Linic said illiquidity was so high that it could not be dealt with without bankruptcies. "The judiciary hasn't managed to raise efficiency, everybody is afraid of bankruptcies, and restructuring during bankruptcy takes too long. The ministries of the economy, finance and the judiciary have worked on this project and in a few days you will see a law on financial operations."
"The biggest problem is that we have HRK 43 billion in blocked funds," he said, adding that everything could be solved by reaching agreement between the debtors - unsuccessful companies - and the biggest creditors - the state with more than HRK 50 billion and commercial banks.
Linic said if unsuccessful companies, the government and commercial banks reached agreement, "we will manage to either write off part of our claims, extend them, or we will go into the capital, or we we will replace them with some immobilised property."
"It will all be done through administrative proceedings, very efficiently, with the government and the finance ministry taking on the burden."
Everything will be done to preserve jobs, but such companies will no longer be able to create losses, because they no longer have the right to spend citizens' money on failure, said Linic.
He went on to say that until the end of the year the government would also pursue the policy of "fighting for new jobs," and that investments this year would be seven per cent higher than in 2011. "The prime minister wants us to be successful and to show that we can increase investments."
Linic warned the HEP power company that it must change its habit of not paying its obligations within 60 days. "HEP must start investing in transmission and distribution. We must also encourage private owners who have launched wind farm projects, notably in Dalmatia."
Linic went to say that railways and agriculture were the two most unsuccessful sectors.
"Agriculture has eaten up most of the taxpayers' money, yet more than 50 per cent of farmland is uncultivated and food is the biggest import," he said, adding that the money intended for farming "went into personal enrichment and corruptive party activities, and not into production."
"The rail sector was completely destroyed with a 2004 government decision and we must change that," said Linic.
He reiterated that the government realised that citizens bore the brunt of the crisis but that it had assessed that they would understand. He said attempts were being made to distribute the brunt of dealing with the crisis more equitably, "so next year we will try not to place the burden on citizens and VAT but unused property, the immobilised property of those who don't know what to do with it."
Speaking of the external debt, the minister said it was such that over the next four years "we won't be able to reduce it, but we shouldn't increase it either."
The Split convention was dedicated to the state of the economy in the southern coastal region of Dalmatia.