On 27 July 2026, the European Commission published a proposal for a Council Implementing Decision amending Croatia's recovery and resilience plan (RRP), following Croatia's reasoned request of 9 July 2026 due to objective circumstances. The proposal, COM(2026)420, recommends approving 34 measure changes, including the removal of a co-financing scheme for alternative fuel vehicles and the addition of a new measure for an AI gigafactory, while keeping the overall financial envelope unchanged at EUR 5.79 billion in grants and reducing loan support from EUR 4.25 billion to EUR 4.17 billion.
The proposal is the latest adjustment to Croatia's RRP, which was originally approved by the Council on 28 July 2021. The changes reflect objective circumstances such as lack of demand, high inflation, and construction sector bottlenecks. The removed measure, C7.1 I2 (co-financing for alternative fuel vehicles), was deemed no longer achievable due to insufficient market interest. Three measures are partially amended: hydrogen use (C7.1 R1-I1) also due to lack of demand, port modernisation (C1.4 R3-I1) due to high inflation, and primary school construction (C3.1 R1-I4) due to construction sector bottlenecks. Two measures receive baseline adjustments: justice efficiency (C2.5 R1) and social benefits transparency (C4.3.R1). Thirty-two measures are simplified to reduce administrative burden while maintaining their original objectives, covering areas such as digitalisation, energy, health, and transport. The freed-up resources are redirected to one new measure (C2.3 R3-I18 – AI Gigafactory) and increased implementation of two existing measures: adult education vouchers (C4.1 R3-I1) and elderly care centres (C4.3 R3-I4). Additionally, 20 clerical errors are corrected across 15 milestones/targets and 5 measures under 7 components, including water management, digital transition, and education.
The proposal maintains the Commission's positive assessment of Croatia's RRP, with the financial contribution unchanged. The Council is expected to adopt the implementing decision following the Commission's proposal. The adjustments aim to ensure the plan remains relevant and achievable under changed economic and market conditions, while preserving its overall reform and investment objectives. The shift from alternative fuel vehicle subsidies to AI infrastructure reflects a strategic reallocation towards digital innovation, though it may disappoint stakeholders in the clean transport sector who had expected continued support. The simplification of 32 measures is likely to ease administrative burdens for national authorities and implementing bodies, but could raise concerns among oversight institutions about maintaining accountability and transparency. The reduction in loan support by approximately EUR 79 million may affect Croatia's fiscal flexibility, while the unchanged grant envelope provides stability for other priority investments. The addition of the AI Gigafactory aligns with EU digital priorities, potentially boosting Croatia's competitiveness in high-tech sectors, but the removal of alternative fuel vehicle incentives may slow the adoption of zero-emission transport in the country.