ELECTION RESULTS HAVE NO EFFECT ON CROATIA'S CREDIT RATING

ZAGREB, Nov 25 (Hina) - The electoral victory of the Croatian Democratic Union (HDZ) in itself has no effect on Croatia's credit rating, which remains at BBB-, for the debt expressed in foreign currencies, and BBB+ for the debt expressed in the national currency, one of the leading international credit rating agencies, Standard & Poor's, said in a report released on its web site on Tuesday. #L# Croatia's credit rating is still determined by the reduction of the fiscal deficit and privatisation, which are necessary to stop the growth of the currently moderate public debt, as well as to improve the country's chances of joining the EU, said analyst Kristel Richards. As in the case of any other country, the agency will analyse whether the economic and fiscal strategies of the new government are sound and whether they are based on the successful fiscal consolidation inherited from the previous government. A less favourable credit rating may be caused by significant deterioration of the country's fiscal position. The improvement of the rating is currently not possible due to a deteriorated situation with the foreign debt and the need to modernise the legal and judicial system - two reasons the new government will have to work on, Richards said. Standard & Poor's does not expect the HDZ's return to power to be a return into international isolation, since in the past four years significant changes have been made, resulting in significant democratisation of the country. The agency also notes that the HDZ itself had gone through important reforms since 2000 and that its leader Ivo Sanader had already said that his party would meet all the conditions for EU membership. (hina) rml sb