PM RACAN SAYS INSURED SAVINGS TO BE PAID OUT BY YEAR'S END

ZAGREB, Oct 30 (Hina) - Croatia's Prime Minister Ivica Racan confirmed on Monday that citizens whose banks had gone bankrupt would be paid their insured savings by the end of the year. Addressing a news conference in Zagreb, he said the government intended to take a series of steps to halt the unemployment rate and incite new employment opportunities, goals which he said could be achieved in the first half of 2001. Racan said tenders had been invited for banks willing to take government bonds and pay citizens their insured savings. The government's liability according to citizens' insured savings is about two billion kuna ($225 million). The insured savings were deposited in amounts up to 100,000 kuna (about $11,200). The prime minister said he was satisfied with the latest talks held with representatives of the World Bank and the possibility of getting $250 million next year to stimulate small and medium-sized entrepreneurship. He announced measures to further reinforce tourism, and particularly encouraging the development of some companies he called the locomotives of Croatia's progress, 30 companies, he said, with a future, good management, and export possibilities. Racan announced that on Friday, the government would debate a draft budget and its elements for the next three years. This will be accompanied by a framework strategy for economic development and stability. Racan said it was possible Value Added Tax, currently 22 percent, might be cut, but on condition that the government and parliament reach a consensus to radically cut part of public spending. He told reporters 40,000 new jobs had been opened in the last ten months, but also that a high number were closed, which brought the unemployment figure from 320,000 to 350,000. He stressed the jobs which had been closed were only formal ones because people did not actually do any work. "I don't expect major social unrest. I expect understanding, criticism levelled at the government that it could have done something but didn't, and suggestions as to what can be done in this situation," he said. This week, he added, the government will also speak about last week's ecological incident in Slunj, when 7,500 litres of sulphuric acid leaked from an overturned cistern. The government is also expected to debate amendments to the law on state administration and civil servants in order to ensure legal conditions under which it will be possible to "clear the air in state services." Racan said he stuck by his suggestion that applications be invited for people on important positions, for instance in the customs administration and the finance police. The prime minister said he was against separating children on national grounds. Asked if the government would turn a deaf ear to the national division of Croat and Serb children in a kindergarten in the eastern town of Vukovar, he said this case demonstrated that reintegration was a complex and difficult process and that a lot needs to be done to normalise living in formerly war-stricken areas. Asked about a Bosnian Croat referendum announced for election day in the neighbouring state, the Croatian prime minister said he did not think a referendum was the best solution. Racan will neither support nor condemn it, and holds its organisers responsible for it. A decision to hold the referendum was made on Saturday at a Croat people's assembly in Novi Travnik. Racan said his government would continue taking care of Croats living abroad, especially in Bosnia and Herzegovina, not through conflicts but through cooperation with international factors, and efforts aimed at making constructive contribution. (hina) ha jn