This means a possibility and an obligation to participate in numerous initiatives and activities arising from the need for enhancing the complementarities and coordination of these two organizations, particularly in the area of practical cooperation in missions and operations and cooperation in the development of Defense Capabilities. FINANCIAL FRAMEWORK Due to the economic crisis, the Defense Sector has been faced with a reduced Defense Budget, and with the imperative to adapt to financing under the conditions of fiscal rationalization and savings. Emanating from the macroeconomic reality that is currently not capable of producing reliable medium and long-term forecasts of GDP dynamics, this Document is based on the assumption that for the next three years the Defense Budget will remain at the level of Fiscal Year 2014, i.e., the total Defense Budget will be 4.3 billion HRK, and this will, in a real sense, put an end to its year-long continuous decrease. With the recovery of the economy and the GDP growth, and in accordance with the European Union procedures related to the excessive deficit, the conditions for a gradual increase in the Defense Budget will be met, that is, the prerequisites for a gradual accomplishment of the long-term ambition to increase the Defense spending by 2 percent of the country’s GDP. Long-term planning in the Defense Sector under the conditions of uncertain economic movements and continuous budget restructuring has been accompanied by a series of challenges and risks which require intensive short-term management and fast adaptations. T H E C R O AT I A N A R M E D F O R C E S L O N G − T E R M D E V E L O P M E N T P L A N 2 0 1 5 − 2 0 2 4

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