PARLIAMENT ADOPTS LAW ON FOREIGN EXCHANGE OPERATIONS

ZAGREB, March 29 (Hina) - Parliament on Thursday unanimously adopted a law on the basics of the foreign exchange system and foreign exchange transactions, which represents the first of four stages in the liberalisation of the foreign exchange system. Under said law, in the future companies will be able to freely buy foreign exchange and put it on foreign exchange accounts. The law also provides for foreign exchange credit financing, which gives banks the possibility to invest surplus foreign exchange. It also enables a free foreign exchange, which will provide citizens and companies with protection from exchange risk, i.e. steep drops in the foreign currency exchange rate. The ultimate goal of the foreign exchange system liberalisation process is creating conditions necessary to introduce the euro in Croatia. Parliament also adopted a bill of amendments to a law on the financing of local and regional self-government, in first reading, whereby the financing of part of the health, education, and welfare sectors would be transferred from the state to the local level. To ensure local self-government units with means to finance new obligations, the state would give up 1.75 billion kuna (some $200 million). Plans also include raising some taxes, for instance on country houses, automobiles, and boats. Some new taxes should also be introduced, for instance on untended farmland, and unused business real estate. Towns and municipalities would be enabled to introduce rates on income tax. During today's debate, the introduction of new taxes elicited a lot of criticism. MPs expect that in the final draft of the bill, the government will accept some suggestions to protect citizens from excessive dues. (hina) ha sb