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A combination of various sources of financing is a necessary prerequisite to finance any development as well as regional development. Sources of financing can be monitored and evaluated from the aspects of suitability (cost aspect), availability and abundance. Ultimate users of funds give advantage to financial sources whose availability and abundance is at the maximum level, and costs are at their minimum. For the most part, development bank funds meet the above mentioned requirements, since the main function of these banks is to finance certain activities under special (more favourable) conditions. The significance, justification and evaluation of this form of financial resources in the regional development segment are becoming more and more prominent. The subject of this paper is the amount and conditions of development bank loans in the area of Osijek-Baranja and Vukovar-Srijem Counties.

The term ‘corporate governance’ stands for a set of relations between management, large and small shareholders and other interest groups. A good corporate governance system is the basic postulate of sustainable economic growth, increase in economic system efficiency and a guarantee for easier access to sources of foreign capital. Ownership concentration is a significant internal mechanism of corporate governance because it greatly defines the relationship between owner and manager. There are two types of ownership concentration: highly dispersed ownership, that is, low ownership concentration, and very high ownership concentration. These concentration differences affect the corporate governance system itself, so there is a difference between a closed corporate governance system in the situation of high ownership concentration and an open corporate governance system where the situation is the reverse. The form of the system affects how the governing body is formed and structured, as well as how it operates and conducts its business policies. Within the financial system of Bosnia and Herzegovina, the banking system is dominant. An analysis of the corporate governance system has shown a relationship between ownership concentration and the form of the corporate governance system itself. 3e banking sector is predominantly owned by foreign companies and is characterized by a high ownership concentration. The fact that the corporate governance system is closed affects the election of members to the governing body and their work in enforcing business policies.

Unbalanced regional development is mayor obstacle to general advancement and prosperity of the European Union. Object of research is significance and role of financial sources as main factor that determine the development. The authors analyzes the financing models for polycentric balanced development through grant’s and donations.

The paper discusses the reasons for the low development level of Eastern Croatia, as well as possible ways of overcoming this situation. The revenues of local and regional self-government are frequently insufficient to finance development projects. Different characteristics of these fiscalities, such as permanent income and changes in managing this income can reduce the costs and result in more prudent and economical stewardship of local and regional authorities. This refers primarily to concentrating public resources in one commercial bank, which would establish a kind of partnership between the bank and the local community. The paper further examines the influence of ownership structure and bank's domicile on business policies of the banks operating in Eastern Croatia. The proposed changes together with new ways of financing, such as issuing securities, could generate new positive effects in financing regional development.

The author researches a singular monetary situation connected with the common issue of commemorative coin age by two states: Ireland, an EU member state that belongs to the Euro-system, and Croatia, an EU membership candidate. Although they belong to two different monetary systems, the two countries created a precedent by issuing a common commemorative coin on the grounds of ahistoric artistic design. This under­taking is affirmation of Croatian coinage, artistic and numismatic activities.

In the Republic of Croatia monetary sovereignty was established in several stages that reflected changes in and the growth of independent Croatian territory. The rebellion of part of the Croatian citizens of Serb nationality, the aggression of the then Yugoslavia and the occupation of some territories of the Republic of Croatia on which a para-state was proclaimed, the so-called Republic of Srpska Krajna, strongly impacted these activities. Thus Croatian monetary sovereignty was established in accordance with these circumstances. First temporary money was introduced on the territory under Croatian authority – the Croatian dinar (December 1991). When economic and monetary conditions were ripe the Croatian dinar was replaced by the permanent national monetary unit – the kuna, and its hundredth part – the lipa (May 1994). The kuna became the legal currency on the territory of the Republic of Croatia under Croatian authority, and after western Slavonia (May 1995) and northern Dalmatia, Lika, Kordun and Banija (August 1995) were liberated, also on these formerly occupied territories. The fourth stage in the establishment of Croatian monetary sovereignty was carried out in September 1997 in Eastern Slavonia, Baranja and Western Sirmium (Croatian Danubian region) as part of their peaceful reintegration into the Republic of Croatia with the help of the United Nations – the United Nations Transitional Authority in Eastern Slavonia, Baranja and Western Sirmuim (UNTAES), when the kuna was introduced as the legal currency in this region before the establishment of complete Croatian rule and the return home of the banished population of this territory.

Through a continuous reform of its fiscal system (especially the tax system), the Republic of Croatia has harmonized them with those of EU countries, in keeping with European integration processes and the intention to become a full EU member. Certain differences are still in place (tax rates, certain tax incentives, benefits and exemptions), but they are soon to be harmonized as well in an ongoing tax system reform. As for the monetary segment, Croatia is already relatively well harmonized with EU standards. This harmonization is primarily based on a stable exchange rate of the national currency and low inflation. The legislation is for the most part in line with the country's endeavours in this area. Certain segments of monetary finances, especially those with long-term effects such as capital transfers etc., which are not yet adequately regulated through positive legislation, will soon have to be harmonized with the EU acquis.

The paper discusses the phenomenon of modern convertibility in paper currency system. Unlike the period of metal (mint) value and traditional convertibility, convertibility today has different aspects and dimensions. Furthermore, it is regulated by the International Monetary Fund, but it depends also on the recognition in bilateral and multilateral relations between states. A proclamation of convertibility and tying this to the name of a national currency (Bosnia and Herzegovina) is another recent precedent.

