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Experts caution against possible devaluation of the kuna

ZAGREB, Dec 1 (Hina) - The devaluation of the kuna would result in a number of negative effects that would exceed positive effects due to the structure of the Croatian economy. In addition, it would produce harmful social effects, heard a round table discussion organised by the Matica Hrvatska Croatian Cultural and Publishing Society in Zagreb on Wednesday.

Ljubo Jurcic, a professor at the Zagreb Faculty of Economics, said that a series of other measures should be carried out before the possible devaluation of the national currency.

He said that drafting an appropriate industrial policy would be most important in order to define who would produce, what kind of products should be produced, and for which markets.

Jurcic said that after that, regional and fiscal policies should be tailored before modelling the monetary policy.

According to an analysis conducted by Zvonimir Ratkovski and Milan Deskar-Skrbic, undergraduates at the Faculty of Economics, devaluation does not have long-term positive effects, and Croatia should not devalue its currency because of the introduction of the euro in the coming period.

Sociologist Darko Polsek said that devaluation would increase the gap between the rich and the poor as the rich have at their disposal means for the speculative conversion of the kuna into other currencies.

"Devaluation brings about social inequality and leads to material disintegration," Polsek said.

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