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The Adpotion Effects of Electricity Sector on Croatian Economy

In times of recession, the revival of economy could be possible by encouraging investment and competitiveness of productive sectors, especially the electricity sector, which is one of the national priorities of Croatia. Croatia clearly sees its future within EU and thus becomes part of European energy policy. It is initially expected for EU electricity market to cause positive results on Croatian electricity sector like opening the market, influencing on competitiveness between firms, enhancing security of electrical supply, enabling the selection of suppliers and increasing efficiency and reducing costs. Croatia should follow the scenario of positive and negative effects of liberalization based on the experience of EU Member states in order to strengthen the competitiveness of the Croatian electricity sector. Furthermore, investment in electricity supply brings rapid recovery and brings economic growth. If Croatian economy wants to achieve mentioned scopes, it has to react promptly and efficiently. The aim of this research is to analyze current and future position of Croatia in the European electricity sector along with the circumstances. The methodology of this research is based on the application of SWOT analysis. Considering these results, the authors are predicting possible positive and negative adoption impacts of electricity sector on Croatian economy. The main results of the research indicate large and positive impacts of Croatian electricity sector adoption. It is obvious that negative effects exist but they are much weaker than mentioned positive results. Analysis is concluded with recommendations and proposals in order to reach a higher level of competitiveness. The main conclusion of this research is that there is a need to establish prerequisites and to define measures for better adjustment in the Croatian electricity sector. This would take the competitiveness of Croatian economy on much higher level. If Croatia focuses on positive effects and simultaneously invest efforts in reducing negative impacts of liberalization, it should definitely enhance its competitiveness and competitiveness of Croatian economy.

Electricity sector, liberalization of markets, competition, expected impacts, Croatian economy

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