Summary: On the example of the issue of contemporary coined and paper money, the author observes and proves the possibility to manage this monetary form and to achieve a number of effects such as the issuing profit, numismatic and notaphily benefits as well as promotional effects. By incorporating new approaches in the issuing of contemporary money in cash form proves that these approaches are apart of the financial science, especially the science about the money, and that the contemporary numismatics and notaphily are also its integral part. In this way, the issuing of the contemporary metal and paper money is treated as apart of the national economy.

Taking as an example recent Hungarian currency, it is concluded that the functions of coins and paper money are related to their daily use (trade and payment), but they can have some other dimensions and functions if proper solutions are found. In this way it is argued that these money forms have their future and raison d'être, thus they need to be further created and managed. Hungarian contemporary practice of money emission is given as a good example of various significant effects, primarily in the segment of non-fiscal revenues, based on innovation, artistic solutions and superb craftsmanship.

The Republic of Croatia is one of the transition countries that have abandoned planned economy and turned towards market-oriented economy. These new conditions of the market-oriented economy required normative adjustments in certain spheres of social and economic activity, resulting in the realization of new income in the budget structure, the likes of which were unknown in the economy of self-managing socialism. New sorts of budget income found themselves in the quantitative and qualitative function of satisfying public needs. In that respect, the authors of this paper explain the following: • The concept of concession, i.e., concession income in telecommunications ; • The concept of telecommunications ; • Normative regulations related to telecommunications in the Republic of Croatia ; • Normative prerequisites for the realization of concession income on the example of a radio station.

Since the fiscal burden of the citizens in the Republic of Croatia has reached its maximum, it is necessary to pay much more attention to non-fiscal financing of public requirements on the state level, as well as on the level of the units of local self-government. Significant non-fiscal income could be realized in the structure of the state budget and of the budgets of the units of local self-government, if the housing fund that used to be in public ownership and that is now the property of the Republic of Croatia were allowed for purchase. In addition to financial effects, this would also have legal effects, which are even more important, because these apartments and houses could now be bought even by those categories of citizens that were not in the position to that before. By continuing the process of privatization of the housing fund, the Republic of Croatia would prove to its citizens that it is a democratic and social state in which the power derives from the people and belongs to the people as the community of free and equal citizens. In this paper, the following methods were applied: analysis and synthesis, classification, comparative method, dialectical method, empirical method, and the case study method.

In the late 1980's and early 1990's, farmer socialist countries in Europe were exposed to democratic processes resulting in the dissolution of a number of complex states and the creation of new independent states, Unlike the USSR and Czechoslovakia, where the process of dissolution went peacefully, farmer Socialist Federal Republic of Yugoslavia fell apart after awar. The Republic of Croatia is one of the countries that emerged after the Socialist Federal Republic of Yugoslavia had fallen apart. After the homeland war and partial normalization of relations with the remaining part of ex-Yugoslaviat that continued existing as a new stote under the name oj Federal Republic of Yugoslaviaf Croatia and other newly formed states have started an International initiative far the apportionment of the formerly joint property. During the first half of last yearf first concrete and efficient steps mre taken in the acguisition of succession income. However, t other results regarding the receiving of other post-war income (income from restitutiom, contributions and reparations) were not achieved. In this paper, we shall more thoroughly discuss two most important forms ofpost-war non-fiscal income, far which alimentation in the Budget of the Republic of Croatia there are realistic foundations ; these are the post-war reparation and succession income.

The paper discusses the structural changes taking place in the financial system of the Republic of Croatia after the country became independent. Particular attention is given to the banking system, bankruptcies and rehabilitation of banks. Furthermore, the paper analyzes the development of insurance companies, investment funds and pension funds as important components of the financial system. The state and development of money and capital markets is analyzed as well. The legislation covering the major financial institutions is reviewed and compared with the legislation in highly developed market economies.

Financing of public needs on state and local government levels is impossible to ensure, among other things, without corresponding information system. It is actually the information system that is supposed to enable promptness and accuracy during the registering of all resources of the public revenue, as well as transparency of that information, and their sufficiency. The authors are analyzing and researching that on the example of one, though very specific, nonfiscal resource of the public revenue – capital properties selling revenue. Some forms of capital properties, which have had their base and character in the former legal and constitutional system, today exist under a different legal regime. Namely, Constitution of the Republic of Croatia1 no longer knows about the institute of public property, it guaranties the property rights, and defines the Republic of Croatia as a Welfare State.

Taking into account the global trends, the requirements posed to this system, as well as the growing openness of the Croatian market, the reform of the Croatian payment system has become a necessity. Some procedures adopted in the past are now an obstacle to these activities. One cannot speak of an efficient payment system in a situation when both deposit and non-deposit institutions are involved in the payment system. Since this means that there is a duality of regulations, the payment system is obviously overregulated. In addition, there is no usual competition in this segment, leading to reduced efficiency. Due to the changes in the EU payment system and around the world it is necessary to adapt the national payment system, but also to follow closely the ongoing changes in order to adapt to them more promptly in the future.

Coins are one of the oldest forms of money and today have been joined by other more modern forms of currency, but there are still reasons not only for their existence but also for them to be minted. Unrealized proposals for coins are a special segment of numismatics. The article presents the 1991 designs of academy sculptor Damir Matausic for modern Croatian coins.

