toward clearer pay info, aiming to narrow the gender pay gap.

Croatian Tourism Watch: Croatia’s National Tourist Board says 2026 is starting strong, with May bringing growth in both arrivals and overnight stays and expectations positive for June and the peak summer season; the US is highlighted as a key long-haul driver, boosted by new air links like United Airlines’ direct New York–Split route. EU Fiscal Oversight: The European Commission urges Croatia to tighten control of public spending, improve how state money is used, and steer investment toward long-term growth, warning that Croatia’s net expenditure growth is running above recommended limits. Local Economy & Housing: Croatian small entrepreneurs and private renters are pushing back on proposed tax increases, arguing higher burdens could hit entrepreneurship, investment and the rental market in an already tough housing environment. Tourism & Events on the Ground: Dubrovnik’s nautical tourism remains resilient, with May showing higher arrivals and overnight stays, while the Ston Salt Festival marks its 10th anniversary with an expanded summer programme aimed at extending the season. Infrastructure & Heritage: In Ludbreg, a €2m restoration of the Holy Trinity Parish Church is underway, with archaeological finds including human remains discovered during works. Aviation Safety: A small plane crash near Medulin in Istria killed at least four people, with investigations ongoing.

Croatia Economy & Jobs: Croatia’s average monthly net salary rose to €1,621 (median €1,500), with the biggest pay levels in IT (€1,904) and energy, while agriculture saw the slowest growth; tourism averaged €1,510 but with wide role-by-role gaps. Croatian Tourism: The Croatian National Tourist Board says 2026 is off to a strong start, with growth in arrivals and overnight stays and rising demand from the U.S., helped by new direct flights like United Airlines New York–Split. EU Policy & Money: EU ministers agreed on the next steps for the asylum and migration pact (starting 12 June) and the EU Home Affairs Council reviewed implementation progress, including the Eurodac rollout. EU Investment: At the EU–Moldova Investment Conference, the EU and partners mobilised up to €641m for projects in energy, digital infrastructure, education and sustainable agriculture. Energy Transition: New analysis says solar has saved Europe about €136m per day since the Iran war began, highlighting the role of renewables and storage in cutting exposure to fossil fuel imports. Business & Trade (Croatia-linked): Cosmos Health expanded distribution of its Sky Premium Life brand across all 27 EU member states, including Croatia, via e-commerce platform Skroutz. EV Infrastructure (EU): The EIB is partnering with Ireland to speed up public EV charging, aiming for coverage in every community. Aviation Safety: A small aircraft crash near Medulin (Istria) killed four people, with reports suggesting foreign nationals among the victims.

EV Infrastructure Push: The European Investment Bank is partnering with Ireland to speed up a nationwide electric vehicle charging rollout, using procurement templates, financial models and guidance for local authorities. Water & Environment Tech: Croatia’s Josip Juraj Strossmayer Water Institute is rolling out a satellite-based monitoring system (with SeaCras) to detect pollution changes in rivers, lakes and seas earlier, after a Drava pilot linked satellite and field results. Tourism Tax Pressure: Croatia’s small entrepreneurs and private renters are pushing back against proposed tax increases for private accommodation, warning the minimum lump-sum per tourist bed could rise from €100 to €150 in top areas and trigger protests if talks fail. Inclusive Entrepreneurship: Zagreb opened a fully accessible coworking space for people with disabilities inside the URIHO complex, aiming to remove barriers to starting businesses. Banking Snapshot: Croatia’s banks posted €420m profit in a strong start to 2026, adding to a generally upbeat financial tone. Tourism Leadership: Croatia’s National Tourist Board reappointed Kristjan Staničić as director for another four-year term. World Cup Context: Toronto will host six 2026 World Cup matches, including Croatia vs Panama, highlighting the tournament’s spillover into travel and local business demand.

