He was speaking at a reception he gave for state officials, business people, officers, judicial officials, and representatives of political parties, trade unions and religious communities at his office on the occasion of the Christmas and New Year holidays.
Mesic said the past year had been characterised by numerous events related to Croatia's accelerated democratic development, highlighting the intensifying of the EU accession negotiations and the recent NATO summit in Riga, after which he said Croatia was considerably closer to membership of the alliance.
The president said, however, that he shared the opinion of the majority of the population who are dissatisfied with the functioning of certain government institutions, both on the local and state levels, which he added undermined confidence in political parties and state institutions.
"If the system we have favours the accumulation and aggravation of problems rather than their resolution, if it is expensive, subject to corruption and favours those who are incompetent rather than those who are expert, then it is clear that it has to be changed," he said, adding that he was dissatisfied with the results of numerous reforms as well.
Recalling that 2007 would be an election year, he called on all political parties to base their campaigns on quality platforms and see to general and state interests.
Mesic pointed to the need of accelerating economic growth, saying that a seven or eight per cent growth rate was both realistic and feasible. He added, however, that economic growth had a moral and human dimension as well and that poverty must not be tolerated.
"The Croatian worker must not feel hurt and humiliated in his own state, that he is poor and robbed, that he is denied his constitutional and human rights to work and social security of both himself and his family," Mesic said, advocating a broad social consensus on the necessity of political, economic and social reforms.
Also today, Prime Minister Ivo Sanader gave a Christmas reception for editors-in-chief and journalists reporting on the government's work, saying the most important economic events of 2006 were the growth of exports, the reduced unemployment, the sale of oil company INA's shares, and the payment of the first and second instalments of the debt the government owes pensioners.
The number of the jobless has dropped to 280,000 for the first time, Sanader said, also highlighting the interest of both the public and institutional investors in INA's shares.