PM SAYS BOTH GOVERNMENT AND HUP WANT TO RELIEVE ECONOMY

ZAGREB, Jan 21(Hina) - It is a joint position of the government and the Croatian Employers' Association (HUP) that tax benefits should be introduced for entrepreneurs and that administrative obstacles to their business should be removed, Prime Minister Ivo Sanader said on Wednesday after talks with the HUP.leadership.#L# Sanader said he had asked for and received the HUP's support for the implementation of one of the first measures to reduce tax pressure - the reduction of the VAT rate from 22 to 20 percent, which should go into force on January 1, 2005. The prime minister said today's talks also focused on the struggle against the grey economy and added that the two sides demonstrated interest in improving the work of public administration. Sanader said he informed the HUP leadership of a new approach of his cabinet to social partnership. He said that the new approach was visible in the merging of the economy and labour ministries into one ministry, to facilitate the solution of economic and social issues. The prime minister announced the establishment of an economic policy council which would include one representative from the HUP and trade unions each. Stressing the government's strong support for the social partnership, Sanader said he would attend the first session of the Economic and Social Council scheduled for Friday. The head of the HUP's Executive Committee, Ivica Mudrinic, expressed satisfaction with today's talks. He praised "the government's quick response and readiness for a debate on development issues". He stressed that the HUP expected cooperation with the government in preparing Croatia's economy for the country's admission into the EU. Mudrinic also said that the side had agreed in principle that the price of labour should be reduced. (Hina) it sb