ZAGREB, Sept 12 (Hina) - The clubs of deputies in the Croatian parliament were divided on Friday in the assessment of the situation concerning the country's debt. Deputies from the ruling coalition admitted that the amount of the
state debt was worrying but not dangerous, while opposition MPs warned that the situation was disastrous.
ZAGREB, Sept 12 (Hina) - The clubs of deputies in the Croatian
parliament were divided on Friday in the assessment of the
situation concerning the country's debt. Deputies from the ruling
coalition admitted that the amount of the state debt was worrying
but not dangerous, while opposition MPs warned that the situation
was disastrous. #L#
Opposition parties strongly criticised the government's fiscal
policy, claiming that it stimulated import to the detriment of
export, diminishing chances of economic development.
The five ruling parties' clubs defended the government's policy,
claiming that the government had been forced to incur new debts in
order to stimulate national development. They also said that the
government's measures would yield results and advance economic
growth.
Ivo Sanader, president of the Croatian Democratic Union (HDZ), said
that the country's indebtedness was dramatic.
The leader of the strongest opposition party contested Finance
Minister Mato Crkvenac's statement that the government had
incurred more debts for the sake of economic development, claiming
that the lion's share of loans the country was granted abroad went
for capital investments, such as road construction, rather than for
development-oriented projects.
Sanader also opposed the statement that banks were the major
culprit for the enormous rise in the foreign debt.
Jadranko Mijalic of the Social Liberal Party (HSLS) described the
government's export-boosting measures as a pre-election move which
investors and businessmen did not trust.
Mijalic cautioned that the structure of Gross Domestic Product,
based on the citizens' spending and infrastructure investments,
could not service the debt in the long run.
Mate Granic, the Democratic Centre (DC) president, said that
according to all international criteria, Croatia was a highly
indebted country without a clear export strategy. The DC leader
cautioned that Croatia might soon suffer from the Argentinean
syndrome if the current fiscal and economic policy continued.
Djuro Njavro of the Croatian True Revival Club (HIP), agreed that
the country might go bankrupt in one or two years' time, if the
indebtedness continued to rise at the current rate.
Jozo Rados, the Libra leader, disagreed with the previous
participants in the discussion, saying that the country could deal
with the debt without any major problems. He added that taking loans
was the only possible option to facilitate the country's
development. Rados pointed the finger at the over-indebted banks
for causing the rise in the foreign debt.
Tonci Zuvela of the Social Democrats (SDP) said the total state debt
did not threaten the ongoing reforms and development-oriented
projects. He said that until 2000 the debt had been mainly used for
running expenses, and since then it had been invested in
development. There is no alternative to the continuation of road
construction, Zuvela added.
Luka Roic of the Croatian Peasant Party (HSS) believes that the
biggest problem is foreign trade deficit.
He attributed this problem to the Croatian economy's lack of
structural adjustment and imbalance between the manufacturing
sector and the service sector.
Roic is nevertheless optimistic and believes that the goals defined
by the current government, such as the encouragement of export,
guarantee that the foreign debt will be kept under control and used
for the development in the future as well.
Damir Kajin of the Istrian Democratic Assembly (IDS) warned that
the increased consumption, based on citizens' indebtedness rather
than on a rise in their salaries, was one of the reasons for the GDP
growth.
Kajin expressed concern over the figure showing that the capital
outflow made by foreign banks had reached 1.1 billion US dollars in
the first half of this year.
He maintains that the foreign debt of banks, private companies and
citizens is not the government's concern. What the government
should take care about is keeping the exchange rate of the national
currency stable, he added.
(hina) ms