The paper "Numismatic Aspects of Introducing the Uniform European Union Currency" deals with a subject causing a series of reactions for several years already not only in the European Union countries but also in those non-member ones. The planed intro¬duction of uniform currency, due to its complexity, reflections on everyday life of every individual, psychological barriers, habits, tradition, the features of current emission poli¬cies of the member states, technological reasons etc. results in such widespread public reac¬tions. In spite of that the reflection of these changes on the numismatic activity has been the least discussed issue. mth regard to the importance of recent numismatic activity the numis¬matic aspects of these changes were particularly emphasised in this paper. Indeed, only a very small number of numismatic elements have been worked out so far, i.e., fragmentary elaboration can be found in some Union states. On common level some currency proposals, being partly nltlllismatic, were elaborated to a smaller extent. In the event that the idea of introducting the uniform European Union monetary unit comes into existence, all the coun¬tries planning to be members of the Union will have to make, by all means, certain prepara¬tions and, along with this, undertake the necessary changes.

The paper delineates the properties and specificities of modern Croatian money-market transactions and their transition as well as the Solutions applied in this segment by the Republic of Croatia from the moment of declaration ofits in dependence up to nowadays. Such a contemporary monetary system has enabled the organization of a compatible and comparable public finances system, established via transition of tax and customs system of the Republic of Croatia. The focus of monetary authorities is being placed on the stability of national legal tender—the Kuna—, production quality, and on numismatic possibilities of its emission.

Practically, there is no human activity without being connected with some form of risk. A complexity of the activity is in a close connection with the risk level and, as a rule, the greater complexity leads to a greater risk. The importance of risk is stressed to a large extent in some sectors, such as financial institutions, especially banks. Risk is not a unique category. The most represented type of risk in credit is a credit risk. It is possible to divide factors of risk emergence and defining, their reduction and control, into following: organizational, cognitive, and technical. A time gap between decision-making and investment influences the size of a credit risk. The length of credit structure influences the risk. The cognition of debtor's debt servicing potential, methods of coverage credit risk and indicators of credit risk growth are prime movers in risk management. The optimization of risk has its positive effect on the total economic efficiency, prevents negative allocation of resources into marginal and unprofitable programs. At the same time, the credit risk size depends on total macroeconomic moves and institutional conditions. Internationalization of financial and credit courses, as a general tendency, especially influences countries in transition.

On the example of recent coin emissions the author explores the possibilities of managing this form of money and discusses economic effects of such activities.

Knjiga obrađuje načine i modele financiranja regionalnog razvoja putem zaklada i fundacija.

The subject matter of this paper are companies owned by local and regional self-government units from five counties (Pozega-Slavonia, Vukovar-Srijem, Osijek-Baranja, Brod-Posavina and Istria). The research was based on business operations data from individual reports drafted in audits conducted by the National Audit Office. An analysis has been performed and conclusions had been drawn about business operations, sources of financing and efficiency of operators in five counties. This paper confirms the assumption that companies owned by local and regional self-government units differ significantly according to the sources of financing and achieved business results. Businesses were analysed according to the number of employees, total revenues, grants, total expenditures and expenditures for employees in total achieved expenditures. Conclusions had been made regarding setting business objectives, measurement of business results and achieving planned purposes for which the companies were established and regarding the options for improving business results. This paper confirms the importance of accounting information system as a basis for information on business operations through an overview of revenues in accordance with prescribed regulations.

Photography of the digital age has lost the properties of a physically tangible product and has become intellectual property. Simultaneously with this process, the process of transition of photography into a mass-produced good has taken place. Market demands towards photography as a product of mass consumption often reduce the aesthetic and artistic standards that have been set by its development period in the process of photography coming to life as a medium. Despite the negative effects that accompany the transition of photography in its process of transformation into a mass-produced good, even such photographic “products” are able to encourage to a particular activity and ultimately generate revenue for numerous industries standing in the background of the “photography-product”. Production and distribution of stock photographs1 is one of the derivates of the digital age in which business in the domain of production of photographs is expanded to their distribution to users of websites and/or digital communication channels. In doing so, websites are at the same time used as distribution channels for photography as a creative product. Such symbiosis of photography – means of communication and network space – communication space – allows business association of these communication subjects and their new perspectives in the digital age. The Internet is becoming a bridge for photography, which allows it to cross into a new dimension, thus expanding its production and sales capacities. After the first 100 years of photography as a medium, its new forms of existence are just being unfolded. It is important to point out that stock photography has an important role in cultural and creative industry, which is currently in the phase of being formally defined in the Republic of Croatia.

The global crisis has created new challenges and new ways of solving them in different parts of the world. In the United States it has been characterized primarily by powerful actions and financial stimuli from the central bank, the Federal Reserve Bank, or the Fed, to stabilize the banking (fi nancial) system, and by further stimuli in the real sector. Within the EU the accent in the first period was placed on implementing structural reforms in individual countries and then on activities directed at significantly greater coordination and monitoring in achieving national goals of economic and development policy. In this context a new control and corrective mechanism (the EU Semester) has been created through which the European Commission analyses the fiscal and structural reform policies of every member state, provides recommendations, and monitors their implementation. Also, the presence, role and activities of the European Central Bank have been enhanced to create a mechanism to prevent possible future financial crises, but also one to provide the prerequisites for stimulating economic growth. As a full member of the EU since 1 July 2013, the Republic of Croatia is in a position for opening new opportunities but also to take on new responsibilities. The long, deep economic crisis can be resolved with the assistance of EU institutions and EU structural funds, but at the same time it demands a considerably greater degree of responsibility and effort by the executive authorities in achieving the necessary structural reforms. This work cites the causes of the economic crisis in Croatia and it then analyzes the possibility for overcoming it by a series of synchronized measures and actions: reforms that for one populist political reason or another were ignored for a long time, or postponed, contrary to the warnings from foreign and domestic professional institutions.

