LINIC, CRKVENAC COMMENT ON NEW STAND-BY ARRANGEMENT WITH IMF

ZAGREB, Dec 23 (Hina) - Foreign investors have assessed Croatia's latest stand-by arrangement with the International Monetary Fund as positive, stating that it is aimed at fiscal consolidation and maintaining the confidence of foreign investors and that the country's credit rating could soon improve. #L# This was stated by Vice-Premier Slavko Linic and Finance Minister Mato Crkvenac who spoke about the latest stand-by arrangement with the IMF in Zagreb on Monday. Linic says the arrangement confirms the government's policy in 2003 and that the government will be responsible in implementing its programme in the last year of its mandate. The incumbent government will not squander funds on buying votes and leave the new authorities with an insolvent state, which is what it encountered in 2000, Linic said. The talks with IMF experts focused on the reduction of the budgetary deficit and the state deficit to account for five percent of GDP, as well as on the need to stop taking new loans. The agreement with the IMF therefore does not differ significantly from the government's reforms, Linic said. Stabilising the share of debts in GDP is one of the main goals of the stand-by arrangement, Finance Minister Crkvenac said, adding that the share of debts in GDP in 2003 would be halved in relation to 2002. Commenting on objections that the government had taken too many loans and sold all state property, Crkvenac reiterated that the 22 billion kuna increase in the state debt over the past two years had been used primarily for economic recovery. The loans were used to cover state debts towards the economy, help the financial recovery of the shipbuilding industry, agriculture and agribusinesses, pay depositors their savings in banks which went bankrupt, regulate the health and pension systems etc., Crkvenac said. (hina) rml