Croatia

VII - Six-Pack

The ‘Six-Pack’ is a package of six legislative measures (five regulations and one directive) improving the Economic governance in the EU. The Commission made the original proposals in September 2010. After negotiations between the Council and the European Parliament, the package was adopted in November 2011 and entered into force on December 13, 2011. Part of the ‘Six-Pack’ measures applies only to the Eurozone member states (see the individual titles below).          
The ‘Six-Pack’ measures reinforce the Stability and Growth Pact (SGP), among others by introducing a new Macroeconomic Imbalances Procedure, new sanctions (for Eurozone member states) and reversed qualified majority voting. Also, there is more attention for the debt-criterion.        
(
http://ec.europa.eu/economy_finance/economic_governance/index_en.htm)

Negotiation
VII.1
What positions did Croatia adopt in the negotiation of the ‘Six-Pack’, in particular in relation to the implications of the ‘Six-Pack’ for (budgetary) sovereignty, constitutional law
, socio-economic fundamental rights, and the budgetary process.

Croatia did not participate in the negotiation of the “Six-Pack”. No evidence of any kind of debate can be found.            

Directive 2011/85/EU 
Council Directive 2011/85/EU of 8 November 2011 on requirements for budgetary frameworks of the Member States

Implementation
VII.2
What measures are being taken to implement Directive 2011/85/EU on requirements for budgetary frameworks (required before 31 December 2013, article 15 Directive 2011/85/EU)?

Croatia was supposed to transpose the provisions of Directive 2011/85/EU into its national legal system by the end of 2013.[1] However, by the end of 2013 this Directive was not transposed. In December 2013, the Croatian Government was discussing the final proposal of the Law on amendments and modifications of the Law on Fiscal Responsibility adopted in 2010, which entered into force on 1 January 2011.[2] The main goal of this Law is transposition of Directive 2011/85/EU into Croatian law. However, this law is still not adopted by Croatian Government and proposed to the Parliament for adoption. (December 2013)

The 2013 Economic Programme of Croatia, adopted by the Croatian Government also pointed out that Croatia intends to prepare for publishing of the basic data on total revenue and total expenditure and on overall balance (surplus/deficit), monthly for the central government and social security funds sub-sectors and quarterly for the local government sub-sector in accordance with Directive 2011/85/EU.[3]

 

Implementation difficulties         
VII.3
What political/legal difficulties
did Croatia encounter in the implementation process, in particular in relation to implications of the directive for (budgetary) sovereignty, constitutional law and the budgetary process?

There is no evidence regarding any kind of difficulties or discussions in the implementation process.

 

Macroeconomic and budgetary forecasts   
VII.4
What institution will be responsible for producing macroeconomic and budgetary forecasts (article 4(5) Directive 2011/85/EU)? What institution will conduct an unbiased and comprehensive evaluation of these forecasts (article 4(6) Directive 2011/85/EU)?

The Directive has not yet been transposed into Croatian legal system, but will have to be by the end of 2013.

 

Fiscal Council   
VII.5
Does Croatia have in place an independent Fiscal Council (article 6(1) Directive 2011/85/EU: ‘independent bodies or bodies endowed with functional autonomy vis-à-vis the fiscal authorities of the Member States’)? What are its main characteristics? Does Croatia have to create (or adapt) a Fiscal Council in order to implement Directive 2011/85/EU?

In 2011, on the basis of a Decision of the Croatian Government, the Fiscal Policy Committee was adopted, in accordance with the Law on Fiscal Responsibility. It is a professional and independent body whose main goal is to advance the public system finance and to monitor the fiscal rules established by the Croatian Law on Fiscal Responsibility adopted in 2010, which entered into force on 1 January 2011.[4] It consists of seven members who are characterized by high level of professional experience in the area of public policy and distinguished personal reputation. The Committee members have to be independent and impartial, any conflict of interests is strictly prohibited. The main tasks of the Committee are, first, to examine and verify the application of the fiscal rules, second, to analyze and check the proposals of the Government of Croatia regarding the annual projections and the state budget, and, third, to assess the measures whose goal is to improve the efficiency and sustainability of the system of public finance.  The Committee publishes its findings at least twice a year at the official website of the Ministry of Finance.

 

No information is provided whether it fulfils the criteria imposed by Directive 2011/85/EU


Regulation No 1176/2011 on the prevention and correction of macroeconomic imbalances           
(
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:32011R1176:EN:NOT)

MEIP difficulties      
VII.6
What political/legal difficulties
did Croatia encounter and what debates have arisen, in particular about implications of the regulation for (budgetary) sovereignty, constitutional law, socio-economic fundamental rights, and the budgetary process?

No information on that in Croatia.


