HOT TOPICS IN MARCH: Karadžić gets life sentence; Croatia shipyards face bankruptcy; Gorenje’s record losses; Croatia’s back in investment categoryAdriatic Journal 29 March 2019
In 2016, Karadžić was found guilty on 10 counts including genocide in Srebrenica, persecution of Bosniaks and Croats throughout BiH, for the terror of the civilian population of Sarajevo during the siege of the city, for holding members of the United Nations peacekeeping force for hostages. At the time he was sentenced to 40 years in prison.
The appeals court upheld the guilty verdict, increasing his sentence to life in prison. Head judge Vagn Joensen said the judges at the original trial “underestimated the extreme gravity of Karadžić’s responsibility for the most grave crimes committed during the period of conflict, noted for their sheer scale and systematic cruelty.”
Serge Brammertz, the head prosecutor, said in a statement after the verdict:
“This United Nations tribunal has convicted him for his crimes and sentenced him to life imprisonment, sending an important message that justice can prevail over evil. Today, the victims of his crimes finally saw him answer for what he did. Opponents of the Tribunal will claim that this judgment is a verdict against the Serbian people. I reject that in the strongest terms. Karadžić’s guilt is his, not his community’s. Others will say that Karadžić is a hero and was defending his people. This trial has proven the opposite. Karadžić will be remembered by history as a war criminal responsible for horrific human suffering.
No end in sight for Uljanik’s troubles
The Croatian government has rejected the proposal for a restructuring plan for the troubled Uljanik and 3. Maj shipyards, that would cost EUR 1bn. The prime minister Andrej Plenković said the restructuring programme proposed by the shipyards’ strategic partner Brodosplit is economically unprofitable and unsustainable and hence its cost to the taxpayers cannot be justified.
Plenković emphasised that between 1992 and 2017 a total of around EUR 4.3bn was spent for the rehabilitation of the two shipyards and its state subsidies. He added the government continues to be open to finding a solution. However, its decision to reject Brodosplit’s proposal opens a possibility for bankruptcy of both shipyards.
The two shipyards have been in dire straits for months, recording huge losses which resulted in cancelled orders, blocked bank accounts and mounting debts to suppliers. Its workers have been staging strikes since the summer last years. The latest took place at the Uljanik dock in March demanding that the management and the government agree on a restructuring plan or get a loan to pay out their wages.
Gorenje reports record lossess
Gorenje Group, which was last year bought by the Chinese Hysen, generated EUR 111.4m in net losses in 2018. Sales revenues fell by 4% and last year amounted to EUR 1,186bn. The decline in revenue is partly due to the disposal of certain activities. Despite a decline in sales, operating costs, including material and labor costs, were higher than in 2017. In addition, the company had a further EUR 43m in other revenues, including impairments.
S&P puts Croatia back into investment category
Due to an improved situation in the budget and economic recovery, Standard & Poor’s (S&P) raised its sovereign credit ratings for Croatia to ‘BBB-/A-3’ from ‘BB+/B’. This puts the country’s rating back into the investment category after six years. In a statement, S&P said that “the upgrade reflects Croatia’s improving fiscal metrics, underpinned by its recent economic recovery thanks to tax-rich domestic demand, but also fiscal consolidation measures implemented by the authorities.
Risks to GDP performance, public finance, and financial stability emanating from the bankruptcy of Croatia’s largest food retailer Agrokor have abated. We also view the likelihood of fiscal slippages–from the payment of state guarantees against Uljanik shipyard’s debt liabilities–as reduced.” While tourism remains the biggest contributor to the GDP at almost 20%, other sectors such as manufacturing and transportation are also significant contributors. After 2.6% growth in 2016, S&P expects Croatia’s economy to grow to around 2.5% on average in 2019-2022.