Predrag Bejaković in the new Press Release entitled Does it pay to stay longer in the world of labour? comments on the changes to the Retirement Insurance Law that the Government of Croatia in session on July 29, 2010, sent to the Parliament.

In the Press Release entitled Croatian Pension System and the Economic Crisis, Marijana Bađun summarises the situation in the Croatian pension system based on the data from the latest Croatian Pension Insurance Agency's publications of 16 July 2010.

The student association eSTUDENT organized a Case study competition 2010 that was held from January until May 2010. Many successful Croatian enterprises and institutions took part in the competition. This year the Institute of Public finance supported the competition too.

The students were faced with business problems which had to be solved in the best possible way, with the help from the mentors from the enterprises/institutions and faculties. The Institute of Public Finance asked the students to research the transparency of the local budgets for the 33 biggest Croatian cities, primarily using the information available on the Internet. We were interested in finding out how have the information on local budgets been presented to the public. Are they available to the citizens? Are they comprehensible for the readers? Are they accurate and timely? One of the assignments for the students was to rank the cities according to the transparency of their local budgets and recommend what can be done in order to help the public in better understanding of the local budget information.

We were most pleasantly surprised by the quality of the students’ works. It was a close call, and in the end the winners were Goran Luburić and Domagoj Kunštek. The students found that the most transparent information about the cities’ budgets were available in Kutina and Rijeka. The cities with the least transparent budgets were Vinkovci, Vrbovec and Makarska. The students also suggested what could be done to improve the level of understanding about the local budgets – the laws should prescribe the unified contents of the local budgetary documents which should be available on the official Internet pages of every city, easily accessible from the main page. Of course, this suggestion should be followed by the obligation for every local unit to have an official Internet page.

The effects of recession in 2009, together with a late fiscal policy reaction, led to a Croatian general government budget deficit of 11 billion kuna. Financing this deficit and other liabilities by new borrowing resulted in a public debt increase of 18% from 2008 to end-2009. Especially concerning might be the public debt denominated in foreign currencies which increased by 36% in only a year. You can read more about Budget deficit and public debt in Croatia in Newsletter written by Petar Sopek.

The latest issue of Financial Theory and Practice published articles How hard does the tax bite hurt? Croatian vs. European worker by Ana Grdović Gnip and Iva Tomić; Do countries catch cold when trading partners sneeze? Evidence from spillovers in the Baltics by Kingsley I. Obiora; Direct pollution cost assessment of cruising tourism in the Croatian Adriatic by Hrvoje Carić; and Employment of the project finance model in the supply of residential and commercial premises by Damir Juričić and Damir Brajković. In Public Finance Glossary Marina Kesner-Škreb explains Taxation policy in the European Union.

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The Institute of Public Finance and the Friedrich Ebert Stiftung have organized an international scientific conference on Finance and Growth in Central and Eastern Europe which was held in Zagreb, April 29-30, 2010. The discussed topics have covered areas such as financial crises, banking sector efficiency, financial integration, and economic growth. Fourteen papers were presented at the conference, by authors arriving from various European universities and international institutions. List of papers presented at the conference and their abstracts can be found here.

Our special guest and invited lecturer, Professor Fabrizio Coricelli from University Paris 1 Panthéon-Sorbonne (France), has presented his research on the implications of the global financial crisis for emerging European markets.

A thematic issue of the journal Financial Theory and Practice containing selected conference papers will be published later this year.

In the Press Release entitled Which Government to Trust? Katarina Ott comments on the “Economic Recovery Programme” presented by the Government on April 19, in the context of “Guidelines for Aid to Ailing Companies” of April 15.

Institute of Public Finance and Friedrich Ebert Stiftung have published the new edition of The Citizens' Guide to the Budget. The Citizens' Guide assists the citizens to learn about their rights and possibilities in the budget watch but also to find out what their obligations to the state are. The Guide encourages the citizens to join and actively participate in the budgetary process, to communicate with the authorities, to ask questions, to demand the important information about the budget to be published and publicly discussed before adopting budgets. The Guide can be useful to the representatives of legislative and executive branches of government, NGOs, academic community, students, media and, of course, the citizens.

