DEBT WORRIES OPPOSITION, RULING PARTIES SAY NO NEED TO EXAGGERATE

ZAGREB, June 27 (Hina) - A report on the execution of the state budget in 2002 divided Croatia's parliamentary benches on Friday, with the opposition warning about the growing external debt and the ruling coalition claiming the debt situation need not be exaggerated. #L# The opposition sees the cause of external debt growth in citizens' increased spending without footing in the real increase of salaries. "This government will go down in history as the government which took Croatia into the overindebtedness zone," said Jadranko Mijalic of the Social Liberals, stating external debt accounted for 70 percent of Gross Domestic Product. "Owing to the increasing current account deficit, adverse foreign trade balance, and decreasing net direct foreign investments, the government will put citizens in front of huge difficulties when the external debet is repaid," said Mijalic. Tonci Zuvela of the ruling coalition's Social Democrats disagreed, saying that despite caution "there's no need to exggerate about the debt but supervise and repay it on time". Zuvela highlighted numerous positive macroeconomic indicators, saying they were the best since Croatia gained independence. He backed his claim by saying GDP had been continually growing for three years, inflation and interest rates were falling, and the financial and economic sectors were highly stable and liquid. Croatia has never rated better on the international market and investments, particularly capital ones, are record high, said Zuvela. Valter Drandic of the Istrian Democratic Assembly said the government and its budget were too centralised. Even though many authorities have been transferred onto local governments, the state budget is not tapped accordingly and there is no money, for example, for firemen just as the wildfire season is about to start, he said. (hina) ha sb