Regulation No 1175/2011 on strengthening budgetary surveillance positions          
(
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CONSLEG:1997R1466:20111213:EN:PDF)

MTO Procedure 
VII.7
What changes to the rules on the budgetary process are made to accommodate the amended Medium-term Budgetary Objective (MTO) Procedure?

No rules of that kind have yet been made.[5]     

European Semester     
VII.8
What changes have to be made to the rules and practices on the national budgetary timeline to implement the new rules on a European Semester for economic policy coordination (section 1-A, article 2-a consolidated Regulation 1466/97)?

Croatia has already been, unofficially, participating in the 2013 European Semester. This is why Croatia submitted its Economic Plan to the European Commission for assessment in April 2013, but its application in practice is only expected as of 2014.[6]

Croatia did not get any recommendations as other Member States, but the European Commission just assessed its Economic Programme and it pointed out to the weak quality of business environment. The assessment made by the European Commission pointed out to the problems with which the justice system is faced, high level of corruption and to the fact that Croatia will be, after Spain and Greece, the third country in the EU regarding the unemployment rate.

MTO difficulties
VII.9
What political/legal difficulties
did Croatia encounter and what debates have arisen, in particular about implications of the regulation for (budgetary) sovereignty, constitutional law and the budgetary process?

No evidence of any kind of political/legal difficulties can be traced. This can be explained by the fact that Croatia is only now becoming a Member State. Before 1 July 2013, possible implications for budgetary sovereignty and process are primarily mentioned in the context that with the accession into the European Union, Croatia will limits its competences and powers in these areas.

Respect MTO      
VII.10
How is respect of the Medium-term Budgetary Objective included in the national budgetary framework (section 1A, article 2a consolidated Regulation 1466/97)?

No information.

Current MTO     
VII.11
What is Croatia’s current Medium-term Budgetary Objective (section 1A, article 2a consolidated Regulation 1466/97)? When will it be revised?

The current Croatian Medium-term Budgetary Objective, as pointed out in 2013 Economic Programme for Croatia, is to continue with the fiscal consolidation which is necessary for the sustainability of the burden on the society by the existing level of debt and costs of its financing, the reduction of the state budget expenditure is planned, but also of the budget expenditure of extra-budgetary users and the units of local government when compared with the original plan. In this context, selective cuts and reallocations are planned on the expenditure side of the budget to have as little negative effect as possible on potential growth, and the continuation of investments, although in a reduced volume, in water and transportation infrastructure, health-care and education.[7]     

Adoption MTO   
VII.12
By what institution and through what procedure is Croatia’s Medium-term Budgetary Objective adopted and incorporated in the stability programme (Eurozone, article 3(2)(a) consolidated Regulation 1466/97)?  

In Croatia, the medium-term budget objective is defined in the guidelines of the economic and fiscal policy that is proposed by the Ministry of Finance and adopted by the Croatian Government for the period of three years.  It still needs to be aligned with Regulation 1466/97.

 

Regulation No 1177/2011 on the excessive deficit procedure
(
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CONSLEG:1997R1467:20111213:EN:PDF)

EDP difficulties  
VII.13
What political/legal difficulties
did Croatia encounter and what debates have arisen, in particular about implications of the regulation for (budgetary) sovereignty, constitutional law and the budgetary process?

No legal difficulties have been notified. Again, the reason for that is that Croatia is becoming a Member State as of 1 July 2013.

Regulation No 1173/2011 on effective enforcement of budgetary surveillance    
(
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:32011R1173:EN:NOT)

Sanctions
VII.14
What political/legal difficulties
did Croatia encounter and what debates have arisen, in particular about implications of the regulation for (budgetary) sovereignty, constitutional law and the budgetary process?

Croatia is not a member of the Eurozone.     

General changes  
VII.15
What further changes have to be made to the rules on the budgetary process in order to comply with the Six-Pack rules?

No information known.

Miscellaneous
VII.16
What other information is relevant with regard to Croatia and the Six-Pack?

Not applicable.

[1]              Assessment of the 2013 Economic programme for Croatia, SWD (2013) 361 final of 29.5.2013, p. 11

[2] Official Gazette of Croatia No 139/2010

[3]              Economic Plan of Croatia, p. 40, available at: http://ec.europa.eu/europe2020/pdf/nd/ep2013_croatia_en.pdf

[4] Official Gazette of Croatia No 139/2010

[5]              Assessment of the 2013 Economic programme for Croatia, SWD (2013) 361 final of 29.5.2013, p. 7

[6]              Assessment of the 2013 Economic programme for Croatia, SWD (2013) 361 final of 29.5.2013, p. 8

[7] see: 2013 Economic Programme for Croatia, pp. 20-21, available in English at: http://ec.europa.eu/europe2020/pdf/nd/ep2013_croatia_en.pdf