AGP Executive Report

Croatian Defence Modernisation: Croatia’s Rafale jets proved a new operational capability after a mid-air refuelling exercise with Germany’s Luftwaffe, extending time in the air and boosting NATO-linked training. Port & Logistics: Rijeka Gateway marked its first year of commercial operations by reporting cooperation with Maersk and Hapag-Lloyd, handling 370,000 TEU and building rail links to Serbia, Hungary and Austria. Business & Regulation: HAKOM says Croatia’s postal market keeps shifting toward parcels as e-commerce drives record €115m revenue (+16.1% y/y), while traditional letters keep falling. Corporate Ownership: Porsche has completed its exit from Rimac Group and Bugatti Rimac in a deal expected to return about €1bn to Porsche, with HOF Capital and BlueFive taking over. International Justice: France is preparing an international arrest warrant for a suspected 1991 Ovčara-era war crimes suspect, raising hopes for the Nicolier family after 35 years. Sports (Croatia-linked): Marcelo Brozović is reported nearing a move to Al Sadd, while Martin Baturina is drawing attention after scoring and assisting in Como’s Champions League debut win.

Croatian Rafale Upgrade: Croatia’s Defence Minister Ivan Anušić says Rafale pilots trained in mid-air refuelling with Germany’s Luftwaffe, extending the jets’ operational endurance and deepening NATO cooperation. Postal Market Shift: HAKOM reports Croatia’s postal revenue hit a record €115mn in Q2 2026 (+16.1% y/y) as parcels surged to 18.4mn and now drive about 59% of income. Tax Policy for Inflation: Croatia is proposing a one-off 50% tax on “excessive” 2026 profit margins for firms deemed able to influence prices, targeting roughly 1,800 companies. Tourism Pressure Point: New data highlights Croatia’s extreme seasonality: accommodation and food jobs swing more than any other EU country, underlining the challenge of keeping work stable beyond summer. Waste & Incineration Debate: After the Lika waste scandal, reporting says Croatia is the only EU state without an incinerator, reigniting the question of where thermal treatment should happen. Business & Investment: Porsche has completed its €1bn exit from Rimac—selling its stakes in Rimac Group and Bugatti Rimac to a US-led consortium—while Rimac says management changes accompany the next phase.

Croatian EU stance on Serbia: Parliament Speaker Gordan Jandroković warned Serbia it “cannot count” on Croatia’s support for EU membership or accession talks if it continues its current political path after the “completely unacceptable” Ratko Mladić funeral, calling it contrary to European values. Defense & NATO cooperation: Croatia’s Rafale jets carried out mid-air refuelling in a joint exercise with Germany’s Luftwaffe, extending the fighters’ operational endurance and underlining deeper Croatia–Germany defence ties. Cost-of-living policy: The government advanced a package of measures to cushion energy and living costs, including support for households and businesses from Oct. 1, 2026 to Mar. 31, 2027, worth nearly €260m. Tax pressure on pricing power: Croatia is proposing a one-off 50% tax on “excessive” 2026 profit margins for firms deemed able to influence inflation, targeting companies with margins far above their 2023–2025 average. Tourism reality check: New EU data shows Croatia has the most seasonal tourism employment swings in the bloc, highlighting the challenge of keeping jobs stable beyond the summer rush. Waste & infrastructure: Croatia is again under scrutiny after reports that it is the only EU country without a waste incinerator, with the Lika scandal renewing debate over thermal waste treatment.

EU Housing Rules: A proposed EU “Affordable Housing Act” would let cities clamp down on holiday-home ownership in “housing stress” areas, potentially making it harder for Britons to buy second homes abroad—Croatia is flagged among likely hotspots. Energy Cost Relief: Croatia’s government adopted an 11th package of measures to shield households and businesses from energy-price pressure, worth nearly €260m and running Oct 1, 2026–Mar 31, 2027. Consumer Protection from Price Hikes: The same policy push includes steps aimed at limiting the impact of rising costs on everyday spending. Robotaxis in Zagreb: Pony.ai and Verne began fully driverless passenger rides on public roads in Zagreb, with bookings via the Uber app, marking a major regulatory and tech milestone. First-Home Support Demand: Croatia received 7,479 applications for first-home state support, with thousands processed and approved for payments. EU Accession Tensions: Croatia’s parliament speaker warned Serbia it cannot count on Zagreb’s support for EU membership if it continues the political path tied to the “unacceptable” Ratko Mladić funeral. Arms Procurement: Croatia signed/advanced deals for South Korean Chunmoo rocket launchers, as regional defense competition accelerates. New Tax-Advantaged Investing: Croatia is preparing a Croatian Investment Account from Jan 1, 2027, offering tax-free gains and withdrawals under conditions.

