More than 68 percent of Croatian businesses have more than 21 billion kuna (€2.8 billion) worth of projects or investment plans ready to be implemented in the 'next financial period', the Croatian Employers' Association (HUP) said on Tuesday, state agency Hina reported.

HUP held a news conference to present the results of a survey on the enterprise sector’s investment potential and needs in the context of EU funds.

The survey, covering more than 1,700 micro, small, medium and large businesses, shows that entrepreneurs have a big investment potential and are ready to implement specific projects aimed at business modernisation, digital transformation, research and development, and innovation, HUP said.

It also shows that more than two-thirds or 68% of the respondents have prepared projects or investment plans in the amount of more than 21 billion kuna for the ‘next financial period.’

However, it also shows that more than 50 percent of total EU funds should be disbursed as grants for recovery and resilience and for raising the competitiveness of the private sector.

As many as 28% of the respondents said that without grants, they would not survive the recession, 30% said they would not invest without sufficient grants, 94% said they were willing to use grants, while only 6% expressed interest in financial instruments.

HUP director-general Damir Zorić said that it was necessary to increase the share of funds intended for the enterprise sector.

“The ratio of private and public sector investments must be at least 50:50,” he said, noting that currently the ratio was 25:75 in favour of the public sector.

Zorić went on to say that EU documents made it possible to increase the share of funding for private investments in the national recovery and resilience plan and that HUP expected that percentage to be at least 50%.

He pointed to the EC’s recommendations regarding the programming of measures in the national recovery and resilience plan to address the necessary reforms in order to boost competitiveness and investment.

This primarily refers to the need to improve labour productivity, strengthen the integration of digital technologies by companies and greater investments in research and development as well as increasing the flexibility of the business environment, he said.

The head of HUP’s ICT Division, Boris Drilo, said that investments in the private sector were crucial for economic recovery.

Such investments lead to sustainable employment with high-value jobs, which will boost overall GDP growth. Excessive investment in the public sector is detrimental to private investments and sustainable economic development, Drilo said.

The head of the HUP Association of Professionals for EU Funds, Ana Fresl, said that 54% of the respondents believe that most important are investments in capacity building, production modernisation and new technologies, followed by investments in digital transformation and introduction of ICT, chosen by 35% of the respondents.

(€1 = 7.56 kuna)