Today, the European Commission positively assessed Croatia's recovery and resilience plan.

This is an important step for the disbursement of the EU grant of € 6.3 billion under the Recovery and Resilience Mechanism. These funds will contribute to the implementation of the most important investment measures and reforms from the Croatian Recovery and Resilience Plan. Funds are crucial for Croatia to successfully overcome the crisis caused by COVID-19.

The Recovery and Resilience Mechanism is the backbone of the NextGenerationEU instrument, which will provide € 800 billion (in current prices) to support investment and reform across the Union. The Croatian plan is part of the Union's unprecedented coordinated response to the COVID-19 crisis in order to address common European challenges such as green and digital transition, strengthening economic and social resilience and the cohesion of the single market.

The Commission assessed the Croatian plan on the basis of the criteria from the Decree on the Recovery and Resistance Mechanism. In its analysis, the Commission specifically considered whether investments and reforms in Croatia's green and digital transition are supported, whether it contributes to effectively addressing the challenges identified in the European Semester, and whether growth potential, job creation and economic and social resilience are strengthened.

Green and digital transition in Croatia

In its evaluation, the Commission found that 40% of Croatia's funding is for measures to support climate goals, which include reforms and investments to promote the use of renewable energy sources, energy efficiency, post-earthquake reconstruction and sustainable mobility. Climate change adaptation measures include improving water management and flood protection. The plan will also improve the protection of Croatia's great biodiversity by restoring the natural functions of rivers, floodplains and lakes. Investment support programs will support companies in green transition, including SMEs.

In evaluating the plan, the Commission found that Croatia allocated 20% of all expenditures to measures to support the digital transition, which includes investments and reforms to support gigabit connectivity and the digitization of public administration, transport, justice and higher education. The measures are also intended to increase broadband coverage to reduce the digital divide between urban and rural areas and to support businesses, including SMEs, to adapt their business to the digital environment, thus increasing competitiveness.

Strengthening the economic and social resilience of Croatia

The Commission considers that the Croatian plan contains a comprehensive set of complementary reforms and investments that contribute to effectively addressing all or a significant part of the economic and social challenges set out in the Council's recommendations to Croatia in the 2019 and 2020 European Semester.

The plan responds to recommendations to reform the education system with measures to supplement the curriculum, improve access to early and preschool education and introduce one-shift full-time classes. New active labor market policies for green and digital skills and jobs will be targeted at the most vulnerable groups, thus contributing to an increase in the low employment rate in Croatia. The problems of the Croatian social welfare system are solved by measures to improve the coverage, adequacy and direction of social benefits and measures that enable the development of new social services. The plan should improve public administration and the business environment in Croatia and remove obstacles to growth and investment, as set out on several occasions in the Council's recommendations. The plan envisages measures to increase the efficiency of the judiciary and sets out specific obligations to shorten the duration of court proceedings, reduce the number of unresolved court cases and continue the digitalisation of the judiciary. It is also planned to improve the prevention and sanctioning of corruption.

The plan is a comprehensive and appropriately balanced response to the economic and social situation in Croatia and thus contributes appropriately to all six pillars of the RRF Regulation.

Support for leading investment and reform projects

The Croatian plan proposes projects in all seven most important European areas. These are specific investment projects aimed at overcoming the challenges that are common to all Member States in areas where jobs are created and growth is achieved and are needed for the green and digital transition. Croatia, for example, has proposed € 789 million for the comprehensive renovation of private and public buildings, training and education of workers and experts in energy and post-earthquake reconstruction, and the establishment of single points of contact, which would reduce the administrative burden in the renovation process.

The assessment determined that none of the measures from the plan causes significant damage to the environment, which is in line with the requirements of the Regulation on the Mechanism for Recovery and Resilience.