HNB GOVERNOR: IMF BOARD OF DIRECTORS TO CONSIDER ARRANGEMENT WITH CROATIA MARCH 19

ZAGREB, Feb 19 (Hina) - The International Monetary Fund's board of directors will on March 19 consider a stand-by arrangement with Croatia and we expect them to accept it, there is nothing in it that the Croatian government or the Croatian National Bank (HNB) have not already committed themselves to, HNB Governor Zeljko Rohatinski said on Monday. The arrangement does not include any elements that could be interpreted as pressuring - rather it sets the framework of an economic policy which includes the reduction of the budgetary deficit and a wage policy which will be based on labour productivity, decreased internal economic imbalance and sustainable stability of the exchange rate and domestic prices, Rohatinski said at a press conference he attended along with Vice Premier Slavko Linic and Finance Minister Mato Crkvenac. The arrangement includes two sets of operative parameters, Rohatinski said, adding it envisaged nominal anchors (defined as the lowest level or limit), which will be the criteria for the implementation of the arrangement in the first six months. These criteria refer to the fiscal, monetary and wage policies, Rohatinski said. Although he could not speak about concrete figures, the HNB governor said the criteria referred to limiting the budgetary deficit, the state's indebtedness, the net crediting of public companies by the state and foreign debts. The other set of parameters refers to the already initiated structural reforms, the fiscal and monetary sectors, and public companies, he said. Deadlines have been set and part of the tasks should be completed by late March and some before the adoption of the arrangement. The tasks which have been completed include the establishment of the state treasury, and the payment of insured deposits in the savings banks that have gone bankrupt. A particularly sensitive area is the one related to the wages of employees in the public sector. The tasks to be completed by the end of the first quarter include the adoption of a new law on the HNB, changing the law on foreign currency transactions and setting the national clearing system in operation, Rohatinski said. Further measures include the privatisation of some commercial banks and the adoption of measures for improving the operation of banks and some state-owned companies. There is no alternative to these commitments and one must have the strength and perseverance to implement the policy from the Memorandum on the Economic and Fiscal Policy, Rohatinski said. (hina) rml