The increased level of knowledge in medicine, as in other sciences that are in some way associated with medical science, contributed to the change in quality standards in the health systems. Health systems, medical personnel and other employees in the health systems, especially during the last ten years have been faced with the demands of society and individuals (healthcare users), for an increased quality and elimination of the risk of adverse outcomes of individual procedures, diagnosis and treatment. Although quality in a medical intervention means applying the principles of best professional practice, more and more adverse outcomes of treatment have been recorded in the most technologically advanced countries. Conceptual models in healthcare began to develop in the early 1960s, with the works of Donabedian in the field of assessing the quality of healthcare, which in this model included elements of structure, process and outcomes (Donabedian, 2005). Following this model, there have been many efforts to analyze the individual components of healthcare. The US Institute of Medicine developed and defined healthcare as a framework to be used as a template for planning the reform of primary healthcare and as a basis for the development of instruments that are used in assessing the quality of healthcare. One of the basic human rights is the right to quality healthcare. The goal of each health system is to improve the quality of health, which also improves the quality of life. The quality of healthcare encompasses a set of measures taken during a health procedure, which results in a favourable outcome of treatment and also prevents unwanted events that may cause a negative treatment outcome. At the heart of the quality system is the patient, and therefore health institutions must provide conditions that guarantee their health and security. The aim of this paper is to present health systems that apply management models for the overall quality of the mechanisms built in the structure of governance at all levels to enable prediction of the results of the introduction of new policies aimed at maintaining and improving the quality of the healthcare system.

Doing business in a modern environment exposes small companies to numerous risks. Due to changes in economy, which are primarily dictated by the global crisis, companies must adapt to changeable market conditions to continue their business operations. Therefore, their market survival depends on the timely conduct of certain activities by the company management, resulting in operational savings and ensuring their competitive advantage. This requires changes in the business strategy as well as the market, organizational and financial structure of these companies. The paper will show an in- depth analysis of the market position taken up by small businesses using three practical examples, and indicating the pros and cons of restructuring which does not necessarily result in a desired effect.

The competitiveness of the Croatian export must be observed in the context of public and external debt of the Republic of Croatia. Increased government spending generates public debt on domestic and foreign markets. State debt on the domestic market limits the private sector’s access to capital. With high amounts of debt on foreign markets, the state affects the increase in the risk premium for Croatia at the national level, which increases the price of money and reduces the return on investment. This in turn significantly affects the export sector and limits the financial capacity for technological innovation. Exposure of the state to the debt in foreign currencies causes a restrictive exchange rate policy based on a fixed exchange rate. This prevents economic operators from using exchange rate policy as leverage. For an EU economy outside the euro zone, such as Croatian, this could play a key role in the battle for price competition on the EU market. Public debt has been growing fast since 1999, and rapidly since the crisis began in 2009. Borrowing is financing public spending not covered by revenue budget, which serves to maintain the current economic model based on state and para-state sector, existing from the expansion phase of the economy up until 2008, which relied on large infrastructure projects financed with public money. The decline in budget revenues during the crisis was tried to be replaced with higher tax burden, which resulted in a drop of competitiveness of the private sector and disturbances on the money markets. The high cost of government borrowing has resulted in high interest costs that, in the medium term, will amount to about 3 percent of GDP, which will adversely affect the competitiveness of the economy.

The period from 2007 until today has been characterized by two extreme events: a) an economic crisis of global extent and reach ; and b) rapid and powerful reactions by individual countries and regions of the world in response to those disturbances, keeping in mind the consequences of the dilatory reactions to the Great Depression of 1929-1933. In this context, and after a certain time, the EU began a series of systematic changes and coordination within its institutional framework and undertook concrete measures with the goal of correcting national economic policies, and at the same time it also established the coordination, supervision, and implementation of (non)binding recommendations for individual member countries. The measures were applied to public finance, to reducing deficits in national budgets at the level of the Maastricht criteria and to encouraging structural reforms, proportionately to each particular member state. Since 2010, the overall program of these coordinating activities and their regular monitoring has taken place within the framework of the European Semester. On the basis of its full membership in the EU (since 1 July 2013) the Republic of Croatia in 2014 has been completely included in the regulations and obligations that arise from that program: from procedures to reduce excessive deficits over the next three years (2014-2016) to a series of structural changes within a special national program in the framework of the European Semester. What to do to fulfill the formal conditions and criteria, and moreover to raise the performance level of the national economy not only within the EU but globally, is the fundamental question and challenge that the Republic of Croatia is facing in the new economic framework of the EU.

