What we resent the Government of the Republic of Croatia the most for their inconsistent crisis management, bad communication with entrepreneurs and the lack of concrete aid for the economy
Aside from organizing protests and collecting signatures for the petition, and the everyday fight for the rights and work of micro-, small and medium-size entrepreneurs in Croatia, Glas Poduzetnika announced also a request for assessment of the constitutionality of certain measures of the Government of the Republic of Croatia in their fight against the corona virus. Maruša Stamać from Glas Poduzetnika talks for Diplomacy & Commerce about further steps, how they will fight for the rights of their members and about all the current topics.
A large campaign of the Glas poduzetnika Association was held on Ban Josip Jelačić Square, with the participation of over five thousand people who complied with all the prescribed epidemiological measures. Let us remind our readers of the demands you made to the Government of the Republic of Croatia and how much those to whom the demands were addressed have actually heard you?
It is clear to us that the situation is currently as it is. It is also clear to us that the countries in Europe are shutting down. But what distinguishes Croatia from them are two things.
Firstly, epidemiological measures in Croatia are often illogical and discriminatory. Why can restaurants provide food for delivery, but cafés cannot sell coffee for delivery or takeout? Why are bakeries, newsstands and stores making a profit on coffee when that’s not their primary activity? Let’s be clear, coffee to go will not save the cafés, but discrimination has been corrected by allowing this. As though the situation is not complicated on its own, but the entrepreneurs now have to put up with injustice. Injustice is felt also when one set of rules applies to Jupiter, and another set of rules applies to all the rest of us bulls (to paraphrase the Latin proverb). And that is why we organized the big campaign on Bana Josipa Jelačića Square.
Another thing that differentiates us from many other countries in the EU is the lack of economic compensation. Countries like Germany and Austria, where a strict lockdown is in force, indeed do compensate this to their entrepreneurs. If the Government of the Republic of Croatia abolished the human and constitutional right to work due to force majeure, then they must compensate this adequately. This is what we keep repeating – compensation is necessary, economic measures must be follow the epidemiological measures. We also consider Minister Ćorić responsible for the entire situation, since he did not show the slightest understanding for entrepreneurs.
Some of our requests have been heard by the authorities, they corrected some of the wrongs committed against entrepreneurs, but that is nowhere nearly enough. Further, they also heard the cries for compensation, to which they coldly responded that there are no funds for such an affair. Well, that should be a priority! We see that there are funds for some other things, like the acquisition of Ina, for rescuing state-owned losers, but there’s no money for salvation of thousands of Croatia’s micro-, small and medium-size companies. That is something that we just can’t accept!
Everything seems to be as it was before, are you planning any new steps and which ones?
We are definitely thinking about the next steps, but we are yet see which steps to take. There might be a new, even bigger protest, that’s something that many of our members want. We will certainly file a request for assessment of constitutionality of certain measures. The catering industry and the fitness community are already working on that, with our strong support. We are also thinking about claims for damages. We’ll see. We are consulting with our colleagues from similar organizations in the European Union on everything. We are watching what they are doing in their countries and on EU level. It’s certain that entrepreneurs will not be left alone with their problems, for which they are not to blame.
Your petition for abolition of mandatory membership fees for Croatian Chamber of Commerce (HGK) has collected over 23,000 signatures. You managed to unite the opposition and the public in this matter, and initiation of work on systematic changes in HGK was announced as well. UGP has several requirements. What are they and how will you continue to fight for their realization?
Our main request is the voluntary membership and voluntary membership fee in Croatian Chamber of Commerce. So, we definitely do not want the chambers to be terminated, but we believe that voluntary membership could improve the quality of service. If the Croatian Chamber of Commerce had to fight for each of its members, it would have to provide a quality service, truly be an advocate of its members, defend entrepreneurs and the Croatian economy. However, today we have a situation that due to political staffing, the leaders of HGK applaud every decision of the Croatian Government, whether it is good or bad. We consider it a great success that the UGP united the opposition around the changes in the Law on the Croatian Chamber of Commerce, despite their differences. We are glad that they set aside their worldviews and stood by the entrepreneurs. Because of such pressure, the ruling party decided to change the Law. We will certainly keep track of what is going on and how the Law will change. The survey we conducted among our members is not encouraging. Namely, most of them think that the changes will be only cosmetic and that the Croatian Chamber of Commerce will continue to be financed from the budget. We consider this to be a bad thing and we will fight with all available means to really abolish the mandatory membership. HGK has become a symbol of non-transparency, political staffing and irresponsible spending of entrepreneurs’ money, so we believe that it is very important to give this institution a fresh start and show that the time has come for a different way of doing business.