Croatia’s Hazardous Waste Plan: Prime Minister Andrej Plenković says the Lika toxic waste crisis will be handled by urgently burning about 650 tonnes in cement plants, with disposal to be completed within 45 days. Postal Sector Shift: Croatia’s postal market hit a new quarterly revenue record at about €115m in Q2 2026 as parcels surged to 18.4m (+13%) while traditional letters fell. Demographics & Families: The government is rolling out up to €15,000 support for larger families buying seven-seat cars, as Croatia tackles long-term demographic pressure. Jobs Snapshot: Croatia recorded 1.72m employed people in Q2 2026, with unemployment down to 84,000 in the same period. Tourism Momentum: Croatia surpassed 5m tourist arrivals in August, with 17.5m arrivals and 90.5m overnight stays in the first eight months. Defense Procurement: Hanwha Aerospace signed a €411.8m deal to supply 18 Chunmoo rocket launchers to Croatia, with deliveries planned through 2030. EU/Regional Politics: Bulgaria’s PM Rumen Radev backed the EU line condemning Ratko Mladić’s burial with military honours, calling it a pan-European position.

Defense & Security: Croatia signed contracts with South Korea’s Hanwha Aerospace for 18 Chunmoo K239 multiple rocket launchers in a deal worth about €435m (deliveries through 2029), with Croatia’s PM Andrej Plenković framing it as a major boost to deterrence and range alongside earlier HIMARS purchases. Justice & Criminal Law: Croatia is set to introduce life imprisonment with parole possible after 25 years from Jan. 1, 2027, plus a new post-sentence supervision measure for the most dangerous offenders. Regional Politics: The fallout from Ratko Mladić’s funeral continues to strain Balkan diplomacy, with EU criticism and renewed debate over “glorification” of a convicted war criminal. Foreign Policy: Croatia’s foreign minister raised concerns about Serbia’s handling of the Mladić funeral at an international conference in Riga. Tourism & Economy: Dubrovnik kept momentum with 566,529 passengers in August (+4.14% y/y), while Booking.com data shows 56% growth in searches for autumn stays. Environment & Public Trust: After the Omiš-area wildfire, preliminary damage estimates top €110m, with officials still assessing claims and emergency response questions. Business & Industry: Porsche has completed its exit from Bugatti Rimac and Rimac Group in a roughly €1bn sell-off, shifting ownership to a consortium led by HOF Capital.

Croatia Family Policy: Croatia opened applications for a pilot scheme offering families with four or more children up to €15,000 (50% of a seven-seat vehicle’s price, max €15,000) to support everyday transport and mobility, with extra points for single parents, families with children with developmental difficulties, and areas with weaker transport links. Croatian Infrastructure & Transport: Croatian Motorways says the new Crolibertas toll system is still on track to be rolled out within legal deadlines, after media reports raised concerns following procurement appeals. Port & Logistics: Rijeka Gateway reports strong early performance, with 370,000 TEU handled in its first commercial year and expectations to reach full capacity of the first investment phase in 2027. Local Governance & Environment: A major protest in Zagreb and wider Lika region continues to pressure authorities over delays and alleged illegal dumping of hazardous waste, with police arrests reported in the wider case. Foreign Affairs (Regional): Bosnia and Herzegovina’s foreign minister moves to declare two Serbian embassy officials “undesirable” after the Mladić funeral controversy, further straining Sarajevo–Belgrade ties. EU Security (Diplomacy): Latvia hosts European foreign ministers in Riga, with NATO’s eastern flank security and EU border funding for Ukraine support high on the agenda.

Croatian Defence Modernisation: Croatia signed a €33.2m deal to upgrade the Air Force’s Rafale combat communications (2026-2030), building a secure ground-to-air network with seven radio sites and cybersecurity features. EU Housing Rules: The European Commission proposed an Affordable Housing Act that could let cities restrict short-term rentals in “housing stress” areas, aiming to protect affordability without an automatic EU-wide Airbnb ban. Trade Balance Watch: Croatia’s exports rose to €16bn in Jan–Jul 2026 (+9.8%), but imports jumped to €28.6bn (+6.9%), leaving a €12.6bn deficit. Local Infrastructure: Zagreb opened Bazen Špansko, a €36.3m sports centre with the city’s first municipal pool in the west, including a sports pool, rehab pool, and accessibility upgrades. Education & Skills: New PISA results show declines in reading and maths across OECD countries, with Croatia among EU states scoring below the OECD average. Tourism & Costs: EU plans a €3 fee on small parcels from outside the bloc, potentially raising costs for Croatian shoppers on Temu/Shein/AliExpress. Sport (Nations League): HNS set Croatia–Spain ticket prices at €30–€65 and moved all ticketing to the federation’s mobile app. Regional Politics: Serbia’s Vučić called reactions to Ratko Mladić’s funeral “hysterical” and said Serbia will not “rush” into retaliation, while Montenegro’s opposition moved to oust its parliament speaker over condolences.

