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EU Directive: No More Government Help For State Owned Companies

Come 1 July state-owned Croatian companies such as Jadrolinija, Croatian Rail and Croatia Airlines will no longer be allowed to spend a cent from the nation’s budget, according to a EU directive.

State-owned companies will not be afforded the luxury anymore of being able to cover staff wages or bonuses by dipping into the government coffers and must rely solely on profits for all operational costs.

The new legislation could spell problems for a number of state-owned companies. One which has been publicised widely is national carrier Croatia Airlines, who have been propped up by the government for a long time. One state-owned company who should not have a problem with the change is Jadrolinija, however experts say that with competition from abroad about to enter the ferry market they too will need to make changes in how they operate.

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