WHY ITALIAN INVESTORS STILL REGARD CROATIA WITH A WARY EYE

ZAGREB, Jul 30 (Hina) - The trade between Croatia and Italy has reached US$ 2.5 billion per annum, which makes Italy Croatia's second most important foreign trade partner. Importing about US$ 1 million worth of Croatian products and raw materials each year, Italy is the best customer for Croatian plastic and chemical products, timber, clothes and footwear, says Giuseppe Daquano, director of the Zagreb-based Italian Foreign Trade Institute. Also, Italy is the second most important investor in Croatia (after Germany), according to Daquano. Commercial investors, however, are still somewhat reluctant to go all the way. Rather than running a one-man show, they prefer to engage in joint ventures with Croatian partners. They also seem to be averse to shelling out cash - machinery and equipment account for 85% of total Italian investments. Another problem, according to Daquano, is the unrealistically high price of Croatian companies. Daquano advocates the privatisation of hotels and other tourist facilities as a means for improving the quality of services, which are not measuring up to European criteria. Announcing the impending opening of a Cassa di Risparmio branch in Zagreb, Daquanno said it it would bring both fresh capital and the Western-European business spirit to Croatia. (hina) as 301351 MET jul 96