CROATIAN GOVERNMENT HOLDS SESSION UNDER TUDJMAN'S CHAIRMANSHIP

ZAGREB, Nov 7 (Hina) - The Croatian government met on Thursday under the chairmanship of President Franjo Tudjman to assess its work over the past year and set tasks for the next period. Speaking of foreign policy successes, Prime Minister Zlatko Matesa said that they had been achieved thanks to the policies of the President of the Republic. As foreign policy successes Matesa cited the process of the peaceful reintegration of the Croatian Danube river region, the implementation of the Dayton, Washington and Paris agreements, the normalization of relations with Yugoslavia, and Croatia's admission to the Council of Europe. "Croatia had to prove and still has to prove that it is a Central European and Mediterranean country," Matesa said in comments on attempts at pushing Croatia back into the Balkans. Such approaches would result in high inflation, untimely execution of financial obligations and high indebtedness abroad, he added. "Croatia meets all its financial obligations and is able to collect all its taxes and control its currency. This makes it a Central European country," Matesa emphasized. Recalling that macroeconomic stability was a precondition for economic growth, the Prime Minister said that in the last three years during which the economic stabilization programme had been implemented average annual inflation had been 0.7 per cent, that this year's inflation was expected to reach between 3 and 3.5 per cent, and that the external debt was less than 25 per cent of the gross domestic product. Croatia was strong enough to stimulate its economy, Matesa said, adding that this year's government subsidies totalled 843 million kuna (DM 240 million). President Tudjman said that Croatian successes were not sufficiently presented to the international and domestic public. Tudjman stressed that he and the Prime Minister were in complete agreement on all important economic issues. "The government has had full autonomy in its work," he added. The President emphasized that not only economic interests but also political ones were always present in international politics. "In this regard, Croatia has been and remains exposed to pressure," Tudjman said, asserting that the government must resolutely develop international cooperation "but not allow interference in Croatia's internal matters." "We will not allow various diplomatic bureaucrats to solve crucial issues of our democratic internal and economic development," the President stressed. He said that links with international financial institutions and individual countries should be intensified. Tudjman said that one of the crucial tasks Croatia was faced with was the peaceful reintegration of its eastern Serb-held Danube river region as soon as possible. He noted that there were attempts to use this matter as a form of pressure on Croatia to return to Balkan and southeastern frameworks. "It is not in Croatia's interest that all Serbs leave the area as it was not in our interest that they left central Croatia," he said, adding that agreements should be made with local Serbs so that they would realize that "it is in their interest to hold elections as soon as possible." Tudjman said that some foreign ambassadors would like to internationalize this matter although it was an internal Croatian issue. The President said that more resolute efforts should be made in the restructuring of big public companies, but that it should not be allowed that those companies ended up in the majority ownership of foreign investors. Drawing attention to the importance of demographic renewal, he said that it would not be possible without the return of Croatian emigrants. As a special task of the government, the President cited the further development of relations with the Croat-Moslem Federation of Bosnia-Herzegovina. This government has continued everything that was positive in the former governments. It has worked in more favourable conditions but it has also proved more efficient, Tudjman said. (hina) vm mm 072032 MET nov 96