The national external debt amounted to nearly EUR26.8 billion at the end of April, up 14.9 per cent from a year ago and up 4.9 per cent from the end of 2005. In April alone, the debt went up EUR478 million, of which 416 million was incurred by banks, the Council said in a statement after the session.
In this year's first four months, the national external debt went up EUR1.25 billion. Banks' external debt went up EUR1.33 billion kuna, while the state's external debt went down EUR562 million thanks to central bank measures which facilitated bridging the gap between budgetary revenue and expenditure with domestic financing.
The Council said the most acceptable solution for curbing the debt, both from the point of view of banks' long term interests and the state as a whole, would be if banks adequately responded to the central bank's offer to further reduce the rate of their obligatory reserves, which is currently 17 per cent, by giving them sufficient funds from domestic sources to follow the expected economic and personal spending growth.