3 Sep 2012

Croatia counts down to join Eurozone with optimism

By Belinda Liversedge

Comments

Croatia’s economy – like many European countries – is in recession. Preliminary government statistics calculate that the country’s economy contracted for a third consecutive quarter because of a decline in personal consumption and industrial production linked to Europe’s debt crisis.

Ironically, the date set for Croatia to join the apparent source of its woes, the European Union, on 1 July 2013,  is viewed with optimism by a portion of the Croatian superyacht industry, who see it as a chance to boost the sector’s growth.

The EU allocates a portion of its development fund to fuel the growth of sectors it sees as worthy of investment and potentially profitable. Already in Croatia, this clamour for investment has led to five people being indicted for marketing European Union business loans fraudulently. But for Croatia’s yachting and marina industries, there is ample reason to argue their case for investment, as the country continues to consolidate its position as an alternative European destination.

“Being a member of EU, Croatia would have access to the funds with much lower interest rates. We expect this will result in more direct investments into nautical tourism,” said Cem Ecevit, chief of financial operations at D-Marin’s Dalmacija marina in Croatia.



Jana Gacina at NCP refit, added that there were opportunities for EU funds but that these would have to be hard fought for.

“About three billion euros is predicted for Croatia development from EU funds, for the first three years of membership. As generally known the rules of using the EU funds are very strict. Hypothetically, marinas could apply if investment will be connected with sustainability, environmental protection, cross-border cooperation or communal infrastructure development: the main goals of EU funds.”



There are a number of areas that could stand to benefit from EU membership. Firstly, provisioning. Superyachts visiting Croatia enjoy the benefits of freshly caught fish and locally sourced produce – which is of the highest standard – but importation of luxury foreign brands, such as Caviar and Champagne, has been more problematic. Gacina is confident however, that “there will be absolutely positive impact of EU membership for the yachting sector.”

“The EU rule of 'free flow of goods and services among member countries' will [remove] all existing difficulties and custom procedures for importing luxury goods in Croatia, if the origin of the sender is within EU.”



BWA Yachting however, which supplies to about 25 ports and marinas in Croatia and has been operating in the country for a decade, is more circumspect about benefits.
 
“How Croatia’s entry into the EU will affect customs procedures and general governmental laws is really unknown at this point.  These are all aspects which are being laid out now by the government in preparation for entry. Once those are announced then we’ll have to determine how those will be applied and affect our industry. Other than just mere speculation at this point we really can’t hypothesise what will happen,” said Dorijan Dujmic, managing partner of BWA Yachting Croatia.
 
Accession to EU on a psychological plane draws both positive and negative reactions however. On the plus, it’s seen as the chance for Croatia to join the likes of Germany and France as serious platforms to do business in.

“For all of us dealing with yachting, open borders will mean less obstacles, less bureaucracy and chance to increase our business activities with European clients,” said Gacina. “So far Croatia was treated as a nice and attractive nautical destination but not as the place where you should invest and do serious business. EU membership could be a good starting point to change that view.”



On the other hand, any connection with the Eurozone will have negative connotations for many, whether or not it is founded in truth. “Timing couldn’t be worse. Unlike other Eastern European countries that joined in [a period of growth and prosperity] we will join in times of uncertainty, when some old EU members are seriously considering an exit,” said Gacina.

One thing is for certain, Croatia will change and with it, its superyacht sector. It is hoped that along with these positive predictions, it will transform an already burgeoning yacht and marina industry into one that rivals European stalwarts, and in turn contribute to the recovery of an ailing economy.

Related Links

'Croatia Sinks Deeper into Recession': RTT News
D-Marin Website
NCP Refit Profile | NCP Refit Website

Comments

Add a comment