Eurofound's EU PolicyWatch collates information on the responses of government and social partners to the COVID-19 crisis, the war in Ukraine, rising inflation, as well as gathering examples of company practices aimed at mitigating the social and economic impacts.
Factsheet for measure HR-2020-14/512 – Updated – measures in Croatia
|Country||Croatia , applies nationwide|
|Time period||Open ended, started on 02 April 2020|
|Type||Legislations or other statutory regulations|
Supporting businesses to stay afloat
– Access to finance
|Author||Predrag Bejakovic (IJF)|
|Measure added||12 April 2020 (updated 10 November 2021)|
Many small and medium business entities affected by the coronavirus pandemic face serious problems with variable capital. Therefore, the owners demand some form of aid.
Loans to be granted directly to small business entities under this Program include de minimis value in accordance with Commission Regulation (EU) No 1093/2010. 1407/2013 of 18 December 2013 on the application of Articles 107 and 108 of the Treaty on the Functioning of the European Union to de minimis aid.
The Croatian Agency for SMEs, Innovation and Investments - HAMAG-BICRO is established by the Government of the Republic of Croatia with the purpose of promoting SME development and promoting investment and innovation. The Agency is an independent institution under the supervision of the Ministry of Entrepreneurship and Crafts. HAMAG-BICRO enables loans to micro, small and medium-sized small business entities.
The target group of financial instruments COVID-19 Loan for variable (working) capital are micro and SME, which are faced with illiquidity problems and require variable capital. The amount of loan is up to HRK 750,000 (€100,000) with a maximum repayment period up to 5 years including a grace period of up to 12 months. Interest rate is 0.25% without processing fee.
The differences regarding the previous ESIF Micro working capital loans programs are the lower interest rates, the longer grace period and the possibility of settling accounts up to 3 months before the loan application is received. For this loan cannot apply the entities from fishery, aquaculture and agriculture, producers of tobacco and alcohol, manufacture and trade of weapons and ammunition; casinos and other sectors and activities excluded by the terms of the Program. For this type of loans and for Micro loans for rural development HRK 1.148 billion (€153,067 million) are available.
On 18 June, it was reported that businesses had made good use of loans intended to help businesses affected by the coronavirus crisis and that so far 5,128 requests worth HRK 343 million (€45.7 million) had been submitted by 900 businesses.
|Does not apply to workers||
One person or microenterprises
|Does not apply to citizens|
EU (Council, EC, EP)
Social partners' role in designing the measure and form of involvement:
|Trade unions||Employers' organisations|
|Role||No involvement||No involvement|
|Form||Not applicable||Not applicable|
Social partners' role in the implementation, monitoring and assessment phase:
On 3 July 2020, the Croatian Employers’ Association (CEA) in its letter to the Government of the Republic of Croatia, asked for clarification and answers to numerous ambiguities arising from the entrepreneur's application for the financial instrument "COVID-19 variable capital loan", approved by the Croatian Agency for Small Business, Innovation and Investment (HAMAG-BICRO). The CEA points out that despite the best intentions and quick reaction of the adoption of this measure, there are numerous omissions that endanger the business of the entrepreneurs and they cannot be tolerated. The biggest problem appeared in the application methodology itself, because it remained unclear whether entrepreneurs can apply only through the Financial Agency (FINA) portal or they have to do it directly through HAMAG-BICRO. Due to these ambiguities, some entrepreneurs have inacceptable applications, although not through their own fault.
The COVID-19 variable capital loan was one of the very important measures to help the economy, but it did not yield the expected results. At the beginning of July two months have passed since closing of the tender, and thousands of entrepreneurs who had applied have yet obtain the results whether they will get a loan or not. If a variable capital loan is allowed, then the process needs to be fast in order to immediately affect the liquidity of the company. Otherwise, in a few months, the company may no longer exist.
Eurofound (2020), COVID-19 loans for variable capital for microenterprises and SMEs, measure HR-2020-14/512 (measures in Croatia), EU PolicyWatch, Dublin, https://static.eurofound.europa.eu/covid19db/cases/HR-2020-14_512.html
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