CROATIA HAS ENTERED PERIOD OF ECONOMIC STAGNATION - HDZ OFFICIAL

ZAGREB, May 28 (Hina) - For the first time in nine years, Croatia has entered into a period of economic stagnation and it would be an achievement to obtain a zero Gross Domestic Product (GDP) growth rate, a member of the Croatian Democratic Union's (HDZ) main secretariat, Djuro Njavro, told a press conference on Friday. Njavro noted that saving was vital at all levels in order to maintain economic and social stability. This could help Croatia to very quickly regain a positive growth rate as seen in the past few years. The party's spokesman, Ivica Ropus, spoke about the agreement reached between the HDZ and the "Opposition Six" regarding the principles of electoral legislation, assessing it as a victory for understanding and tolerance over exclusiveness and intolerance, which recently has been apparent in inter-party relations. Ropus announced that the HDZ's chief negotiator, Vladimir Seks, would on Tuesday or Wednesday offer the Opposition Six a working version of the electoral law. It is expected, Ropus said, that the Opposition Six will offer its recommendations for amendments to the Law on Croatian Radio- Television (HRT), as well as on the electoral law and the law on electoral units. Ropus said it was expected that the text of the electoral law could be agreed upon by the end of the week and be submitted for its first reading in the Sabor by mid June. The second reading would more than likely take place in September, however, Ropus did not exclude the possibility that it could take place in late June if stances to all three laws are agreed upon. According to Ropus, HDZ members in a working committee to draw up changes to the Law on the HRT will place emphasis on the issue of media coverage of the elections, party representation, and those issues which the HRT is obliged to define as a public institution. Personnel changes are not to be expected, however, changes to the HRT Council can be discussed, Ropus said. Ropus evaluated the indictment against Slobodan Milosevic and other Yugoslav military officials as an expected penalty for those who have ignored international conventions. The HDZ will make a statement regarding this issue at a later date, particularly since the indictment does not make mention of crimes committed in Croatia, Ropus said. Speaking about adjustments to the current circumstances in the economy, Njavro stressed they depended on the country's capability of adapting to the circumstances it was currently faced with. This is the purpose of the recommended budget review which is based on a zero GDP growth rate. Budget adjustments have accounted for a decreased income of Value Added Tax and customs tariffs. Expenditure has been significantly marked by the increased transfer of funds to the pension and health funds, which, as Njavro said, require vital consolidation. Following the budget review, these funds will receive about US$300 million. Njavro also announced possibilities of tax alleviation, export incentives, as well as incentives towards small and medium businesses and speedier activities with regard to the employment policy. Njavro also spoke about the privatisation of one of the most profitable public companies - Croatian Telecommunications (HT), and stated this could mean Croatia's direct integration into the world economy and the arrival of foreign capital in the domestic economy. Privatisation of the HT is vital also because Croatia's access to the World Trade Organisation (WTO) is conditional upon Croatia opening its telecommunications market to competition from other countries. If it were not to adjust itself, the HT would become a problem once it is faced with state-of-the-art equipment owned by central European countries, warned Njavro. (hina) sp/rml