CEB and Croatia sign €200 million loan agreement to mitigate COVID-19 impact on essential services

17 July 2020

PARIS - The Council of Europe Development Bank (CEB) and Croatia’s Ministry of Finance have signed a €200 million loan agreement to support the Government and local authorities in their efforts to contain the COVID-19 pandemic and mitigate its negative impact on essential public services.

Croatia has adopted several public health and economic measures to protect the population and diminish the impact of COVID-19. For instance, in addition to ensuring much-needed medical supplies and equipment, tax and health insurance payments for entrepreneurs have been deferred and the Croatian Health Insurance Fund and local governments have been provided with interest-free loans to compensate for the deferral of tax and insurance payments.[1]

The CEB will ensure the financing needed to carry out such measures. It will cover up to 90% of the costs associated with the purchase of COVID-19-related pharmaceutical products, medical supplies, and protective equipment as well as with the employment of exceptional and temporary medical staff. The CEB financing may also be used to compensate for the revenue losses registered by the Health Insurance Fund and local authorities. The Health Insurance Fund will thus have the resources required to pay medical providers for their services while local authorities will be able to continue providing essential public services.  

The Governor of the CEB, Rolf Wenzel, said: “We are pleased to support Croatia in its efforts to contain the COVID-19 pandemic and ensure that vital public services stay operational. These efforts are key to ensuring the country’s inclusive and sustainable recovery.”

Deputy Prime Minister and Minister of Finance of Croatia, Zdravko Marić, added: “Maintaining high standards of health care for our citizens remains a priority for the Government. In these challenging times, we are encouraged by the support of our international partners – one of them being the Council of Europe Development Bank, which provided more than €1 billion for the implementation of highly social projects over the last 23 years.”

Croatia joined the CEB in June 1997.  To date, the Bank has approved more than €1 billion in financing to support key investments in health, urban and rural infrastructure, flood prevention measures, and micro, small and medium-sized enterprises (MSMEs). In addition, Croatia benefits from and is a partner to the CEB-managed Regional Housing Programme. More details are available here.

[1] OECD (June 2020), The Covid-19 Crisis in Croatia.

Set up in 1956, the CEB (Council of Europe Development Bank) has 42 member states. Twenty-two Central, Eastern and South Eastern European countries, forming the Bank's target countries, are listed among the member states. As a major instrument of the policy of solidarity in Europe, the Bank finances social projects by making available resources raised in conditions reflecting the quality of its rating (AA+ with Fitch Ratings, outlook positive, AAA with Standard & Poor's, outlook stable and Aa1 with Moody's, outlook stable). It thus grants loans to its member states, and to financial institutions and local authorities in its member states for the financing of projects in the social sector, in accordance with its Articles of Agreement.

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