Croatia–China Green Partnership: Croatia’s ambassador in Beijing says cooperation with China is expanding in green development, clean energy and ecological transition, citing sustainability-focused infrastructure like the Pelješac Bridge. Croatian Banking Performance: Croatia’s banks posted €419.7m net profit in Q1 2026 (+12% y/y), with strong capital and liquidity and non-performing loans at 2.3%. Tourism & City Rules: Dubrovnik approved extended late-night opening for restaurants and bars during Croatia’s World Cup matches, while Split and other cities tighten nightlife alcohol rules to curb rowdy tourist behavior. EU Economic Roadmap: The European Commission’s 2026 Spring Semester package pushes competitiveness, skills, resilience and housing solutions while keeping fiscal sustainability front and center. Croatia–Serbia Border Bottleneck: Serbian reports say freight queues at crossings into Croatia worsened after Croatia’s new customs information system went live on June 1. World Cup Business Angle: Croatia’s World Cup campaign is also driving hospitality demand and fan spending, from extended venue hours to broader match-day planning. Regional Air Politics: Slovenia blocked an Israir flight, forcing diversion to Croatia, highlighting how geopolitics can spill into transport and business travel.

Banking Results: Croatia’s banks kicked off 2026 strongly, with combined net profit of €419.7m in Q1, up 12% year-on-year, helped by one-off gains and solid fee income; the sector remains well-capitalised and liquid, with non-performing loans at 2.3% and most banks reporting profits. Infrastructure & Health: Osijek’s new Clinical Hospital Centre (KBC Osijek) has moved into a key realisation phase after a land donation handover, clearing legal hurdles for procurement and construction; the project is valued at over €850m and is framed as a strategic investment for eastern Croatia. Housing Costs: Croatia’s property market is still holding prices, but buyers face rising renovation bills—often 20–35% of total investment—pushing the effective cost of older flats well beyond purchase price. Tourism & Travel: Dubrovnik-Neretva County kept momentum in May with 253,904 arrivals and 819,402 overnight stays (+2%); meanwhile Ryanair launched a new seasonal Budapest–Dubrovnik route (3x weekly) to boost the Hungarian market. Aviation Disruption: An Israir flight to Ljubljana was diverted to Zagreb after Slovenian authorities reportedly denied landing permission for political reasons, adding to tensions in Europe’s air travel. Rail Investment: HŽ Infrastruktura’s major Dugo Selo–Novska upgrade is set to be delivered by Afcons under a €677m bid, including a second track and signalling upgrades.

Tourism Enforcement: Dubrovnik is tightening rules again as the summer rush hits, with higher on-the-spot fines for public disorder like noise, public drinking and misbehavior in protected heritage zones—Split is also moving toward late-night alcohol sales limits to curb nightlife disorder. Local Economy & Cost of Living: Croatia’s inflation eased to 5.2% in May, but the demographic story is still grim: more Croats are returning from Germany than leaving, yet the scale is still far too small to fix workforce gaps. World Cup Business & Logistics: Philadelphia is laying out a 39-day Fan Festival and citywide security/transport plans for six matches at Lincoln Financial Field, while Toronto is leaning on a “transit-first” mobility approach for match days. Croatia in the Spotlight: Croatia’s World Cup campaign is framed through the lens of the Group L clash—Ghana coach Carlos Queiroz says the target is simple: qualify for the knockout stage. Industry & Investment: Navantia signed MoUs with Croatian partners for the navy corvette program, aiming to build local value chains and jobs. Finance Watch: Fed officials are skeptical about stablecoins’ real-world role, saying they mainly serve crypto trading, cross-border remittances and illicit finance.