This research will look into competitive advantages of the Croatian wood industry. The paper provides an explanation of potential sources of competitive advantages as well as positive and negative aspects of the selected generic strategies, followed by examples of companies using these strategies. The subject of the research encompasses characteristics, the area and the impact of competitive advantages on the company’s market position and business success. The aim of the paper is to define the term competitive advantage and to bring it into correlation with the wood industry. The methods used in the research include description, compilation and classification, and use of comparative and genetic method to interpret the phenomenon in its origin, i.e. in this case, a competitive advantage in its source, namely in costs or differentiation.

Migration represents the movement of people from one place in the world to another. There are several types of migration: intercontinental, intracontinental and interregional. Today, one of the most signifi cant types of migration is rural to urban migration. The most important push and pull factors which may infl uence people in movements include environmental, political, economic and cultural factors. Culture is a complex system of behavior, traditions, beliefs, values and artifacts, which is transmitted through generations. It represents a group or community who shares common experiences. Cultural diversity involves the cultural diff erences that exist among people and the way communities organize themselves, their understanding of morality and religion. It is also called multiculturalism. With the accession to the European Union, Croatia faces an interesting set of migration challenges and opportunities. The increase of migration leads to a greater diversity of the population. As people move, their cultural characteristics and ideas spread along with them, creating and changing cultural diversity. Area of consideration will be substantiated by survey results, conducted at the College of Slavonski Brod, direction Management. Analysis of the results will show understanding the given terms in relation to students of professional study and students of specialist graduate professional study. The survey aims to answer the question what is the attitude of students towards the existence and preservation of cultural diversity in Croatia because culture is the productive strength of society.

The intention of this paper is to analyze a set of factors that determine the challenges of the Croatian export sector during the past two decades and provide suggestions and recommendations for the design of tailored and consistent national policies in various segments, especially the industrial, research and development and technology policy, they rely on the totality of Croatian economic relations with foreign countries with the most significant part being exports. Along with the policies necessary to strengthen the administrative capacity of the system of economic diplomacy, the agency for the promotion of exports and CCE. A key prerequisite for the internationalization of the Croatian economy is comprehensively designed to promote and encourage the further development of Croatian innovation, technology and export - oriented enterprises and their networking into clusters and other internationally competitive organizational forms.

Public revenues are funds (money) which states meet public needs in their ju-risdiction. Th e development of public revenue is related to the development of the state, a form of public- private planning and economic development.Th is article discusses the types of public revenues, and analyzes the impact of the legislation on Fiscalization traffi c cash reserves on the amount of value added tax. Furthermore, the paper carried analyzes for the fi rst nine months of three years of calculated value added tax on the Croatian territory. Th e analyses include the in-troduction of new rates of value added tax from 1 January, 2013. Also, the changes in the Law on Personal Income Tax are analysed, and its impact on the Ordinance of fl at taxation of self-employed and the impact of this on the level of reserves in the value added tax.

Th e Night of the Museums (originally Long Night of Museums), an event held in the Republic of Croatia since 2005, is continuously setting up new records – the number of cities and museums involved in the project records the continuous increase, along with the rising number of visitors to the museums, heritage and cultural institutions in the few hours of the event. In 2013 the Night of the Museums project involved 226 museums, galleries and cultural institutions. According to the Museum Documentation Center’s Registry of museums, galleries and collections in the Republic of Croatia, there are 281 museums at the state’s territory. It is obvious that there is a tendency for the inclusion of all Croatian museum institutions in the Night of the Museums project. Th e event is an excellent promotion of museum activities and also the promotion of the project itself. Th e question remains how much individual museums themselves can highlight the quality of their programs in this mass event. Also, a continuous increase in the number of visitors to the Night of the Museums does not necessarily create a new museum audience. Th is paper provides an overview of the success of the Night of the Museums project, and seeks to identify the extent to which these events contributed to the development of the recognition of museums themselves, but also the creation of a new museum audience.

Over the past few decades, in according with modern global economic trends as preferences of modern turistic spenders, there has been a raising interest in rural turism detected in the world, as it's emeregent forms. However, overviewing the current situation in Croatian tourist market, rural tourism is on a low development branch regardless to the existing, rich resource basis of Croatian rural area as the fact that rural area occupies 91, 6% of total territory. By that, it definetly needs to point out that there is territory fragmentation present and that the turist development of continetal region is in big and even enormus development fall behind in regards to the Adriatic region. For example, according to some statistic evaluations and mesurements in Continental region of Croatia there has been achieved only 5% overnight stays of the total number. The main reason of the current condition in the tourist sector of Croatia in domain of rural tourism is the previous focus of national tourist politics exclusively on development and promotion of the tourist product Sun, Sea and Sand. Building on the presented, there is absence of common cooperation culture among small economic subjects, in this case with other tourist shares, which are geographically concentrated, and have potential effects in the segment of rural tourism. Therefor the primary goal of this work is to identify and show basic, development determinants in forming interest grouping, that is, cluster. Besides, focus of the research work will be contained in the display, as in analysis reason of un recognizing cluster as a tool for more successfull and efficient bussiness between rural tourist stakeholders. In order of getting relevant information and cognition, there will be a empirical research on holders of rural tourism offers in selected units of local (regional) government, that is, continental region counties of Croatia.

