Country report Croatia - Work Package 1 Ex post evaluation of Cohesion Policy programmes 2007-2013, focusing on the European Regional Development Fund (ERDF) and the Cohesion Fund (CF)
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After a period of continuous growth between 2000 and 2007, Croatia was hit severely by the crisis. The economy experienced 6 consecutive years of recession and returned to growth only in 2015. This prolonged period of recession particularly affected the labour market with the unemployment rate nearly doubling compared to the pre-crisis level. The public sector balance also showed a persistent move into deficit, which resulted in a large increase in government debt and led the Council to open an Excessive Deficit Procedure in 2014.
Despite its small size, Croatia has pronounced regional disparities in the economic and social development which are more evident within rather than between the Adriatic and Continental regions. Over the period 2000-2006, GDP per head increased in both regions leading to convergence towards the EU average. However, the economic crisis brought this trend to a halt in both regions although the impact was more severe in the Adriatic one.
For the period 2007-2013, Pre-accession Assistance (IPA), amounted to EUR 705.9 million, corresponding to 0.2% of GDP and 4% of the government capital expenditure over the 7 years. The rate of implementation of programmes, as reflected in payments of funding from the EU in relation to the total, has needed to be relatively fast since significant additional funding was added in 2013 after Croatia joined the EU. In practice, by the end of March 2016, only 64% of the total had been paid, implying that the rate of implementation needs to increase to ensure that all the available funding is spent by the end of 2016 as required.
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