GOVT WARNS ABOUT HIGH INTEREST RATES FOR LOANS GRATED TO CRO COMPANIES

ZAGREB, April 27 (Hina) - The Croatian Government on Thursday agreed in principle with the Croatian Post's seeking a loan from the Raiffeisen Bank and Croatian Telecom's borrowing from Siemens, however, it warned that the interest rates of 10 and 6.25 percent respectively for the loans, which would be used for the purchase of equipment, were too high. The Government therefore requested that solutions with more favourable interest rates and more transparency in the purchase of equipment be found. The Croatian Post sought the Government's consent to seek a loan from the Raiffeisen Bank worth DM12.5 million, with maturity of 4.5 years and an annual interest rate of 10 percent. Finance Minister Mato Crkvenac warned this was a very high interest rate and, agreeing in principle, requested that the Post look for a more favourable solution. The interest rate of 6.25 percent for the loan the Croatian Telecom would seek from Siemens encountered criticism as well. The loan, which amounts to US$20.16 million, would be used to pay for the equipment and services in the GSM CRONET network. Because of the purpose of the loan (purchase of equipment), the Minister of Public Works, Reconstruction and Immigration, Radimir Cacic, believes this loan is even less favourable than the first one. "If you are purchasing goods with an interest rate of 6.25 percent, one can say you have been ripped off," Cacic said. Economy Minister Goranko Fizulic had the same opinion. He believed that "the practice where the state was considered everybody's cash cow has continued." Speaking about the companies and banks which grant such loans, Fizulic said that "they should seek extra profit somewhere else, not in Croatia." (hina) mm rml