Adriatic Fisheries Cooperation: The GFCM has set up a new technical unit hosted by Croatia in Split to strengthen science-based, sustainable fishing coordination across the Adriatic. Water Security Push: Prime Minister Andrej Plenković says Croatia has invested €5.2bn in water management since 2016, aiming to cut flood damage and protect supplies as droughts and floods intensify. Toxic Waste Pressure in Lika: Tens of thousands rallied in Zagreb demanding urgent cleanup of illegally dumped hazardous waste and a halt to waste imports, as questions grow over how toxic material entered the system. EU Customs Cost for Online Shoppers: A new EU €3 fee on small parcels from outside the bloc could raise costs for Croatian consumers buying low-value items online. Defense Diplomacy & Missile Deal: South Korea’s defense minister is set to visit Croatia to discuss bilateral ties and attend the signing tied to Hanwha’s Chunmoo rocket artillery exports. Bathing-Water Results: Dubrovnik-Neretva County reports excellent sea quality at 122 of 127 tested beaches, with only two sites rated “satisfactory” but still meeting standards. Tourism Tech Launch: A new digital platform, “Meet Croatia,” has launched to centralize bookings and connect travelers with local tourism providers. EU Values vs. Mladić Funeral: Croatian officials renewed calls to suspend Serbia talks over the glorification of Ratko Mladić, saying it clashes with EU values.

EU-Serbia Fallout: EU leaders condemned Serbia’s “glorification” of convicted war criminal Ratko Mladic after his Belgrade funeral with military honours, warning it undermines Serbia’s EU path. Bosnia Diplomatic Retaliation: Bosnia and Herzegovina expelled two Serbian embassy officials over attendance at the funeral and moved to cut diplomatic ties to the “lowest possible level,” while also delaying a planned good-neighbour declaration. Serbia’s Political Response: Serbian President Aleksandar Vučić said he will dissolve parliament and call snap elections for October 25, framing the backlash over Mladic as hostility toward Serbia. Croatia Defence & Energy: Croatia approved a €544m deal for 18 South Korean Chunmoo rocket launchers (2026-2029) and temporarily blocked a diesel price shock by cutting excise duties and margins. Demographics & Local Life: Makarska recorded a rare natural population gain in 2025 (more births than deaths), while tens of thousands protested in Zagreb over toxic waste cleanup delays. Culture & Society: A Croatia Airlines flight turned into a tambura celebration for Brussels, and Dubrovnik lit up a landmark red for Duchenne awareness.

EU Foreign Policy & Balkans: EU leaders called Ratko Mladić’s Belgrade funeral “shocking” and “deeply regrettable,” after Serbian officials attended and military honours were given, warning it clashes with Serbia’s EU path. Bosnia-Serbia Diplomatic Fallout: Bosnia and Herzegovina’s FM Elmedin Konaković ordered embassy staff withdrawals from Belgrade and cut bilateral communication to the “lowest possible level,” with consular services shifted to Zagreb and Podgorica. Croatia’s Political Response: Former PM Jadranka Kosor urged the European Commission to fully suspend Serbia’s EU accession talks, citing the funeral’s “anti-civilisational” message. Domestic Politics: A new CRO Demoskop poll for RTL shows HDZ at its weakest in two years amid public anger over the Lika hazardous waste scandal. Croatian Economy & Security: An Osijek firm GAUSS plans to develop unmanned systems in Vukovar under a ~€5m project. Diaspora Funding: Croatia’s Central State Office for Croats Abroad opened a €3.3m call for non-profits supporting Croat communities abroad. Environment Protest: Tens of thousands marched in Zagreb demanding action on illegal toxic waste stored near Gospić. Tourism Watch: Dubrovnik’s nautical tourism cooled in August, with overnight stays down about 7%. Sports: Luka Modrić confirmed availability for Croatia’s Nations League campaign.

Waste Cleanup Pressure in Lika: Tens of thousands marched in Zagreb demanding action over 30,000+ tonnes of illegally stored hazardous waste near Gospić, after repeated government promises to start cleanup failed to deliver on the ground. Bosnia-Serbia Diplomatic Freeze: Bosnia and Herzegovina recalled embassy staff from Belgrade and suspended bilateral meetings, cutting communication to the “lowest possible level” after the glorification controversy around convicted war criminal Ratko Mladić. Croatia’s Defence Modernisation: The government approved the purchase of South Korea’s Chunmoo K239 rocket launchers (18 systems) for about €435m–€544m, to replace older artillery and boost long-range fires. Luka Modrić Returns for Nations League: Coach Slaven Bilić named Modrić in Croatia’s squad; he is set to earn his 203rd cap at 41 as Croatia opens Nations League play in late September. Housing Costs Surge: New-build apartment prices rose sharply in Croatia in H1 2026, with Zagreb averaging €3,518 per sq m (+18.9% y/y). Dubrovnik Nautical Tourism Slows: August saw a small drop in nautical arrivals and a larger fall in overnight stays, with the US still the top market.