What is it that, in addition to the above, UGP resents the Croatian Government the most in crisis management and how would you solve some of these problems?
What we resent the most is their inconsistent crisis management, bad communication with entrepreneurs and the lack of concrete aid for the economy. We believe that from the very beginning it was necessary to communicate what epidemiological measures would follow the numbers of those infected and what economic measures will come with that. It was necessary to communicate what will happen when the number of infected drops and what kind of dismissals will be applied. This is necessary for entrepreneurs to be able to plan their business. This kind of uncertainty is something that makes the already difficult situation even more difficult. Will the job preservation measure be extended, what will happen with fixed costs, what will be opened or closed? These are all questions that entrepreneurs ask themselves every day, and they aren’t getting any answers. Also, the adopted epidemiological measures must be the same for everyone and we must all adhere to them in the same way. There must be no exceptions that are very hurtful, not just for entrepreneurs, but for every citizen of this country.
The Sisak-Moslavina County, but also the Zagreb County and the City of Zagreb, were impacted by a strong earthquake. In addition to the bare struggle for life, many jobs are endangered, as well as the turnover and business operations of many. How to help the vulnerable in the area and what is most important in this regard?
The Glas poduzetnika Association (UGP), or more precisely, our Economic Council lead by Vuk Vuković, prepared an overview of successful and unsuccessful reactions to natural disasters worldwide. They reached a set of proposed measures for economic revitalization based on these experiences. When we talk about the Sisak-Moslavina County, it’s necessary to incite entrepreneurship activity in this area. We must do our best to prevent entrepreneurship in Sisak-Moslavina County from dying out, because that means the death of that area. The Glas poduzetnika Association proposes a complete tax relief. We request that in the period of 5 years, employees are not charged income tax, surtax, or contributions, and that in the period of 10 years, income tax in this area be 0%. We are also requesting an exemption from paying all forms of parafiscal levies for this area for citizens and companies for a period of 10 years, and maximum relief of regulatory processes of opening and closing companies and obtaining operating and building permits free of charge under urgent procedure. These measures must apply to all existing companies in the affected area, but also to any new company that decides to start a business in this region. We do not think this will have a significant impact on the budget as this area contributes less than 1% to domestic GDP.
The precondition for all this is a rapid reconstruction of households, infrastructure and business facilities.
Reconstruction in Zagreb and in Sisak-Moslavina County must be maximally transparent, and local and private companies and local workers must be hired as contractors, while the central government must help by fully subsidizing the procurement of construction materials for reconstruction of private homes, by co-financing energy renovations of houses and buildings, by taking on the full cost of reconstruction of infrastructure and public buildings and by giving interest-free loans to business entities that were impacted by the quake to allow their faster recovery.
Even though Croatia doesn’t have the funds from which a rapid reconstruction could be financed, we have the advantage of using EU solidarity funds precisely for this purpose. In addition to the funds from the rebalanced budget, we expect the central government to withdraw EU funds as soon as possible, from which the reconstruction would be financed or co-financed.
After implementing this set of measures, the Sisak-Moslavina County could become an example of how to successfully economically revitalize an area affected by a natural disaster. Otherwise, nothing good awaits that region.
As of spring we expect some kind of return to some normal living and business conditions. Tourism, catering, carriers, have the opportunity to return to normal business flows. What are the specific ways to help tourism workers, agencies, carriers, caterers to get back into operation if we keep in mind that Croatia is largely dependent on tourism?
I’m afraid that, if this continues, many tourism businesses will no longer exist by the start of the season. The tourism sector is the most affected sector in this crisis. Many tourism businesses were never formally closed, like carriers, travel agencies, event industry, but their turnover fell by over 90%. Precisely because they were not closed by the official decision of the National Civil Protection Headquarters, they are not entitled to compensation of fixed costs, they’re piling up losses, and help is nowhere to be found. Liquidity loans are still difficult to obtain, the only thing they have is a measure to preserve jobs for employees, but this is not nearly enough because, understandably, business costs are far higher.
Carriers have a big problem with leasing for which they simply do not have the means to settle. All moratoriums are now ending and the question is what’s next? They had been loud for a long time, and now they are silent because they are simply dying. According to the new law, travel agencies will have to return money to clients for everything paid within a few months, but hotels, airlines and the like do not return the money paid to them. Therefore, it will be a matter of days when many will close their doors. Many will not live to see this tourist season, and those who are there for it will repay all their debts for a long time to come. In order to avoid these dark scenarios, we believe that they should first be helped by reimbursing their fixed costs, and then with one-time financial aid and easy and fast access to credit lines.