Croatian Inflation Watch: Croatia’s consumer prices rose 5.2% year-on-year in May, with energy up 16.9% and services up 7.9%, keeping the country among the eurozone’s higher-inflation performers. Island Development & Transport: The government says it has invested €4.6bn in island infrastructure over the past decade, and has approved two new year-round fast ferry lines—Postira–Pučišća–Omiš–Split and Žirje–Kaprije–Šibenik—to improve daily connectivity and support local economies. Tourism Push in Germany: Croatia’s national tourist board opened a new Berlin representative office to strengthen its presence in Germany, citing that German visitors make up over 20% of overnight stays and that air links are increasingly key. Aviation Growth: Croatia Airlines carried 775,000 passengers in Jan–May 2026, up 20% year-on-year, with growth in every month and continued fleet renewal with Airbus A220s. Housing Pressure on the Adriatic: Reports highlight a year-round island housing shortage as more homes are tied up in short-term rentals or sit vacant outside peak season, leaving locals and workers squeezed. Demographics: Croatia’s birthrate crisis remains entrenched, with fertility around 1.4–1.5 children per woman and ongoing population decline. Business & Mobility: Croatia’s digital and transport ecosystem also gets a boost as new year-round catamaran routes are approved, while broader European mobility trends include robotaxi pilots expanding across major cities.

Retail & Competition: Sport Vision is expanding in Central and Eastern Europe after BDS Co filed a concentration with the North Macedonian antimonopoly commission to take control of eight companies in the Polish Marketing Investment Group, including Croatia—an 8-country sports footwear and apparel retail footprint. Croatian Economy & Policy: Croatia’s inflation is expected to ease as May price growth cools, while the government also moves on taxes and rules affecting businesses and tourism, including an “excess profit” tax and measures aimed at short-term rentals and drunk-tourist behavior. Tourism Demand Signals: Croatia’s tourism story stays mixed as wider host-city data show some World Cup hotel markets in the US are softer than feared—useful context for pricing pressure and capacity planning. Finance & Regulation: ECB leadership shifts as Boris Vujčić succeeds Luis de Guindos, while stablecoin debate heats up in EU policy circles with Fed’s Waller arguing stablecoins can add payment competition. Energy & Defense: EU SAFE defense-loan planning continues as Italy weighs reducing its request, potentially unlocking a second allocation for other member states including Croatia. Health & Social Infrastructure: Zagreb’s Patient Accommodation Centre “Križ” on Vrhovec starts taking oncology patients, funded via government support, company donations, and a new association to apply for grants. World Cup Business Angle: FIFA’s Club Benefits Programme is set to pay clubs for releasing players, with Croatia-linked squads among the beneficiaries as the 2026 tournament kicks off.

Croatia-EU & Markets: Croatia’s central banker Boris Vujčić has started as ECB vice-president, replacing Luis de Guindos, as the euro area leadership shifts and Croatia’s inflation is expected to ease in May (energy still the key driver). EU Consumer Rules: The European Commission has launched infringement steps against 20 EU member states, including Croatia, over delayed transposition of EU “green claims” rules aimed at cutting greenwashing. Energy & Household Costs: Croatia’s fuel prices may drop soon, with forecasts pointing to lower petrol and diesel from Tuesday. Tourism Watch: Dubrovnik keeps climbing: up to May 22 it logged 293,133 visitors and 850,159 overnight stays, with the UK and US among the top source markets. Digital Money Debate: Fed Governor Christopher Waller says dollar-backed stablecoins could broaden the reach of US monetary policy, while BoE’s Megan Greene points to tokenized deposits as a possible future alternative. Architecture & Housing: A Croatian expert warns that “matchbox” building trends reflect tighter economic and regulatory constraints, not just design choices. Sports & Business: FIFA’s Club Benefits Programme is set to pay out to clubs with World Cup players; Croatia’s wider region also stays in the spotlight as Croatia’s border dispute talk resurfaces in Serbia’s EU-accession debate. Travel Demand: Austrian survey data again ranks Croatia among top summer destinations, with strong car-based coastal demand.

