German giant buys majority of Croatian company. Šušnjar: Discretion is my middle name
Minister of Economy Ante Šušnjar commented today on the interest of German defense giant Rheinmetall in Croatia, the rise in energy prices and possible government interventions, and responded to criticism regarding wage policy and inflation. He announced that Rheinmetall, after taking over the company DOK-ING, might be interested in other Croatian companies, writes Net.hr.
German giant doesn't stop at DOK-ING
Commenting on the announcements by Rheinmetall's CEO about thousands of new jobs and significant revenue growth, Šušnjar expressed confidence that such plans are achievable. "This is a global company that is very stable with a large investment cycle. I am glad that the Republic of Croatia and our entrepreneurs, especially companies like the recently Croatian DOK-ING, are recognized in that world," the minister said. He emphasized that DOK-ING has built its own innovation system over the years and developed products whose importance is growing.
"They were a niche in the industry, which is an opportunity for our companies and the economy of the Republic of Croatia to assert themselves on a global scale. They were the leading company for demining, they developed autonomous unmanned vehicles for various purposes, from firefighting to anti-terrorist actions for military application. However, that niche industry is becoming mainstream when we see today's trends in the world, including warfare trends," he explained. Šušnjar expects that cooperation with the German manufacturer will not stop at DOK-ING.
Purchase of Croatian company
"I think Rheinmetall will not stop at DOK-ING in Croatia. We had several meetings. They expressed interest in some other Croatian companies that could be included," he revealed, but did not want to provide more details. "These are sensitive procedures. As a public official, I would not disclose business secrets. Especially as a lawyer who was one for 20 years. Discretion is my middle name, so I cannot talk about these things," he said. According to him, Germany recognized in Croatia the quality of products and skilled personnel, as well as logistical advantages such as access to the sea and highways.
Asked whether citizens will pay more for fuel from Tuesday due to the new rise in oil prices following the escalation of the conflict in the Middle East, Šušnjar confirmed that the government is monitoring the situation. "Unfortunately, there has been another escalation of the conflict in the Middle East. Prices on the exchange are rising today, but we are monitoring them all the time. We intervene as needed," he said.
On fuel prices
He confirmed that the current practice will not change, regardless of the tourist season. "We always intervene. Until now, there have been tourist seasons and we intervened. We are here to find an optimal, balanced approach that will satisfy the needs of the budget, but also the needs of our population and economy," the minister said. He added that he does not expect a significant price increase despite the current trends. "These are all exchange-traded commodities. Today, for example, diesel is rising about 12 percent, Brent about seven percent, but we look at the fifteen-day average. We will see what the calculations and prices will be, but we do not expect a drastic jump," he explained.
Asked whether the government will intervene if gas increases by eight percent in the fall, the minister said the final decision will depend on circumstances. "In all these energy-related issues, we must primarily take care of security of supply and that energy is available," he said, noting that Croatia, unlike some neighboring countries, did not have supply problems during previous energy crises.
Fight against inflation
Speaking about possible measures, he noted that before the latest escalation in the Middle East, the government was gradually exiting subsidies, but returned as needed. "Before this crisis, we had a process of gradually exiting subsidy measures, but you saw that we returned. By the fall, we will make calculations and above all the interest of citizens and the economy will be our priority. The fight against inflation as well," he said.
Claims that the cumulative effect of inflation for most families reaches even 45 percent were not accepted by the minister without a detailed explanation. "I would like to see that expert explanation of those experts and what mathematics that is, how they calculate it," he said. He explained that when assessing the real impact of inflation, income growth must also be taken into account. "There are macroeconomics professors who have explained in great detail that when we look at cumulative inflation growth, we must also look at the growth of disposable income. Only then can we see what the real pressure on citizens is," he said.
Wage growth
He also rejected the claims of the Croatian Employers' Association that inflation is caused by a 63 percent increase in public sector wages in three years. "That is one example of selective presentation of statistical data," he said, citing analyses that demystify this. He emphasized that the private sector started increasing wages much earlier than the public sector to retain workers. "The private sector started raising wages much earlier and following trends in retaining workers, and public administration somewhat later," he said. He considered the comparison of wage growth inappropriate.
"I cannot correlate couriers and their wages with the wages of public sector employees, for example, doctors. Doctors are highly qualified and have significantly higher wages than couriers. Taking such statistics in that way is selectively adding pears, apples, and plums," he graphically explained. He concluded that wage growth must be observed over a longer period and that then it is seen that total growth in the public and private sectors differs only in decimals. "One must take a much wider period, from 2020 or 2021. The total volume of wage growth in the public and private sectors differs not by one percentage point, but only by a decimal of a percentage point," Šušnjar concluded.