Programs ECHO and OBNOVA were first assistance programs which the European Union pursued in the Republic of Croatia in the period since 1991 to 2000. These programs have greatly helped in the return of refugees, reconstruction of war-torn areas, humanitarian action, and freedom of speech. Assistance program CARDS and pre-accession programs PHARE, ISPA, SAPARD have been active since 2000 to 2007, when they are replaced by a single IPA program. The main aim and purpose of the IPA program is providing assistance to candidate countries and potential candidate countries in the harmonization and implementation of legal, political and economic acquis communautaire and to prepare them for the use of the Cohesion Fund and the structural Funds. This paper analyses the competence of project managers, barriers to application and implementation of the projects (the inability to pre-finance and co- financing, the complexity of application procedures, the adequacy of human resources, language barriers, and lack of defined strategic priorities, not preparation of project documentation, lack of motivated managers and project team members). Research results will help organizational units in the Republic of Croatia to more effectively use the resources of the Structural instruments with the aim of further regional development.

Along with the entire economy, the wood industry in the Republic of Croatia also has to face strong and numerous competitors, both in the home and foreign markets. Solutions for survival and future development should be sought in market competition. Modern marketing increasingly uses branding as the means to in- crease sales and profi t. Advertising as a part of the branding process is an unavoid- able step toward creating a strong brand. To optimise the decision making process when selecting an appropriate media combination for advertising, in the paper linear programming is used, particularly a special case of linear programming – integer linear programming. One possibility is to use the technique for distribution of a fi xed or limited budget across various media – radio or TV commercials, newspaper adverts, direct mail, etc. Th e other possibility is to use advertising space (and type of advertising) based on the greatest possible number of potential users that can be reached by the advertising message.

The role of fi nancial managers and financial management in making investment decisions is increasing. The role of finance is incorporated into all business processes and financial decision in the long term affects the total businesses enterprise. This paper investigates and analyzes the way in which small enterprises that manufacture furniture in Croatia prepare themselves for financial decision-making and how they prepare themselves for financing investment projects. An empirical research was conducted among small enterprises that manufacture furniture in Croatia on the extent of their use of financial pre-accession funds of the European Union and preparations for project funding from the Structural and Cohesion Funds of the European Union. In this context, the contribution of financial resources from these funds on the market competitiveness is described.

Based on the reported turnover of catering industry taxpayers in the past periods a very low turnover has been noticed. There arises a question of unrealistically reported income which is incongruent with the income scale of the taxpayers. Accordingly, Ministry of Finance suspects that there is an area of underground economy and therefore suggests the Fiscalization Act in order to try to suppress it. In our paper we will show the stated results of turnover records after the obligation of reporting the records through the fiscal register office and compare them with the stated turnovers before the Fiscalization Act came into effect in the same period. The turnovers will be compared based on the average turnover per employee. We will provide an outline of two groups of taxpayers; small entrepreneurs and craftsmen, and large taxpayers, who have been obliged by the Fiscalization Act since 1st January 2013, and we will establish how much the Fiscalization Act has contributed to the state budget.

Entrepreneurship activities are crucial for regional development. Croatian legislative supports regional development almost fifteen years. Acts from the late 90s are directed to separated, economically stagnated regions (areas special state concern, hill and mountain areas, islands etc.). Acts are still lawfully and still encourage entrepreneurship activity through the tax exemptions. Regional development Act and subordinate acts from 2009, defined regions with developmental disabilities, so called assisted areas. Their status is determined by development degree. Development degree is connected indirectly with entrepreneurship activity progress. Earlier regulated and economically weaker areas differ territorially with regard to assisted areas. Considering the above, authors of this paper will analyze entrepreneurship activity indicators (entrepreneurship number, number of employees and financial results). Indicators will be compared for two groups of areas: 1. Areas special state concern (1st, 2nd and 3rd group) and hill and mountain area 2. Assisted areas at local self-government level Research results should indicate on correlation between areas development degree and entrepreneurship success. The paper will provide the overview of entrepreneur activity indicators for areas which are not include in Croatian system of incentive measures and it will never be.

Small and medium enterprises have a growing role and infl uence on the increase of production, and therefore on greater economic growth. By the Law of fi scalization enterprises which receive cash money for their products and services shall embed systems for fi scalization. According to Law of fi scalization in circulation of cash, fi scalization represents a set of measures implemented by the tax payers, in order to enable eff ective monitoring of realized turnover in cash. Although, the Law provides system components for the implementation of fi scalization such as unique account identifi er, elements of accounts, protective code of the issuer, etc., it leaves enough space to upgrade the system to provide services and assistance to small and medium sized enterprises. Systems that are off ered on the market, represent an additional workload on enterprises as an economic as well as technological. Th e authors explore the possibility of a new model of a system based on Cloud Computing, SaaS model. Th e model in this manner, hardware and software infrastructure is provided as a service. Accordingly, companies will not have the need for a large initial investment in ICT infrastructure, and later maintenance requirements. Service would be paid by the model pay as you go. Also, the paper will present a comparative analysis of the system for implementation of fi scalization based on technological and cost components. JEL Classifi cation: D24, E42

