MANY LOWER HOUSE DEPUTIES SEEK SKREB'S RESIGNATION

ZAGREB, April 18 (Hina) - During Tuesday's debate on Croatian National Bank (HNB) reports for 1998 and the first half of 1999, a number of deputies at the Croatian National Sabor's House of Representatives called on HNB Governor Marko Skreb to resign. "The very fact that as many as 25 financial institutions collapsed during his mandate is reason enough for changes in the HNB leadership," Damir Kajin of the Istrian Democratic Assembly (IDS) said. The HNB Governor blames former bank managements and supervisory boards for the collapse of banks, refusing to accept his share of responsibility for some 45 billion kuna (about US$5.5 billion) which Croatia spent for resolving bank crises, Kajin said. The central bank should have reacted when Miroslav Kutle and other tycoons were buying shares of the Istarska Bank and other banks and drawing huge loans, instead of only stating in the end that banks are facing problems because they granted loans to the so-called tied companies, Kajin said. The Governor now says that the situation in the banking system is better than before, but we will be facing another crisis due to huge illiquidity, if the state does not resolve that problem as soon as possible. However, for this to happen, changes at all levels are necessary, from the banks to the HNB, Kajin said. The Social Democratic Party (SDP) bench also believes that the reports of the central bank cannot be accepted. The HNB failed to recognise on time that economy was heading toward recession and did nothing to prevent it. Quite the contrary, by making wrong moves, it caused the drawing of savings deposits from the banks, which caused damage not only to the banks but also to economy, said Dubravka Horvat. One can only conclude that the central bank failed to carry out its duty and give satisfying results. According to the Constitution and the Law on the HNB, the central bank is responsible, among else, for the general liquidity of payment and since there is huge illiquidity in the economy, HNB's reputation and credibility are seriously threatened, said Jadranka Katarincic-Skrlj on behalf of the Croatian Social-Liberal Party (HSLS). Anto Kovacevic of the Croatian Party of Rights/Croatian Christian Democratic Union (HSP/HKDU) believes Skreb's report does not reflect the real state of affairs. "It addresses the maintaining of stability, while banks, burdened with irrecoverable debts, are collapsing cyclically, the economy is in a crisis, exports are falling, the unemployment rate exceeds 21 percent. A turnaround is necessary, and that's why Skreb should be replaced," Kovacevic said. The Croatian Peasants' Party (HSS) believes the central bank is responsible to a great extent for the banking and economic crisis, and therefore expects Skreb to resign, said HSS's Zvonimir Sabati. Milder in assessing the operation of the central bank was Ivan Suker of the Croatian Democratic Union (HDZ) bench, who pointed to the difficult circumstances the HNB had operated under in the past years and the huge problems Croatia had inherited from the previous system. Individual debates are expected to take place in the afternoon part of the session. (hina) jn rml