Marko Primorac

Financial performance of major public enterprises in Croatia from 2006 to 2014

The aim of this paper is to present basic characteristics of state-owned enterprises in Croatia, assess their financial operations and identify major trends in their operations and long-term development prospects. The analysis is carried out for the period from 2009 to 2014. The paper gradually examines financial operations, management system and the systems of accountability and transparency in state owned enterprises. The particular emphasis is on the comparative overview of major state-owned enterprises’ missions and the extent to which they serve public purposes. Moreover, the paper evaluates capital investment plans and provides proposals for the reform of state-owned enterprises in Croatia. In all state-owned enterprises, a serious organizational restructuring - adjustment of the organizational structure and number of employees is still expected.

Public debt and fiscal risks in the European Union

At the beginning of 2015, the Statistical Office of the European Commission ? Eurostat ? for the first time released data on contingent liabilities and non-performing loans of European Union (EU) member states. Contingent liabilities include guarantees, liabilities related to public-private partnerships and liabilities of public corporations that are controlled by the state, but excluded from the statistical coverage of general government. The scale of the contingent liabilities of member states reveals a completely new image of their indebtedness and exposure to fiscal risks, and also raises the issue of the need to redefine the Maastricht fiscal criteria. It is obvious that member states ? under pressure from budgetary restrictions (in line with the Maastricht criteria) ? are creating liabilities that certainly affect the growth of public debt. At the same time these liabilities were only until recently beyond the reach of Eurostat.

Organisation and financing of football clubs in Croatia

The football has been gradually transformed from a sport game and a popular social phenomenon into a market activity attracting significant foreign investment all over the world. Clubs are increasingly investing in the transfer of players which is why this sector grips attention in the economy and fiscal systems. There is a set of dilemmas relating to the legal status of football clubs in Croatia, their accounting policies and tax liabilities, but also the subsidies they receive from the public sector. It is reasonable to wonder to what extent football remained in the area of public - sport and financial - interest and to what extent is it subject to private interests, driven by profit motives. To the extent they are dominated by private interests, football clubs should be deprived of preferential tax treatment, significant public subsidies and other benefits enjoyed at the burden of the public sector.

The effectiveness of fiscal equalisation in Croatia

The main objective of this paper is to examine the effectiveness of fiscal equalisation instruments in Croatia. Fiscal equalisation policy in Croatia is conducted through the personal income tax revenue sharing and the distribution of current grants from the central government budget to regional and local government units. However, the application of these instruments often relies on criteria that are not economic in nature. Therefore, this paper tests the hypothesis of the ineffectiveness of fiscal equalisation system in Croatia. The Gini coefficients are used to measure inequalities in fiscal capacities of local government units before and after the application of fiscal equalisation instruments. If the value of the Gini coefficient after the application of certain equalisation instrument is lower than before, that instrument is effective in alleviating fiscal inequalities and vice versa. It is found that the Croatian fiscal equalisation system mitigates local fiscal inequalities, but with the negligible effect.