LEGSI INDEX FALLS BECAUSE OF GOVERNMENT COLLAPSE

ZAGREB, July 22 (Hina) - The LEGSI index on stability evaluated Croatia with 59 points, two points less in July compared to June because of the resignation of the Government and the insecurity in the prospect of a reconstructed government under Racan's administration to implement announced reforms. #L# This was the estimate given by a consulting group within Euroasia Group and Lehman Brothers and reported by the Croatian Association of Employers (HUP). Analysts noted that despite the moderate support in public to Racan's moves in reconstructing the Government, attempts to resolve relations in the ruling coalition and the future of the reshuffled government will influence the level of success in implementing announced reforms. It is estimated, for example, that Racan's announcement of the fight against unemployment and corruption and enforcing macro- economic stability are complicated tasks for very efficient governments and the implementation of such programmes requires a certain level of accord over complicated issues such as the labour law and reforms in the armed forces. The LEGSI index of stability is conducted by a US based consulting firm, Euroasia Group in co-operation with the Lehman Brothers investment bank which evaluate moves by governments, social events and movements in the economy and security. The index measures political stability in transition countries and the like all over the world or rather, their potential and resilience to internal crises. In comparison to other countries observed, Croatia fell by one place and now is rated seventh, behind Hungary, Mexico, Bulgaria, Poland, South Africa and Brazil. Tagging behind Croatia are Thailand, The Philippines, Russia, Venezuela, Ukraine, Columbia, Argentina, Turkey and some other countries. (hina) ms sp