Explaining its decision, the government said that the slowing of economic activity as a result of the implementation of the measures to contain the spread of the coronavirus pandemic would lead to a strong decline in public revenue, and considerable additional resources would be needed to implement the measures aimed at curbing the epidemic and helping the economy. All this would result in a large increase in the budget deficit and public debt.
In order to make most of the limited fiscal potential, the government restricted the use of funds provided for in this year's budget and in financial plans for 2020 for extrabudgetary entities, including the Croatian Pension Insurance Fund, the Croatian Employment Service, the Croatian Health Insurance Fund, the Hrvatske Vode water management company, the Environmental Protection and Energy Efficiency Fund, the State Agency for Deposit Insurance and Bank Resolution, the Restructuring and Sale Centre, the HZ Infrastruktura rail company, the motorway operators Autocesta Rijeka-Zagreb and Hrvatske Autoceste, and the HZ Putnicki Prijevoz rail company.
Budgetary and extrabudgetary beneficiaries of the state budget may assume obligations and execute expenditure only if they are indispensable for conducing their core business and functions.
At the same time, any hiring on fixed-term or open-ended contracts is banned regardless of sources of funding. Exceptionally, hiring is possible only for medical services and subject to prior approval from the Minister of Finance.
Any calls for public procurement tenders are suspended, except for ongoing ones and those intended to help the economy overcome the consequences of the coronavirus outbreak and to repair the damage caused by the March 22 earthquake that struck Zagreb and its environs.
The government also decided that any donations in excess of HRK 10,000 (€1,315) may be made only with prior approval from the Minister of Finance.