Investment Incentives in the Negotiate Process toward Croatia’s Joining into EU

Abstract

The policy towards foreign direct investments in the EU countries is an integral part of their macroeconomic policy, with clearly defined development priorities, and the floats of the direct investments. These counties successfully implemented foreign direct investments into their long-term development policy. Beside the multilateral, regional and bilateral relations, unilateral policies and measures of every EU country have a major influence on the foreign direct investments. Although EU, with its common policies wants to equal the conditions for the investments, the investment incentives of individual EU countries are a very important factor in the decision where to invest. These unilateral measures for encouraging the investments are a hot negotiation topic for EU and member states, in order to equal the terms of the investment in the entire EU territory.The investment incentives used by Croatia are insufficient to attract bigger and more important investors in order to achieve the economic impact, that Croatia wants to achieve through these investments. The amount of foreign direct investments in Croatia is small and concentrated on a very small number of subjects. There are very few new investments. Because of the very strict monetary policy and strong national currency, the incentives present almost the only mechanism for encouraging the investments. This is the reason why during the accession negotiations, Croatia must leave open enough possibilities for increasing the variety and amount of the investment incentives. If not, Croatia will be left behind its’ competitors, which will result in very negative economical and social consequences.