ZAGREB, April 30 (Hina) - More than half of Croatia's 9.58 billion kuna (US$1.12 billion) of old debt will be paid by June, the Finance Ministry reported earlier this week. Of the said amount, 3.6 billion kuna (US$419 million) will be
paid from the state budget, and the rest with securities like health and tax bonds. This will call for the release of new government bonds, and a development of Croatia's as yet considerably underdeveloped capital market, Finance Minister Mato Crkvenac said, adding that in the emission of securities for old debts, attention had been paid to prevent their extent and footholds from jeopardising stability. In the future, the government will rely on securities much more than in the past, the minister said, adding he believed Croatian companies too should hit the market with their own securities instead of relying only on standard bank loans. Announcem
ZAGREB, April 30 (Hina) - More than half of Croatia's 9.58 billion
kuna (US$1.12 billion) of old debt will be paid by June, the Finance
Ministry reported earlier this week. Of the said amount, 3.6
billion kuna (US$419 million) will be paid from the state budget,
and the rest with securities like health and tax bonds.
This will call for the release of new government bonds, and a
development of Croatia's as yet considerably underdeveloped
capital market, Finance Minister Mato Crkvenac said, adding that in
the emission of securities for old debts, attention had been paid to
prevent their extent and footholds from jeopardising stability.
In the future, the government will rely on securities much more than
in the past, the minister said, adding he believed Croatian
companies too should hit the market with their own securities
instead of relying only on standard bank loans.
Announcements on the issuance of tax bonds has met with significant
public interest. According to a government debt settlement
programme, these should be issued in June, in the amount of 1.586
billion kuna ((US$184 million).
Tax bonds would be Finance Ministry securities circulating in the
economy with the aim to eliminate mutual debts and claims until they
end with those with a tax liability to the state. The Finance
Ministry says tax bonds will not result in tax evasion, because they
will be dealt with very carefully and with strict control.
The amassed debts in the health sector will also be settled through
securities, namely bonds. A bank consortium with Zagrebacka Banka,
Croatia's strongest bank, at the helm, will purchase 1.7 billion
kuna (US$198 million) worth of bonds over the next two months. In
the meantime, 400 million kuna (US$46.51 million) of the loan would
provide a financial bypass until bond payments begin.
According to Deputy Finance Minister Damir Kustrak, 1.3 billion
kuna (US$152 million) of debts paid with state budget funds has
already been paid, of which 372 million kuna (US$43.26 million) in
cash. Old debts paid thus far include last year's debts for social
care, part of the debts of government's Office for Displaced
Persons and Refugees, part of subsidy obligations, and farm price
support.
The government intends to settle part of the debt with bills of
exchange in the total amount of 1.6 billion kuna (US$186 million).
Four hundred million kuna (US$46.51 million) would be issued on May
2, with expiration in May and June, and the remaining 1.2 billion
kuna (US$140 million) in the last quarter of the year.
Another measure for settling debts is the clearance of tax
liabilities with claims companies have with ministries. About 300
million kuna (US$34.9 million) has been cleared this way, while 1.3
billion kuna (US$151 million) should be settled over the next two
months.
The government intends to separately settle 2.4 billion kuna
(US$280 million) of debt on the basis of insured savings in failed
banks, of which 420 million kuna (US$46.75 million) will be paid
from the state budget, while a special arrangement is being drafted
for the rest.
(hina) ha