In this Press Release entitled A Reversal of State Aid Trends in Croatia and EU, Marina Kesner-Škreb comments on the Croatian Competition Agency’s Annual Report on State Aid for 2008 which was discussed in the Parliament on February 24, 2010.

The new issue of the journal Financial Theory and Practice brings the works entered for the prof. dr. Marijan Hanžeković Foundation competition. The regular category prize has been awarded to Lana Ivičić and Saša Cerovac for the paper Credit Risk Assessment of Corporate Sector in Croatia. Besides the prize work, the journal brings the papers that in the opinion of the Committee for the Award of the Prizes and the reviewers satisfy a certain quality level. Marija Švec has written the paper about Underground Economy in Croatia, Mladen Latković and Ivana Liker have authored the paper on Sensitivity Analysis of Accumulated Savings in Defined Contribution Pension System and Anamarija Šeparović writes about The Influence of the Tax Wedge on Unemployment in OECD Countries in Comparison with Croatia. Ida Zelenka writes about the Tax Policy Impact on Consumption of Tobacco Products in Croatia and Marijana Bađun explains the term Budget Transparency in Public Finance Glossary.

Goran Vukšić in the Press Release entitled Models for Funding Measures for Economic Recovery and Development in Croatia comments on the new measures for spurring growth and employment that the Croatian Government brought in at a session held on January 28, 2010.

Mihaela Bronić in the Press Release entitled Cautiously with the Croatian Budget Deficit in 2010 comments on the quarterly report for EU candidate and pre-accession countries that the Directorate General of the European Commission for Economic and Financial Issues published on January 6, 2010.

This issue of Financial Theory and Practice contains three articles on the subject of financial crisis and it's affect on Croatia. The first article is Dubravko Mihaljek's The Global Financial Crisis and Fiscal Policy in Central and Eastern Europe: the 2009 Croatian Budget Odyssey, the second is Petar Sopek's The Effect of the Financial Crisis on Croatia’s Primary Budget Deficit and Public Debt, and the third article is Dražen Derado's Financial Integration and Financial Crisis. Mihaela Grubišić, Mustafa Nušinović and Gorana Roje have written the article Towards Efficient Public Sector Asset Management. In Public Finance Glossary Marina Kesner-Škreb explains FP7 - Framework Programme for Research and Technological Development.

Mihaela Bronić in the Press Release under the title Taxes in Croatia and OECD Countries comments on taxes on the basis of data from the publication Revenue Statistics 1965-2008 which was published by the OECD on November 26, 2009.

On the basis of the Proposed State Budget for next year, which the Government sent for adoption to the Parliament on November 21, 2009, Marijana Bađun analyses the Croatian pension system in Press Release under the title The Pension System and the Proposed State Budget for 2010 in Croatia.

Mihaela Bronić in Press Release under the title The Proposed Croatian State Budget for 2010 – Maintaining Social Peace comments on the budget which the Government sent to Parliament on November 21, 2009.

In the Press Release entitled The Croatian Economy on the Way to the EU: Structural Problems Need Resolving, Marijana Bađun comments on the situation in Croatia, based on the 2009 Progress Reports for candidate and potential candidate countries, analysed by DG ECFIN in November.

In the lost months we witnessed a huge debate on problems about the revenue side of State budget in Croatia, but facts on efficiency of Croatian’s Tax and Customs Administration as well as Financial Police in collecting public revenues are rarely mentioned. The Newsletter Efficiency of Croatian Tax Authorities by Vjekoslav Bratić answers the question of their efficiency in the period 1997-2006.

Recent discussions in Croatia have emphasized the need to lower tax burden on income from work. Is Croatia really among the countries with the highest tax wedge in the world, as one of the studies has suggested? The answer to this question can be found in the Newsletter The tax burden on labour in Croatia by Ivica Urban. The paper analyzes the level and structure of tax burden and calculates average and marginal tax rates for wide range of wage incomes. Croatian results are then compared to the other countries’ results.

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