Croatian Democratic Union (HDZ) vs. Social Democratic Party (SDP)

Hrvatski saborLPJ Issue 155, 2 November 2015

With Croatia’s 2015 parliamentary elections around the corner, the two leading coalition blocks, the centre-right “Patriotic Coalition”, led by the Croatian Democratic Union (HDZ), and the centre-left “Croatia is Growing, No Going Back” coalition led by the Social Democratic Party (SDP), are in for a tight race.

The HDZ and the SDP have announced their respective socio-economic programmes (i.e. the HDZ’s “5+ Croatia” and the SDP’s “Croatia is Growing, No Going Back”); both contain vague and general economic goals for the next four years. Nevertheless, we decided to compare the following aspects of the programmes: VAT, para-fiscal levies, public sector reform, EU funds absorption and this year’s hot policy issue – the conversion of Swiss Franc loans into euro-pegged.

VAT. The SDP said they would decrease the VAT rate from 25% to 13% on a selection of agricultural and food products, including freshwater and saltwater fish. The HDZ stated they would reduce the general VAT rate from 25% to 23% in the first two years, with an additional cut to 20% by the end of the four-year term. Also, the HDZ promises to reduce the VAT on baby food and supplies to 5%, while “special treatment” to agricultural producers and tourist companies would be ensured during tourist season…

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