CRO OPPOSITION PARLIAMENTARIANS HOLD TALKS WITH IMF MISSION

ZAGREB, Sept 30 (Hina) - A mission of the International Monetary Fund (IMF), being on a two-week working visit in Croatia, on Thursday held talks with Croatian parliamentary opposition parties' representatives on the economic situation in the country. At the meeting, held in the national Sabor, the head of the IMF mission for Croatia, Hans Flickenschild, acquainted opposition representatives with the main aspects of the cooperation between the IMF and the Croatian Government and with priorities of regular quarterly visits of the mission to the Croatia in relation to the fiscal and salary policies, stabilisation of the banking system and short-term loan arrangements. Assessing in general the situation in the Croatian economy, Hans Flickenschild said the country was still in recession and would record a drop of two percent in the Gross Domestic Product (GDP) this year. Next year, Croatia has prospects of an economic recovery and two or three percent of increase in the GDP, according to him. Opposition members told IMF mission that since their last visit to Croatia three months ago, no positive trend had been registered and the country's economy was still paralysed by illiquidity, internal debt, foreign trade deficit, high interest rates, a drop in exports and unemployment due to the Government's economic and monetary policy. Goranko Fizulic of the HSLS said the non-existence of a stand-by arrangement with the IMF was a mistake of the current Government, and therefore a new government would negotiate with IMF under less favourable circumstances next year. Mladen Vilfan of the LS said certain kinds of pressure exerted by the IMF had contributed to the current developments, primarily due to "two universal remedies of the IMF - a stable currency and a balanced budget. According to Vilfan, they caused a slowdown in the economic development and destimulation of exports. Vilfan, Fizulic, and other opposition parliamentarians told IMF experts that they expected that the new government (established after the coming election) would face a very difficult economic situation and it would need IMF experts' assistance in coping with a crisis in the first six months ad later in creating conditions for progress. All of them feared that biggest problems would be in pension and health insurance funds. The IMF mission's head Flickenschild refused objections about the IMF hard monetary policy. He agreed with the opposition members on, according to him, unclear and not transparent pension and health insurance funds in Croatia. (hina) ms