In Croatia, not many people or officials could have predicted finally achieving EU member status would find the country worse off. This Reuters report shows the ugly side of today’s European Union economics, Croatia and other states wallowing at the bottom of the coalition’s heap.
The EU with Croatia in dark green – courtesy Atoine85
Croatia, the EU bloc’s 28th member state, has an economy that continues to shrink where it counts most. The country with the most potential as a tourism destination, may end up being dragged down, not by tourism numbers falling, but because other member states simply outperform in manufacturing and in other sectors. This, along with the pressures already being felt from the rift between east and west over Ukraine, does not bode well for Croats.
Even Greece and Cyprus show more promise that Croatia, according to Reuters’ and other reports. Startups and investment there, other than in tourism, just aren’t anything to write home about. What’s even worse, Croatia tourism may be taking a big hit too. Just the other day we reported on Darko Lorencin, the Croatian Tourism Minister, making it easier for Russian tourists to visit. With ongoing sanctions against Russia, and an emerging Cold War mentality in the west, it looks more and more like those Russian travelers will be staying home this Summer. Maybe forever.
Formerly part of Yugoslavia, Croatia emerged from heated wars and worse to become the gem of that former republic’s fragmented parts, at least tourism and business wise. Today, though the wonders of Zagreb and Dubrovnik, Dalmatia and beyond still beckon, sagging economic conditions can spell disaster. The GDP of Croatia is the only one in the EU projected to sag. As private consumption and exports decline, Croatia and the Mediterranean island Cyprus are the only EU states whose GDP will shrink in 2014.
Finally, the message this sends to surrounding former Yugoslav nations is not good. If Croatia cannot make it in the EU, then most doubt the other states of Bosnia and Herzegovina, Kosovo, Macedonia, Montenegro, Serbia, and Slovenia may not fair even as well. Shipbuilding and industries that once propped up these economies during the era of Soviet influence, have all but dried up across this region.
View Comments (9)
Startups and investment there, other than in tourism, just aren’t anything to write home about.
Rimac Automobili is a Croatian startup that has been covered by CNN, Wall Street Journal, Forbes and many other media outlets.
I suggest you google Rimac Automobili and you will discover EU's answer to Tesla Motors.
The company's EV technology is actually more advanced .
Rimac Automobili is destined to become a multi billion dollars enterprise in the years to come.
Many members of EU parliament have visited the factory and are amazed with their engineering capabilities.
http://online.wsj.com/news/articles/SB10001424052702303376904579135881128871014
Here is another recent article about Rimac Automobili:
http://tech.eu/features/1107/rimac-automobili-croatia-funding/
Here is a one off Version of the "Concept One" that was developed or Applus under a non disclosure agreement:
https://www.youtube.com/watch?v=JduPgFtllPM
http://green.autoblog.com/2013/01/31/rimac-automobili-delivers-first-electric-supercar-wont-let-us/
The production version of the "Concept One' will be larger in dimensions and have improved technology and it will be the world's fastest super car with a 0-60 speed of less than 2.5 seconds.
Their plan is to mass produce more affordable models in the future as their company expands it's production capacity.
http://www.gtspirit.com/2013/08/22/first-impression-rimac-concept_one/
Now if we're finished over reacting to a news report that was factual. You might want to review the countless positive things we've said over the years about Croatia. The fact one of the world's most picturesque and culturally rich countries tied itself to a questionable currency and economic situation, has nothing to do whatever with the marvelous people, potential, and capability there.
As an investment, I think Croatia is will largely be gauged based on the overall eurozone and the country's position within it, which at the moment is dead last. It behooves all concerned to stray away from Washington and Brussels' tendencies to profess success, before having actually achieved it. Billions in untapped oil reserves make the Russian arctic a potential boom, but Ukraine and other geo-political crisis make that oil a mute point for now. Do you really think natural gas shipped from America is going to be a long term sustainable operation? Etc. Etc. Etc.
Sorry if we rained on a parade, but a little rain sometimes washes away the dirt and dust.
Always,
Phil
Croatia is a country that is always under estimated and it will prove itself finically over time like it has done in the past during the times of war and through sports :)
The Croatian President Ivo Josipovic is currently on a visit to the United States and has met with Joe Biden to discuss among other topics, Croatia's future role as an energy hub for Central and Eastern Europe.
