ZAGREB, April 26 (Hina) - Croatia's LEGSI stability index in April is 60, which is an improvement of one point in relation to the previous months, the Croatian Employers' Association reported.
ZAGREB, April 26 (Hina) - Croatia's LEGSI stability index in April
is 60, which is an improvement of one point in relation to the
previous months, the Croatian Employers' Association reported.
#L#
Analysts with the US consulting company Euroasia group and the
investment bank Lehman Brothers say that the increase in the
stability of the index was the result of decreased tensions in the
ruling coalition and improved security due to the reform of the
armed forces. These positive effects are estimated to have
prevailed over the negative effects of announced union protests and
the scandal at the Rijecka Banka.
The analysts claim that tensions in the ruling coalition have
lessened because public attention over the past month was focused
on quarrels in the strongest opposition party, the Croatian
Democratic Union (HDZ), ahead of a general convention.
The stability of the coalition in the coming period will continue to
face great challenges, the analysts say. Those include a Labour Day
union protest against changes to the labour legislation, the
continuation of talks on a new stand-by arrangement with the IMF,
and cooperation with the Hague war crimes tribunal. All these
challenges, the analysts claim, could threaten the stability of the
coalition and contribute to the unifying of its political
opponents.
With regard to the security situation, the analysts estimate that
progress has been made in relation to the previous period.
Croatia's rapprochement with the Membership Action Plan has been
contributing to the security situation, the analysts say,
welcoming the government's efforts to adjust the armed forces to
NATO standards and increase civilian control of the armed forces.
The Rijecka Banka scandal has caused the situation in the banking
sector to deteriorate. Apart from having an effect on the
enthusiasm of investors, the scandal has increased public
frustrations over the domination of foreign ownership in the
banking system. Despite the fact that around 90 percent of Croatian
banks are owned by foreigners, the case of Rijecka Banka proves that
foreign ownership does not guarantee their solvency and regular
business operation. The case, the analysts say, brings into
question the concept of privatisation of the banking sector,
implemented under the previous government.
Compared to other monitored countries, Croatia is placed sixth in
April according to the value of its LEGSI index. Hungary is placed
first and is followed by Mexico, Poland, Bulgaria, Brazil and
Croatia. Following Croatia are Russia, Thailand, Columbia, Turkey,
Indonesia, Azerbaijan, Venezuela and Argentina.
The LEGSI index is assessed by the US consulting firm Euroasia Group
in cooperation with Lehman Brothers investment bank. The index
measures the political stability of countries in transition and
other countries from all over the world, their potential, as well as
capacity to withstand political, economic, security, and social
shocks.
(hina) rml