Financing business activities of any company requires the availability of adequate sources of funding in the required amount and in a timely manner. The structure of the funding sources or capital structure, which finances business assets, is one of the main factors, which determines the competitive position of the company on the market and influences growth opportunities and expanding abilities of the business. In today’s complex business conditions, characterized by globalization processes and dynamic socioeconomic relations that prevail in the market, there are a significant number of funding sources that are available to businesses in accordance with their requirements. Those funding sources are different in terms of types, maturities, interest rates, and other contractual terms. Strong competition and market conditions demand a continuous restructuring of the company’s capital structure as well as finding the most appropriate fi nancial mix between owned and borrowed funds of a certain maturity. Available data show that besides the usualexternal sources of funding, such as diff erent types of bank and commercial loans, the companies increasingly are using alternative funding sources such as leasing. The concept of leasing implies a financing of business activities through lease rather than purchase of the necessary business assets. A lease is an agreement in which one party (lessee) gains a long-term rental agreement for the use of some fixed asset, and the other party (lessor) provides that asset and receives a series of periodic contractual payments in return from the lessee. Th e leasing is particularly important for small and medium business enterprises that very often do not have sufficient financial resources to purchase the necessary assets nor can they get bank loans at favourable terms. There are numerous advantages of the leasing compared to other asset financing methods such as simplified management and planning of current and future cash flows, better costs control, flexibility and ease of contracting, tax treatment (benefits) and many others. Therefore, the paper provides an overview of the basic characteristics and types of leasing as an alternative way for financing businesses and indicates the signifi cance and role of leasing for business activities in modern market conditions. Additionally, the paper presents structure and basic features of the leasing market and leasing companies in Croatia.

Croatia is at the very end of its pre-accession process of joining the European Union, during which many institutions and entities had the opportunity to apply and obtain the pre-accession funds. Th e aim of these funds was to reduce regional disparities between Member States and candidate countries, to strengthen the public institutions with a focus on integration into the system of the European Union and to prepare them for the use of the Structural and Cohesion Fund after accession. Tourist Boards in collaboration with local government units, legally defined as carriers of tourism development for specifi carea were also one of the entities who had the opportunity as a project applicants and / or partners in the project to become the beneficiaries of pre-accession funds. This research shows that during the pre-accession period 2007-2013 there were not so many of such projects. Small number of projects that were fi nanced from pre-accession funds is the result of the shortcomings of the administrative and organizational functioning modes of tourist boards in the Republic of Croatia. With creation of additional cooperation between larger number of local government units who have the same or similar tourism characteristics on their territory, between tourist boards and development agencies active in this fi eld as well as between other entities in tourism, situation could be changed signifi cantly. Then it comes to merging into “clusters”, which show the great opportunity of devel opment with regard to their current funding by the relevant ministries and the European Union in the future. This paper will review the legal options for the development of possible models, and show in a concrete example of Vukovar-Srijem County that theoretical model can fi nd its application in practice in one undeveloped tourist area.

The last few decades have been marked by important political changes, extraordinary scientific and technological improvements, positive growth of global sales, development of international companies and supranational institutions. However, the uncertainty and instability on all levels of business activity are increasingly threatening the world economic growth. European Union, as well as the whole world economy, is nowadays in a phase of deep structural changes at the crossroads between the former dominant mass production and the new production model based on scientific- technological, information and communication activities, infrastructure and services. There is a “new economic scene” emerging on the horizon, where uniqueness, innovativeness, creativity and productivity play the key roles. As the response to these kinds of global changes, the aim of the European Union was to become the most competitive and most dynamic economy of the world to the year 2010 according to the guidelines of the document known as “Lisbon strategy”. European Union is a community of countries different in their size, culture and economic strength ; hence it was essential to strengthen the national programs in order to increase the total economic strength of the European Union – for the aim of the Lisbon strategy has not been accomplished yet. The current financial, and thereby general economic crisis, have just slowed down the progress of the European Union towards the Lisbon aims. European Union industrial policy has been directed towards the strengthening of the market economy effect by steering of all capital to the segment of „new industry“ against deindustrialization. The new concept of EU economy development, according to the challenges of the Lisbon strategy, should be based on the so called “informational and innovational society”, as well as the society based on knowledge, in which it could try to face the new challenges of its economic role on a global economic scene by using innovation policy, policy of encouragement of small and medium entrepreneurship development, and the policy of research and development stimulation. The aim of this paper is to analyze the state of the industry and the current industrial policy of the European Union in accordance with the guidelines set by the Lisbon strategy. In order to accomplish that, there is a need to explore those industrial branches which could be the generator of the future economic growth, as well as all possible institutional solutions (creation of triple helix model), and which will have a supporting role.

The current major economic crisis, the deepest economic disturbance since the Great Depression of 1929-1933, with a powerful financial upheaval in the capital markets in the United States. In 2008, it quickly expanded into the other parts of the world, especially in Europe and the Far East, and became a global phenomenon. Moreover, it is no longer a financial crisis, but a crisis in the real economic sector. In this context, the Republic of Croatia has been relatively successful in bridging the first phase (the financial crisis, 2008). The depth of the economic upheaval has been felt in the real sector (2009-2010), especially in the negative rates of economic growth and a drastic decline in employment, in particular in the construction sector, in the food processing industry, and to some extent in commerce. The goal and purpose of this work is to point to new, qualitative possibilities and solutions for stimulating economic growth by encouraging investment in essential areas: energy efficiency, transportation and complex infrastructure, agriculture and irrigation, and the tourist industry. The designated new and complex solutions provide the opportunity and a real basis for a national economy to enter again into the zone of positive growth rates and to engage financial capital for investment on three bases: national potential, the structural funds of the European Union, and the business interests and capital of private investors.

