MESIC EXPECTS ECONOMY WILL START RECOVERING NEXT SPRING

ZAGREB, Nov 28 (Hina) - President Stipe Mesic told reporters on Tuesday he expected a watershed in the recovery of Croatia's economy next spring, and that in the meantime it was necessary to prepare concrete projects and fix the infrastructure.#L# He expects the government to take steps which will activate the economy and encourage employment. Asked to assess the government's performance, the president said he was satisfied with most of what the government had done. An economic development strategy could not have been expected before the government was able to review the state of affairs it encountered, he reminded. The Croatian state is too expensive and we should look for possibilities to save, but without its reflecting on development, Mesic said about claims that next year's draft budget was overstrained and not socially but development-oriented. He stressed the financing of the Bosnian Croat military component should not drain Croatia. Croatia needs to create conditions which will attract foreign capital and investors, Mesic said, adding this primarily referred to legislation and the consistent enforcement of same. Now our road to Europe is safe and we have to believe that foreign capital and investments will arrive too, he said. Asked about announcements of a general strike of more than 250,000 workers, the president said the strike was a legal and legitimate method for employees to fight for their interests, but that it would be better to have a social pact. Commenting on an announcement bankers made on Monday to the effect of raising interest rates on loans if a tax reform was adopted, Mesic said it was a case of different interests. It is difficult to meet every request but most should be happy with the tax reform, he added. Mesic asserted bank funds mostly did not go into production, which he said would be best. The banking sector and the monetary policy should encourage the economy, he said. (hina) ha jn