Croatia joining EU

From July 1st, Croatia is set to become the 28th member state of the European Union with a priority to meet the demands of EU membership.

The government also needs to raise Croatia’s competitiveness to compete in the large EU market and maximize the opportunities membership will bring, especially the absorption of a large amount of EU Structural Funds.

Under the current economic climate, this has put an extra pressure to the above objectives as the prolonged crisis has put Croatia’s aspirations to the test and the country has now been in recession for four years, losing almost 11% of its output.

The outlook for growth in 2013 remains weak, given Croatia’s dependence on economic cycles of the European Union and deteriorating conditions at home.

About half of Croatia’s trade is with the Eurozone, primarily with Germany and Italy, and the Eurozone is the source of about three-quarters of foreign-direct investment (FDI) flow into the country. Croatia also has a high concentration of banks whose ownership indirectly exposes them to the Eurozone crisis.

The agriculture sector in particular accounts for just 4% of GDP but employs 14% of the labour force. With 42% of the country’s population living in rural areas, agriculture is an important source of livelihood and protection of the rural environment is central to the EU Common Agricultural Policy (CAP). The Ministry of Agriculture has been working intensively on the harmonization and adoption of a number of regulations in the area of agriculture, food safety, veterinary and fisheries.

Agriculture is an important livelihood, however, land fragmentation, the structure of the agricultural plots with numerous small family farms (the average farm size is 2.4 hectares) and the age structure of the employed within the sector (20% of the employed in the agricultural sector are over 65) remains a constraint.

Now that Croatia is joining the EU, it will adopt the EU’s CAP, which will provide Croatia with about €3.5-3.7 billion over a period of 2014-2020.

The CAP will therefore provide huge opportunities for the further modernisation of Croatia’s agricultural sector and improvement of the quality of rural life.

To fully capitalise on these opportunities, Croatia will need to adjust its reform of the agricultural sector with the future EU support and this should include land fragmentation, increase in livestock and labour productivity via the modernisation of their current machinery to make the sector more competitive.

Please find below some interesting facts on Croatia:




Quarterly Rate of GDP


Source: Croatian Bureau of Statistics


Annual and average annual inflation rate


Source: Croatian Bureau of Statistics





Ag Prices



If you would like to find out more details about Croatia and how it will benefit your company, please contact us.


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