Local and regional governments in Croatia are organized in the forms of cities, municipalities and counties. Each local unit has a legally prescribed responsibilities and scope of work. At the moment, there are 576 local and regional government units in Croatia, of which 20 are counties, City of Zagreb has a dual status as a city and a county, 126 are cities and 429 are municipalities. In order to fulfill their tasks, local governments must have sufficient budget revenues at their disposal. Partly because of a large number of local governments and inefficient territorial division, there is a problem of low fiscal capacity of many local units that are unable to fund all the public needs on the local level. Especially difficult for local governments to finance are investments in long-term capital (development) projects. According to present legal regulation, local governments acquire budget revenues such as tax and non-tax revenues, grants and capital revenues. Beside these, local units can borrow financial funds from banks and other financial institution and/or issue debt securities on the market. This paper examines the role of debt securities, namely municipal bonds issued by the local governments in the Croatia in order to acquire sufficient financial funds for financing long term capital projects on the local level. The main legal regulation in Croatia and basic criteria and constrains on local government borrowing and municipal bond issuing will be analyzed. Additionally, the relative contribution of borrowed funds and municipal bonds in the overall budget structure will be discussed along with possibilities and challenges for their increase in the future. The paper will present an overview of municipal bonds and their characteristics issued by local governments in the period to present date. A proper model of financing capital investments on the local level is of great importance for development of local communities. Therefore, local governments must find new ways to acquire additional financial funds to finance large capital projects, such as infrastructure, schools, hospitals, roads and similar. Issuing of municipal bonds by some local governments is certainly one of the models that should be utilized in the future more often. This paper attempts to indicate main advantages of municipal bonds as a source of revenues of local government budgets, as well as to point out possibilities for further developments in the field.

In terms of its effects so far the global economic crisis is stronger and deeper than the economic disturbances at the time of the Great Depression. Additionally, it takes place under the conditions of a much higher level of connection and complexity of interrelations compared to the events in the period from 1929 to 1933. It started as a segmented phenomenon in two aspects: in one country – the USA and in one sector – financial industry. However, in less than a year it became global in terms of territorial coverage and universal in terms of its effects, which means that it entered the area of real economy. It has had a significant impact on the decrease of growth and employment rate and the decrease of production and exports. However, even though this open crisis has become an evidently global phenomenon, it is also clear that, with all the discussions on the future global configuration of control and early detection of signals of economic disturbances, today and now every state is seeking, identifying and taking specific measures in the sphere of its national economic policy. This task lies ahead of the Republic of Croatia under the conditions that include an additional challenge: structural imbalances which, for various social and economic reasons, have been transferred from one term to the next term of office of the next legislative and executive branch of power, ever since mid-90s of the last century.

Cultural tourism is becoming the leading trend in the world tourism. Ever growing number of travellers put all of their free time and available resources in visiting and exploring of cultural sights. Sites of rich history and preserved tradition take precedence over usual summer arrangements. Active vacation is popular as well as travels that include visits to sights and adoption of cultural patterns of local culture. This ever increasing tourist area and the overall global trend can be also observed in Croatia. The Strategy for development of cultural tourism, which has been in use for several years, recognizes the present issues and shortcomings, and it gives recommendations for their solution. Being a town of rich historical and cultural tradition, Osijek also needs to find its model for development of cultural and tourism potentials.

Organization sets itself specific objectives in order to meet the better business success, and to gain comparative advantage over the competition. For these objectives to be achieved, of crucial importance is organizational communication per se which implies communication among employees, as well as communication between different hierarchic levels in the same organization. Communication as an element of organizational behaviour is seen through the group level as the independent variable. Throughout this paper we shall explain the importance of communication for organization, the communicational process and channels for information flow through the network of small formal groups and the network of informal groups. Hereby we also want to emphasize the greater need for appreciation of communication as the important factor of organizational behaviour due to the growing changes in organizations which face the leadership with new challenges and opportunities for testing the different organizational behaviour concept modes. We will also demonstrate the extent of satisfaction with communication within the observed economic operators in Osijek-Baranja County, and evaluate the impact of communication on the employee level on business performance of the same.

Various sources dealing with demographic trends such (e.g. UN Population Division, WHO, ILO) point out that population across the world is getting older. By the 2050 there will be more than 20% of world population age 65 and over. This negative demographic transition, i.e. population aging has been showing four very distinctive features: unprecedented, pervasiveness, endurance and profound implications on human life in general. Statistics for the European Union are supporting the above mentioned. Namely, the age structure of the European population is expected to change significantly over the next decades and by 2060, the share of people aged 65 and above will increase from 18% to 30% compared to now, while the share of people aged above 80 will more than double. Thus, it is not surprising that the European Union has launched a notion of “Silver Economy” related to economic activities of population aged 50 and over and their impact on various sectors of the national economy. Elderly persons have been for a long time considered the fiscal burden, but EU countries have recently started to turn the negative demographic trend of aging into market opportunities for new products, services, jobs and consequently growth. The purpose of this paper is to discuss the issue of silver economy with particular focus on investigating the potential economic value of active aging and elderly people in general. Supporting the silver economy in theory and practice means considering elderly population as an opportunity not a threat to local, regional and national economic development.