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Debt Problems Mount at Croatia’s Biggest Company

After just six months in office, the conservative premier is assailed by the junior coalition partner and minority parties.

12 May 2017

Croatia’s prime minister is struggling to shore up his government against both political and economic storms, with a snap election looking increasingly likely.

 

Already facing a rebellion from junior coalition partner Most (Bridge), Prime Minister Andrej Plenkovic (pictured) is now coming under pressure from ethnic minority lawmakers outraged at statements by a hardline member of Plenkovic’s conservative Croatian Democratic Union (HDZ).

 

On Wednesday a deputy representing the Italian minority, Furio Radin, said he would not support the government unless it distanced itself from the outbursts of Milijan Brkic, a top HDZ official and deputy chair of parliament, who said Monday ethnic Croats should decide matters in the country, Balkan Insight reports.

 

If he wants to avoid early elections, Plenkovic badly needs the support of the eight ethnic minority deputies now that the coalition agreement with Most has collapsed.

 

Plenkovic’s relations with Most, a loose grouping of reformists, ran aground against the rock of Agrokor, the huge debt-burdened group now under state management.

 

In late April he fired three of Most’s cabinet ministers for failing to support Finance Minister Zoran Maric, a former Agrokor executive. Opposition parties called for Maric to resign over the growing scandal of the company’s $6 billion debt, Politico reported.

 

Agrokor’s state-appointed manager Ante Ramljak yesterday said some subsidiaries will be sold to cover some of the debts to creditors and suppliers, according to a separate report by Balkan Insight.

 

Ramljak told the Nova TV station that he expected no major layoffs in the group’s core retail, food, and agriculture businesses, adding that Agrokor will cease to exist as a unified group within a year.

 

 

  • Agrokor’s annual revenues of around $7 billion are equivalent to about a seventh of Croatia’s gross domestic product. It employs 30,000 people in Croatia and 20,000 in Bosnia and Serbia, many at its Konzum and Mercator retail chains. Another 150,000 work for its suppliers.

 

  • Another hardline HZD member, Zlatko Hasanbegovic, was expelled from the party over his decision to run for the Zagreb city council on a list headed by an independent candidate, Total Croatia News reports. Both he and Brkic have said the largest party of ethnic Serbs should not have a place in government.

 

  • Agrokor manager Ramljak said yesterday that 500 million euros of its “undefined debt” could not be accounted for, raising questions about its business activities, Balkan Insight says.

Compiled by Ky Krauthamer

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