PM MINISTER SPEAKS ABOUT EFFECTS OF HIS CABINET'S FIRST TWO YEARS

ZAGREB, Feb 6 (Hina) - Speaking about the effects of his cabinet's two-year mandate and future tasks, Prime Minister Ivica Racan said on Wednesday he believed blood and tears were behind us, and sweat, work and more work ahead. Addressing students and teachers at the Zagreb Grammar School, Racan mentioned among the government's positive achievements an increased Gross Domestic Product, a halted negative economic growth, a real increase in salaries and pensions, and a low inflation rate, as well as economic and political stability. In the past two years the government had to return a ten billion kuna (EUR1.32 billion) debt owed by the state and state-owned companies, the PM said, adding his cabinet had also initiated a series of reforms, including those of the health and pension sectors, and reduced the duration of military service, with further reforms in this field to ensue. Racan understands the dissatisfaction with the government's effects but points out that deep changes and reforms cannot be achieved overnight. As for what has not been done in the past two years, the PM conceded the government lost the battle against unemployment despite preconditions to win it. However, he described the "radical decrease" of the accelerated rise of unemployment as encouraging. If the growth recorded two- three years ago had continued, the unemployment figure today would have been 600,000 and the number of retired persons exceeded 250,000, Racan said, adding he expected the growth of employment would catch up with the rise of unemployment this year. Racan also pointed to a certain paradox, the fact that a poor structure of almost 400,000 unemployed resulted in Croatia's importing labour for shipbuilding and having to ensure some 40,000 workers for house-and road building by summer. In this respect, the PM announced the educational reform would have to focus on profiling education more adequately to the needs of society. The PM explained the cancellation of child's allowances to students with a higher number of scholarships. Although most student questions referred to employment and vocational training, they also mentioned politics. Racan reiterated the government had tried to settle all open issues with Slovenia in one move but that other factors in Croatia were only interested in border issues, which stalled progress. The PM conceded he had made a mistake in being overtly optimistic. The students also asked why the government passed decisions only to quickly withdraw them, as in the case of a ban on the transit of hazardous matter through Croatia, Racan said the national interest was to curb crime, reminding that "road crime" had cost Croatia around EUR87.5 million. As for the students' criticism that MPs received excessively high salaries, the PM said they were among the lowest in Europe. Asked why the government submitted to the Hague war crimes tribunal documentation on gen. Ante Gotovina, an Hague indictee, without giving it to his defence as well, Racan said the Croatian general was on the run which prevented the government from providing his attorneys with the documentation and that the trial had not begun yet. (hina) ha