War Crimes & Diplomacy: Crowds in Belgrade gathered for the funeral of convicted Bosnian Serb war criminal Ratko Mladić, with EU officials warning against glorification and Serbia’s return of his body already sparking regional political backlash. Environmental Accountability: Tens of thousands marched in Zagreb over hazardous waste illegally dumped near Gospić in Lika, with protesters demanding a nationwide plan, clear deadlines, and urgent cleanup after investigations linked the waste to imports from Slovenia, Italy and Germany. Tourism Housing Rules: Brussels moved toward tougher limits on short-term holiday rentals as Croatia tightens tourist apartment rules, raising the question of who bears the cost amid a wider housing squeeze. Croatia–China Connectivity: Air China launched a year-round Beijing–Bucharest–Zagreb route, framed as a “bridge of friendship” for trade, culture and tourism. Education: Education Minister Radovan Fuchs kicked off the new school year urging pupils to be curious, brave and persistent. Sports & Culture: Luka Modrić confirmed availability for Croatia’s Nations League; Croatia selected “God Will Not Help” for the Oscars’ international feature category. Public Access at Sea: An electrified fence on the island of Vis was removed after authorities found it blocked access to maritime public domain.

Toxic Waste Crisis: Tens of thousands marched in Zagreb in the “Walk for Lika, Walk for Croatia” protest, demanding urgent cleanup of an illegal hazardous waste dump near Gospić in central Croatia; authorities are investigating suspected imports from Italy, Germany and Slovenia, with protesters citing soil and groundwater contamination risks and calling for a nationwide waste-management plan within 20 days and a temporary ban on further waste imports. Local Governance & Tourism Rules: Brussels is moving toward tougher limits on short-term holiday rentals as housing pressure rises, while Croatia’s own tightening of tourist apartment rules could reshape how families earn from tourism. Energy Policy: The Croatian government is preparing an autumn package of measures, including steps toward possible nuclear power planning via a non-binding information procedure with potential suppliers and partner countries. National Politics & Education: Education Minister Radovan Fuchs says schools will open as planned despite heat, but warns that more than 4,000 first-grade enrollments have been postponed, urging parents to rely on professionals. Sports & National Pride: Luka Modrić confirmed he will stay available for Croatia’s UEFA Nations League matches, ending retirement speculation as he turns 41.

Hazardous Waste Crisis: Tens of thousands marched in Zagreb (“Walk for Lika, Walk for Croatia”) demanding urgent cleanup of an illegal toxic waste dump near Gospić in Lika, where authorities say 35,000+ tonnes were found in 2025 and prosecutors link suspects to imports from Italy, Slovenia and Germany; protesters accuse the government of delays and want a moratorium on waste imports plus a national waste plan within 20 days. Government Response: Prime Minister Andrej Plenković says a contractor has been selected for the first cleanup phase, while environmentalists and anti-corruption findings warn of soil and groundwater contamination risks. Sports & National Pride: Luka Modrić, 41 next week, confirmed he will stay available for Croatia’s UEFA Nations League matches against Czechia, Spain and England under coach Slaven Bilić. Education Watch: Education Minister Radovan Fuchs says schools open as planned, despite 4,000+ first-graders having enrolment postponed, and urges parents to rely on professionals rather than self-assessments. Local Life & Safety: A Zagreb parking complaint highlights a strict 15-minute purchase rule for a cheaper daily ticket, while police also seized high-speed e-scooters over safety concerns. Culture & Community: An Australian-Croatian ultramarathon runner completed an 827km coast-to-coast journey along Croatia’s shoreline, raising awareness for Creutzfeldt-Jakob disease.

Environmental Protest: Tens of thousands marched in Zagreb in the “Walk for Lika, Walk for Croatia” rally, demanding the government urgently clear more than 30,000 tonnes of illegally dumped hazardous waste near Gospić in Lika, after police and Europol arrests in 2025 and claims of contamination risk including “forever chemicals” in groundwater. Accountability Pressure: Protesters say authorities have moved too slowly, calling for a clear national cleanup plan, deadlines, and a temporary ban on waste imports, with Prime Minister Andrej Plenković having visited the site and said a contractor was selected for the first phase. Sports & National Affairs: Luka Modrić, turning 41, ended retirement speculation by confirming he will stay available for Croatia’s UEFA Nations League fixtures against Czechia, Spain and England under coach Slaven Bilić. Public Safety Enforcement: Zagreb police seized 15 high-powered electric scooters during a crackdown tied to traffic safety rules, alongside dozens of other offences.