Josipovic is currently in Houston, building partnerships with the world's top oil executives.
Here is a Croatian news report about his current trip:
http://dnevnik.hr/vijesti/hrvatska/mozemo-li-uskoro-u-hrvatskoj-ocekivati-americke-naftase---336156.html
Even though it is in Croatian you can tell Croatia's quest to become am important energy hub within the EU is more than realistic.
I just hope Mr. Biden's son does not show up on the board of directors of Croatia's biggest gas company. If Ukraine is any example of administration transparency, Croatia will have some oligarchs soon. Sorry to be cynical here, but the vice president has zero credibility about now.
I would also like to say that even though Croatia's economy is in it's 6th year of recession there have been many positive developments which should ensure Croatia's financial future.
The Croatian startup scene is thriving...Rimac Automobili is just one example of this. here is a partial list of some of the startups:
http://startupcroatia.com/scena/startups
Croatia's food and retail sector is flourishing during this recession:
Croatian food and retail companies Agrokor and Atlantic Grupa have literally bought out their regional competitors across the former Yugoslavia and today Agrokor has near monopolistic contra across the region with is current acquisition of Slovenia's Mercator to the point they have to liquidate stores across the region before the deal gets finalized.
Agrokor recently received an equity line of 1 billion USD and plans to expand into Russia soon.
Croatia's tourism industry has continued to blossom during this recession and is still no where near it's full potential. Mega multibillion dollar golf resort projects are in the works along the coast.
Croatia's tourism revenue can easily double in 10 years time.
Multiple Energy Deals
Croatia has three major energy projects in the works which will place Croatia as an exporter of natural gas and crude oil by 2020.
In addition to the ongoing crude oil and natural gas exploration in Croatia's side of the Adriatic, Croatia has signed a major natural gas deal with Azerbaijan which will see the development of a natural gas pipeline from Azerbaijan to Split, Croatia.
From this deal alone, Croatia will have be able to satisfy all it's annual natural gas needs and will basically have a surplus of 3 times Croatia's natural gas consumption, which will enable Croatia to export natural gas to our neighbors.
There is also an LNG terminal under construction on the island of Krk. The EU and the United States want Croatia to become an exporter of natural gas and Crude oil to offset the current dominance of Russian gas on the EU market.
American ships will transport natural gas from the U.S. to the EU via Croatia to the LNG terminal on Krk.
With these three projects in the pipeline...Croatia will have so much Crude Oil and natural Gas by 2020 that it will sink in it.
http://blogs.ft.com/beyond-brics/2014/05/05/croatias-hydrocarbon-tender-an-adriatic-game-changer/
The recently privatized shipyards will be playing a major role in building the oil platforms.
Croatis will become a space shuttle by 2020 :) Too many good things happening during this recession.
Last year, the UK Sunday Times reported that a survey by Norwegian seismic-imaging company Spectrum had estimated that Croatia could have offshore reserves of up to 3bn barrels of crude oil, which would give it the second biggest reserves in the EU.
$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$
Just in case you missed the big news from Rimac Automobili, a startup from Croatia :)
http://www.fiaformulae.com/en/news/2014/july/rimac-automobili-to-supply-concept_one-supercar-for-formula-e.aspx
Rimac Automobili is gaining in valuation by the second and will become the EU's answer to Tesla Motors.
"Startups and investment there, other than in tourism, just aren’t anything to write home about"
I think you need to start writing home about this startup loll
Agrokor has officially bought out Slovenia's Mercator just last week and tourism is up 15% so far in 2014.
With Atlantic Grupa already buying out Droga Kolinska in 2010,
Croatian food conglomerates now dominate the region with nearly 4,000 grocery stores all across the former Yugoslavia and own most of the regionally renowned food producing companies.
HS Produkt just received a 50 million dollar order from the Iraqi government for it's pistols, assault rifles and grenade launchers.
Not a bad recession of you ask me...
Now if we can get Kolinda Grabar Kitarovic to win the upcoming presidential elections, Croatia will get out of this recession much faster!
I suggest you google her and let me know how many presidents have that kind of resume.