Presentation on theme: "Scenarios about EU accession of Croatia Darko Šeperić Union of Autonomous Trade Unions of Croatia The impact of the global financial."— Presentation transcript:
Scenarios about EU accession of Croatia Darko Šeperić Union of Autonomous Trade Unions of Croatia The impact of the global financial crisis on the industrial sectors of Eastern European countries / Industrial change in Croatia Zagreb, Croatia, April 2009
Croatia and EU perspective 1991 – better starting position than most of CEE countries 1992 – 1995 – war 1995 – 2000 – quiet international isolation 2000 – Zagreb summit – start of negotiations on SAA 2001 – SAA signed 2003 – membership application 2004 – candidate status 2005 – start of accession negotiations 2012 – objectively-optimistic date of EU membership
Problems and halts in negotiations postponements & blockades: –ITCY cooperation (2005) –Fisheries and Ecological Protection Zone (2008) –border dispute with Slovenia (2008-?) real problems of EU accession –judical reform; corruption and organised crime –public administration reform –lack of long-term economic policy and budget planning –high state subsidies ( % BDP, EU %) –slow implementation of structural reforms – questionable implementation of adopted legislation
Fulfilling membership requirements by mid chapters opened but only 2 provisionally closed by April chapters opened, 7 closed progress reports from EC mostly positive, but certain critics appearing every year in the same form –lack of serious engagement in judical and public administration reform –slow return of refugees, cooperation with the ICTY 2008 – 5th speed –rapid process of legislation harmonisation with no studies of impact or costs/benefits –around 140 laws and 300 other legal documents harmonised in 2008 – 40% of total legislation harmonisation since 200.
Macroeconomic indicators average GDP growth rate points higher (around 14% of GDP growth rate) GDP 2025 up to 9% higher than outside EU –1,1% effects of common market –up to 7,8% effect of institutional reform overall price increase 1,4% (services, energy, housing) –lower shock than with NMS, because price level is already more harmonised with EU( % EU25, purchasing power 48%) prices of real estate increase 4% (NMS around 30%) positive balance to the EU budget (0.2% GDP in first 3 years) no effect on unemployment rate, but positive effect to employment rate Institute for Economics Zagreb, 2007.
Problems with macroeconomic indicators difficult to distinguish effects of membership from other effects (NMS accession in times of favourable global economic trends, effects of transition...) impossible to estimate full long-term effects aggregate data hides real social impact –increasing differences in income and social status –some groups of population benefit, but some lose from EU membership + threat of social dumping inside EU
Effects for the EU neglible positive impacts on macroeconomic indicators of the EU due to small size of Croatian economy –population increase 1% –total output increase 0.3% –Croatia = 0,3% of EU export EU demands transitional period for road transport
Value added across sectors, 2001 Netherlands Bureau for Economic Policy Analysis, 2007 contribution of most manufacturing sectors low contribution of services substantially bigger than in NMS Croatian economy vs. NMS
goods & servicesgoodsservices EU-2537,029,47,6 EU-1536,428,97,5 NMS-1054,744,410,3 CROATIA49,322,826,5 Export of goods and services as % of GDP (2005) Croatian economy vs. NMS services count for 45% of Croatian export, while world average is 20% (EU %)
Sectoral impacts increase in productivity and output as result of eliminating non-tariff barriers easier in manufacturing than in services –overall impact will depend on further liberalisation of services most developed sectors in Croatia are the ones with low potential for causing effects to common market –transport, services most export increase expected in sectors with low productivity and low share in total exports –textile, clothes
Sectoral impacts on production sectorHrvatskaEU-15EU-12 textile66,40,0-0,1 clothes manufacturing30,20,0-0,2 metal9,20,00,1 chemistry and nonmetal70,0 food production-3,10,00,1 Change of production level in % until as effect of common market Netherlands Bureau for Economic Policy Analysis, 2007
sectorCroatia textile89,2 metal67,2 transport equipment48,8 machinery and equipment34,9 chemistry and minerals37,8 other services-15,6 bussines services- 3.9 Change in level of production in % until 2025 as result of institutional reforms Netherlands Bureau for Economic Policy Analysis, 2007 Sectoral impacts on production
Sectoral impacts AGRICULTURE problems: high fragmentation + war effect (mines) on short term costs higher than benefits final result depends on results of accession negotiations and reforms undertaken before accession FISHERIES high costs of harmonisation with EU standards and regulations fleet modernisation needed on short term costs higher than benefits ENVIRONMENT PROTECTION costs: 5,5 – 10 billion EUR until 2023
Foreign direct investments 2005 cumulative FDI 2800 EUR per capita (40% GDP) –relatively high comparing to most transition countries problem: most of FDI in services (60%) and in already existing companies (privatisation) –banking sector, commerce, telecommunications –privatisation incomes spent for filling holes in budget –low share of green-field FDI causes: non-existence of clear strategy of economical and especially industrial development –The Industrial Policy of the Republic of Croatia in Preparation for Accession to the EU (2008)
Flexibilisation of labour legislation? Portugal3,7 Slovenija3,5 Italija3,4 Hrvatska2,76 Švedska, Njemačka, Estonija2,6 Slovačka2,4 Češke2,1 Velika Britanija0,9 SAD0,7 Employment Protection Legislation Index 2004.
Conclusions overall impact of EU membership depends much more on results of institutional reforms than exact date of accession lack of long term economic policy and sectoral costs and benefits analysis undermines chances of benefiting from accession as trade unions, we are more interested in overall impact on social picture of Croatia than macroeconomic indicators