ZAGREB, April 12 (Hina) - The International Monetary Fund's mission, led by the new chief of the mission to Croatia, Dimitri Demekas, will arrive in Zagreb on Tuesday for talks with the Croatian government on a new stand-by
arrangement.
usluge-Bankarstvo-Makrogospodarstvo
ZAGREB, April 12 (Hina) - The International Monetary Fund's mission,
led by the new chief of the mission to Croatia, Dimitri Demekas, will
arrive in Zagreb on Tuesday for talks with the Croatian government on
a new stand-by arrangement.#L#
According to the IMF Permanent Representative to Croatia, John
Norregaard, the new deal is expected to insist on the strong fiscal
consolidation. Norregaard has said this will refer to the amount of
and trends in the rise of Croatia's foreign debt. Cuts in Croatia's
external debt are likely to be the focus of the negotiations.
Norregaard has announced that the main objective of the new stand-by
arrangement between the Fund and Zagreb would be the stabilisation of
a share of the foreign debt in Croatia's Gross Domestic Product, and
its reduction in 2005.
The other important issue is a high deficit of the state. The Ivo
Sanader Cabinet has projected the budgetary deficit for 4.5 percent of
GDP this year.
The IMF mission, that will stay in the country by 20 April, does not
expect to complete the negotiations at the first round of the talks.
They are likely to be wrapped up by early summer and the new
arrangement can thus be put on the agenda of the IMF Board of
Directors by the end of July.
The new arrangement would be the fourth for Croatia to conclude with
this international financial institution.
The first and the second stand-by arrangement were made in 1994 and
2001 respectively.
The third was concluded in February 2003 with the application until
mid-April 2004. The fourth arrangement is likely to be interpreted as
a deal to replace the last one.
The former coalition government, which concluded the third stand-by
deal, did not meet a few conditions including a level of the budgetary
deficit which totalled 5.5 percent of GDP, although the goal of the
arrangement was not to exceed 4.6 percent. Besides, the foreign
currency reservers were by 170 million dollars lower than what was
agreed under the arrangement.
State Secretary in the Finance Ministry, Martina Dalic, said in early
March that the incumbent government which was not responsible for the
implementation of the third stand-by arrangement (concluded by the
previous government), was planning to conclude a new arrangement with
the Fund.
The Fund's Permanent Representative to Croatia John Norregaard,
welcomed the intention of the Sanader Cabinet to ask for a new
stand-by deal which would replace the current one.
(Hina) ms