CRO GOVT WILL CONTINUE WITH ECONOMIC STABILITY POLICY

( Editorial: --> 8471 ) ZAGREB, Jan 30 (Hina) - Croatian Prime Minister Zlatko Matesa on Friday held talks with some 60 business people, financial experts and bankers and told them his government would continue to carry out a policy of economic stability this year. As goals in economic relations with foreign countries, Matesa pointed out full membership in the World Trade Organisation (WTO), the signing of a trade and cooperation agreement with the European Union, and the completion of talks on full membership in the Central European Free Trade Agreement (CEFTA). Matesa described as necessary the continuation of restructuring public companies whose partial privatisation will be suggested by the government. Besides the rehabilitation of banks, the government would insist that they be the bearers of increased national savings, Matesa stressed. Discussing measures for stimulating exports, besides the introduction of the Value Added Tax, Matesa described as significant credit financing and reduction of levies on and from salaries, stressing that this positively affected employment. The best approach to employment policy was the reduction of working expenses, Matesa said. These included the abolition of water supply and child support taxes, and changes in the payment of membership fees for the Croatian Chamber of Commerce. Croatian National Bank governor Marko Skreb stressed that changes in monetary policy should not be expected, and the policy of a stable currency would continue. Describing articles in newspapers about a 20 per cent devaluation as unfounded, Skreb stressed that the Bank had never discussed the possibility. Commending the Croatian policy of macroeconomic stability, business people especially applauded the announced measures for decreasing working expenses as a stimulus for employment. Most representatives of Croatian companies expressed support for the introduction of the VAT. However, catering companies suggested that the government discuss a selective rate of VAT. A special problem was the lack of liquidity and the poor protection of creditors. They warned that the state should lower its expenses, adding that interest rates were still too high for the economy, despite their decrease. (hina) lm mm 302102 MET jan 98