Croatia is pushing to deepen cooperation between stock markets in Central and Eastern Europe (CEE), aiming to strengthen liquidity, attract investors and ultimately move the region from frontier to emerging market status, Deputy Prime Minister and Finance Minister Marko Primorac told a panel hosted by the European Bank for Reconstruction and Development (EBRD) in London on May 13. 

Primorac said Croatia was working with other countries form the region to align their capital markets. This follows the signing of a memorandum of understanding (MoU) between seven regional bourses in Bratislava in 2024, as announced by the Zagreb Stock Exchange in November 2024. 

“Our capital markets have been sleeping for a decade now,” Primorac told the EBRD panel. “After the financial crisis, scepticism increased and we lost a number of small retail investors. We asked ourselves, how can we bring people back?”

Within Croatia, the government has helped to boost supply on the local exchange by issuing retail government bonds and treasury bills. 

In addition Croatia, with EBRD support, has developed a strategic framework for capital markets development. “It’s based on several pillars: increasing liquidity, offering new instruments, improving market infrastructure, exploring regional integration, and raising the level of corporate governance in Croatia,” he said.

A key component of that strategy is regional integration. “I’m proud that we are doing our best, successfully so far, to bring together stock exchanges from the CEE area,” he said. “We’re working on signing an MoU to bring our markets closer together and to present, potentially, our markets as a single market.”

The stock exchanges that signed the Bratislava MoU include those from Bratislava, Budapest, Bucharest, Bulgaria, Ljubljana, Warsaw and Zagreb.

Primorac said steps being considered include developing a common regional stock index and harmonising key infrastructure, including central depositories. “The ambition is to move from a frontier market to emerging market classification, and we know we can do that together much faster than alone,” he said.

A presentation on the joint initiative is scheduled for May 14, with participating countries expected to discuss further steps.

Primorac emphasised the importance of political backing. “We all understand how important political support is for this process,” he said. “We will be fully committed to working on regional market integration with those countries.”

While the European Union continues to explore a broader capital markets union, Primorac said CEE countries cannot afford to wait. “Once the conditions are met at the EU level, we will be ready to step up as a region and join whatever decisions are made,” he said. “But until then, we will try to step out as a region.”