Croatia Parliament approves new centre-right government

The Croatian Parliament has approved a new government led by a conservative party that won a parliamentary election earlier this month.

Prime Minister Andrej Plenkovic’s government won support late on Thursday in the 151-member assembly in a 76-59 vote. The remaining MPs were either not present or abstained from voting.

The new cabinet has 18 ministers, down two from his first government, and four deputy prime ministers, including Boris Milosevic, a Serb.

Gordan Grlic Radman remains foreign minister. He is seen as pivotal to keeping public finances on track for Croatia’s bid to adopt the euro by 2024.

Health Minister Vili Beros, who was the face of the previous Plenkovic government during the coronavirus pandemic, also retains his portfolio.

Plenkovic was the prime minister in the previous government that was also led by his Croatian Democratic Union party. 

The government also has the support in parliament of two small liberal groups and national minorities.

Plenkovic’s HDZ won 66 seats in the parliament in the July 5 vote while the main opposition party gained 41.

The main goal

Plenkovic said the new government’s main goal is to boost the Croatian economy, which has been hit hard by the coronavirus pandemic.

“Our key aim is to secure the welfare for our citizens … to preserve their health and jobs during the times of the pandemic,” Plenkovic said.

He said his government would work on raising living standards, promising to increase an average wage by the end of the four-year term to 7,600 kunas ($1,171) from the current 6,655 kunas ($1,025).

His government plans to reduce the income tax rates to 20 percent and 30 percent from the current 24 percent and 36 percent, respectively, and reduce the profit tax to 10 percent from 12 percent for companies with annual earnings of up to 7.5 million kunas ($1.1m).

The value-added tax for food products is planned to be cut to 13 percent from the current 25 percent, one of the highest VAT rates in the European Union.

Boosting the business climate and investments in a tourism-dependent economy and keeping public spending under control will be among the key challenges in the efforts to restore growth after an economic downturn of about 10 percent expected this year due to the COVID-19 pandemic.