ZAGREB, Oct 26 (Hina) - The Sabor's House of Representatives on Thursday adopted a report on the operation of the Croatian Pension Insurance Institute (HZMO) in 1999, which it had debated the whole morning, and entrusted the
government with improving the situation in the pension insurance system. During the debate, deputies mostly criticised the institute for reducing the value of its portfolio almost by one half instead of augmenting it.
ZAGREB, Oct 26 (Hina) - The Sabor's House of Representatives on
Thursday adopted a report on the operation of the Croatian Pension
Insurance Institute (HZMO) in 1999, which it had debated the whole
morning, and entrusted the government with improving the situation
in the pension insurance system.
During the debate, deputies mostly criticised the institute for
reducing the value of its portfolio almost by one half instead of
augmenting it. #L#
The portfolio which the HZMO (formerly called the Pension Fund) had
owned in 1992 had been estimated at DM4.2 billion and last year its
value was a mere DM2.8 billion.
Today, the value of that portfolio is ten times smaller because many
of the companies from the portfolio are facing bankruptcy and the
most valuable ones have been sold, said Damir Kajin of the Istrian
Democratic Assembly (IDS).
Instead of being used for the augmentation of HZMO's income, the
portfolio was used for the creation of the "Croatian tycoon
wonder," Kajin said.
Snjezana Biga Friganovic of the Social Democratic Party (SDP)
agreed with Kajin's assessment, adding that orchestrated disorder
aimed at augmenting the wealth of individuals had been at work in
the HZMO.
There is no evidence on how and at what price the companies were
sold, whether they were paid off or the like, Biga Friganovic said.
She warned that the HZMO had terminated 17 contracts on the sale of
shares because the buyers had not paid their obligations and now the
HZMO is in a situation where it should even return the money to those
people. This means that some "Gucics and Kutles" have got hold of
the companies, sucked out their capital, thrown employees out in
the street, returned the shares and now the state even owes them
money.
The contracts have caused huge damage and one should punish all
those responsible for that crime, the SDP deputy said.
A former prime minister, Zlatko Matesa of the Croatian Democratic
Union (HDZ), said he was disappointed with the debate because it did
not focus on the essence of the problem but on scoring striking
political points.
Instead of the pointless discussion about who is responsible, one
should discuss how to achieve an increase in pensions, said
Matesa.
He warned that the growth of pensions would in the future continue
to be closely tied to the budget because the collection of
contributions would not be sufficient to fill the pension fund for
long.
Numerous deputies warned about the very difficult situation in the
HZMO.
Kajin said the Institute was facing bankruptcy proceedings given
that the number of pensioners and those paying contributions was
the same. The situation is further deteriorating, considering that
the number of workers is decreasing and the number of pensioners
growing. Particularly worrying is the fact that the collection of
contributions from legal entities amounts to 82 percent and of
physical entities to 68 percent.
Most deputies agree with most measures the Institute has put
forward in order to improve the situation - increasing the
collection of contributions, accelerating the privatisation of
companies owned by the Institute, reorganising the Institute, and
continuing the pension reform. However, they warn that some
measures, such as the one on taxing pensions, would not become a
reality so quickly because pensions are still at a very low level.
(hina) jn rml