Opening the two-day event focusing on small enterprises on the threshold of the integration into a single European market, Minister Maras said that small and medium-size enterprises (SMEs) were a generator of the economy.

That's why it is necessary to create a favourable entrepreneurial climate with the government, social partners, local authorities and business people being engaged in that alliance for kick-starting the economy, Maras said.

Against a backdrop of negative indicators and bad news over the recent days, it is nice to hear that in the first half of this year the number of the start-up small businesses was higher by 300 than the number of the closed businesses for the first time in four years, he said.

He said that the Croatian entrepreneurship was not short of ideas, as evidenced by more than 10,000 applications sent for the stimulation programme "Entrepreneurial Impulse" of his ministry, however the problem lay with a shortage of capital given that only 20% of businesses met the criteria for borrowing from commercial banks.

Therefore, the government is willing to share the risk with entrepreneurs, for instance, through new lending programmes of the Croatian Bank for Reconstruction and Development (HBOR) and through the strengthening of the guarantee potential of the HAMAG, the Croatian Agency for SMEs.

President Ivo Josipovic said that Croatia's top priorities at the moment were job creation, the economic development and recovery from the crisis. In this context, the government must create conditions for entrepreneurs to make a success.

As for the Gross Domestic Product contraction of 1.3% in the first quarter 2012, Josipovic said that this was a result of long-standing trends in the economy and called for sparing no effort to revive the economy, including the relaxation, deregulation and speedier decision-making.

He also emphasised the importance of the activation of the country's own resources.

Deputy Prime Minister and Economy Minister Radimir Cacic said that the state should not shun its responsibility and it should take over risks in the economy.

Currently, only the prime minister and government ministers are the only one who are making decisions, and no one else is taking over the responsibility, which is awful, Cacic said, calling for changing this situation.

As for the GDP decline, Cacic said that media and economic pundits could be now desperate as their projections of the Q1 GDP decline of 3% proved to be false.

This government did not have a big influence on the results from the Q1 2012, Cacic said adding that he expected the further GDP contraction in Q2 by 2% and the stabilisation of the economy in Q3.

The effects of the government's policy and measures can be seen in Q4 2012, the Deputy PM said,

Some 500 participants including entrepreneurs, business people, government and local officials are taking part in the conference in the northernmost Croatian town.