ZAGREB, May 31 (Hina) - Democratic Centre (DC) leader Mate Granic said on Saturday Croatia was facing "the Argentinean syndrome and a crisis" due to a major increase in the external debt. Responsibility for this rests with the
government as well as the central bank, which has been warning about the problem but failed to take concrete measures, he said.
ZAGREB, May 31 (Hina) - Democratic Centre (DC) leader Mate Granic
said on Saturday Croatia was facing "the Argentinean syndrome and a
crisis" due to a major increase in the external debt.
Responsibility for this rests with the government as well as the
central bank, which has been warning about the problem but failed to
take concrete measures, he said. #L#
It is high time to curb the growth of the foreign debt, otherwise the
country will find itself in a crisis next year, Granic said at a news
conference.
The DC urges the parliament to discuss the uncontrollable increase
of the foreign debt, and the government to inform the public and
parliament about the IMF's latest letter of intent and ways the
cabinet intends to encourage development and export, and decrease
the foreign deficit.
The party also calls for refraining from seeking new loans, except
for those used to finance development and approved by parliament,
as well as for introducing measures to prevent banks and companies
from seeking loans abroad.
According to some estimates, Croatia's foreign debt at the end of
the year will exceed US$20 billion, Granic said.
He urged the government again to set the date of parliamentary
elections which he believes is the only way to prevent new debts.
Granic said the head of the IMF Mission to Croatia expected the
government to send the IMF director a new letter of intent by August
1, and warned about the rise of the foreign debt from 58 to 68% of GDP
and the rise of the balance of payments deficit to 6.9%.
This year's foreign trade deficit is expected to exceed $7 billion
and given that next year Croatia will have to pay a record
instalment of $2.9 billion, the planned GDP growth of 4.2% will not
be enough for the payment of the capital sum and interest, which
will force the state to seek a new loan, Granic said.
(hina) rml