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Financial Participation

Workers’ financial participation has a long tradition in the former Yugoslavia. In Croatia today, however, the incidence of financial participation schemes is below average. By European comparison Croatia is in the lower third with regard to both employee share ownership and profit-sharing schemes.

In the wake of the break-up of the former Yugoslavia the up until then common practice of workers’ participation in the form of cooperatives increasingly fell out of favour in Croatia. During the first phase of privatisation from 1991 to 1995 workers were encouraged to buy up to 50% of the shares in the company they worked for at a discount and with the option of paying by instalments. In 1995 small shareholders held around 20% of the shares of companies that had been privatised in the first phase. In the course of further privatisation phases at the end of the 1990s and the early 2000s the possibility to buy company shares at a discount was restricted and the proportion of workers with shares in the company they worked for fell.

In 2006 there was a political debate on whether promotion of employee share ownership schemes should be included in the new privatisation law 2007.1 This proposal was ultimately dropped, however. The privatisation process in Croatia has now largely been concluded. One consequence of the lack of political support for workers’ financial participation schemes is that, according to both the fifth European Working Conditions Survey (EWCS 2010) and the European Company Survey the incidence of employee share ownership and profit-sharing schemes in Croatia is below average by European comparison. One reason for the lack of political support for workers’ financial participation schemes could be the distrust of the Croatian people and politicians with regard to ideas similar to socialist self-administration systems.2

Wilke, Maack and Partner (2014) Country reports on Financial Participation in Europe. Prepared for www.worker-participation.eu. Reports first published in 2007 and fully updated in 2014.