Stablecoin Debate in Croatia: Bank of England policymaker Megan Greene said stablecoins may be overtaken by tokenised deposits within five years, while Fed Governor Christopher Waller argued stablecoins can broaden the reach of US monetary policy and should face clear rules rather than heavy limits. Media Ownership Watch: The European Federation of Journalists warned that Alpac Capital’s planned acquisition of Adria News Network outlets (including N1, Nova S, Vijesti and Danas) could raise risks for editorial independence amid regional political pressure. Croatian Infrastructure for Water Security: Work began in Opuzen on phase two of the Lower Neretva freshwater project (€85.5m total), adding pumping, storage and 119+ km of pipelines to cut salinisation and protect about 2,000 hectares. Tourism & Transport: RegioJet restarted the Prague–Croatia bus corridor to the Adriatic and added a new Prague–Rijeka–Crikvenica route from June 12. ECB Leadership Change: Boris Vujčić succeeds Luis de Guindos as ECB vice-president, bringing a new digital-euro focus. World Cup Money & Logistics: Ghana’s World Cup budget allocation (GH¢150m) is still awaiting Finance Ministry release, while each Black Stars player’s appearance fee is confirmed at $100,000.

Monetary Policy & Crypto: Fed Governor Christopher Waller said stablecoins could “broaden the reach” of US monetary policy as more countries use them, while arguing central banks don’t need CBDCs to solve problems. Inflation & Central Bank Independence: At a Dubrovnik conference, IMF officials warned political pressure is rising as governments push for unpopular anti-inflation moves, making central bank independence harder to maintain. Croatian Inflation Outlook: Croatia’s HNB expects May inflation to cool from April’s 5.8%, helped by slower food and services price growth, though energy costs remain the key risk. Tourism Rules: Croatia is moving to let local authorities restrict alcohol sales hours (8pm–6am) to curb “party tourism” and late-night disturbances. Digital Services: Jadrolinija launched “Barba AI,” an AI travel assistant handling thousands of enquiries to speed up ticketing and customer support ahead of summer. Real Estate Market: Croatia’s government approved draft rules to improve transparency and consumer protection in property transactions, including clearer standards for estate agencies. Transport & Travel Demand: Croatia faces its first major summer traffic test as Statehood Day kicks off heavier A1 motorway congestion toward the coast. Air Connectivity: Ryanair adds a new winter Zagreb–Warsaw (Modlin) route, boosting year-round links for business and tourism. Diaspora Politics: Plenković reopened debate on expanding parliamentary representation for Croatians abroad, potentially changing the current fixed three-seat setup. EU Housing Pressure: The European Commission is pushing “cost-neutral” structural housing solutions without new Brussels funding, aiming to avoid allowances and subsidies. Business-Adjacent Note: Croatia’s inflation slowdown and tourism crackdown come as the country prepares for another busy season, with operators watching early traffic signals.

Real Estate Rules: Croatia’s government approved new legislation to reform the real estate market, aiming to boost transparency and consumer protection, including clearer standards for estate agencies and limits on conditioning viewings on signing with an agency. Alcohol & Energy Drinks Regulation: Parliament adopted amendments to the Trade Act allowing local authorities to set shop alcohol sale hours, tightening age checks for alcohol and energy drinks (ID required, including at self-service checkouts, and online sales must verify age via e-Građani). Tourism Pressure & Scams: Croatia’s hospitality sector is facing a tougher off-season as revenue remains concentrated in July-August, while authorities warn of rising online tourism scams targeting visitors with fake listings and cloned booking sites. Short-Term Rental Backlash: Apartment owners are pushing back against new short-term rental rules and taxes, arguing the added administrative and financial burden could reshape the market. Central Banking & Inflation: IMF-linked commentary from Dubrovnik highlights renewed strain on central bank independence as policymakers delay rate cuts amid an inflation shock tied to higher energy prices. EU Mobility Data: New EU figures show Croatia has a 27.1% non-issuance rate for Schengen visas from India in 2025, with Slovenia and Bulgaria the strictest. Media Deal: Alpac Capital and United Group confirmed an agreement to sell Adria News Network (ANN), positioning the new owner as aligned with ANN’s editorial independence.