The research of this topic considers and analyses action of European institutions and implementation of public policies of the European Union, through the strategies of the European Union to determine the impact on economic development of the Republic of Croatia. In other words, this paper will try to show the connection between the work of European institutions and the creation of European Union policies when influencing the economy of the Republic of Croatia. Some of the most important European institutions were analyzed, such as: European Parliament, Council of the European Union, European Commission, European Council and Court of the European Union. The aim of this paper is an attempt to present the impact of the work of European institutions through the process of creation policies on the Republic of Croatia by observing strategic plans and programs that contribute to economic development of the Republic of Croatia. Data collected for writing this paper is collected from books, scientific papers and official websites and they are properly explained and supported by examples though the paper. In order to better present the topic, scientific methods were used in the paper such as description method, analysis method, complication method, comparison method and statistical method, and their use will be more explained later in paper. This scientific and professional research sought to analyze and explain functions of European institutions, the process of creating European Union policies and their mutual impact on the Croatian economy.