PLITVICE LAKES MEETING PLITVICE LAKES, Aug 27 (Hina) - Finance Minister Mato Crkvenac on Sunday described a four-day working meeting at Plitvice Lakes as very sucessful.
PLITVICE LAKES, Aug 27 (Hina) - Finance Minister Mato Crkvenac on
Sunday described a four-day working meeting at Plitvice Lakes as
very sucessful.#L#
The meeting, which ended today, gathered Government officials,
parliamentarians, President Stjepan Mesic's chief advisor on
economic issues, Croatian National Bank and Chamber of Commerce
representatives, unionists and employers who discussed
projections of budgets for 2001-2003, framework strategies for the
economic progress, changes in the fiscal and monetary policies and
starting points for a social pact.
Participants considered the whole package of measures which should
discontinue negative trends in Croatia, Minister Crkvenac told a
news conference at the end of this event.
On the other hand, it has been proved that the well-argumented
dialogue of all key social and political partners has no
alternative, the minister added.
Crkvenac stressed that the basic aims of the strategy of the
economic development was speedier employment. The next year should
see an increase in employment but the situation when somebody works
but does not receive a salary on regular basis should be also
prevented in the future, he said.
Pre-conditions for the creation of more jobs are to enhance the
production and export, Crkvenac explained adding that the finance
ministry has forecast that the number of employed persons should
rise by 30,000 next year (or by 2 percent).
The Gross Domestic Product (GDP) should increase by three to four
percent in coming two years, but it is expected to climb by five
percent after that. Salaries would rise slower in comparison to
productivity so that saving and investment can be stimulated,
Crkvenac said.
Some view this as a too cautious and insufficiently expansive
projection but I believe that we should project what is really
feasible, he told reporters.
The purpose of the strategy is to achieve social stability and
European features in the economy and society, i.e. the preparation
of conditions for Croatia's accession into the European Union, he
said.
In this context Crkvenac announced a more restrictive fiscal policy
emphasising that it is necessary to cut the public expenditure and
have a smaller tax burden on the shoulders of citizens and
companies. Thus we can open up space for a monetary policy which
should lead to a drop in interest rates and speedier development of
the financial market as well as the adequate policy in the exchange
rates.
The Finance Minister said he agreed with all who held that kuna was
overvalued but he stressed that depreciation was out of question.
For him, such a move would produce some results but would not bring
any long-term solutions to economic problems.
He also advocated the expeditious privatisation and restructuring
in the economy.
The minister added that companies that were not competitive on the
market should file for bankruptcy, whereas the promising firms
would be supported by the Government.
The promising firms should also find strategic partners. Croatia
wants the partnership with the world and the arrival of foreign
capital and "what we seek is partnership rather than help", the
Croatian minister said.
It is necessary to curtail the public spending in order to stabilise
the economy. Therefore, a part of the budget referring to outlays
should be frozen at the level of 50 billion kuna (over 6 billion US
dollars) in the coming three years. The budgetary means earmarked
for education, science, public health and social issues, would
rise, however, he explained.
Salaries paid from the budget would be restricted but their rise
would be possible if the number of civil servants fell, he added.
These measures, along with the social agreement and changes in the
tax policy, should substantially determine the future of Croatia.
In the first six months since its inauguration the Croatian
Government started to carry out a new economic policy which has made
first results in the economic recovery, the settlement of the
state's debts and a new, more active, monetary policy, Minister
Crkvenac asserted.
The head of the Economic and Social Council, Vitomir Begovic,
informed reporters of discussions on the basis of a social
agreement.
Three social partners - the Government, employers and unions -
agree that they should lead a dialogue on the matter. Their joint
aims are to remove economic and social problems, Begovic said.
He described the talks on the basic element of the social deal as
very good, adding that a more difficult part - the harmonisation of
details - is to ensue.
A text of the document should be elaborated by the beginning of
November, Begovic told reporters.
(hina) ms