In the light of the preparations of Croatia to join the EU, the policy concerning state aid allocated to enterprises will have to be re-examined. It was agreed in the 2005-2007 pre-accession economic programme of the Government of the Republic of Croatia that the state aid policy had to be harmonised with that in the EU, i.e. that the amount of state aid in Croatia had to be reduced and re-channelled to horizontal targets.
Research carried out in the Institute of Public Finance established that the volume of state aid in Croatia was large and was to a great extent targeted to certain sectors of the economy, namely shipbuilding, tourism and transportation. In addition to direct subsidies from the budget, a number of indirect forms of state aid were used – tax reliefs, soft loans, government guarantees, tax deferrals and the like.
Future policy toward state aid in Croatia will have to follow the recommendations of the EU. For this reason, we need to look at the sectors and companies in which the state invests its funds today and to propose a strategy for reducing and redirecting subsidies in the coming period. In addition to the reduction and redirection of state aid, it is equally important that the policy towards state aid includes an increase in transparency in the system of allocation and control of their use. Recently, the EU has been developing methods for monitoring ex-ante and ex-post efficiency of aid, so this, no less important, aspect should become an integral part of Croatia's future aid policy.