Sanader: The state has reduced its share in public debt, the responsibility lies with others

The issues of state indebtedness, lack of educated workforce, legalization of labor import, minimum wage, and many others marked this year’s traditional economic forum organized by the Croatian Chamber of Economy and the Zagreb Fair during the Autumn International Economic Fair.

Among the figures indicating a positive trend in the Croatian economy, Prime Minister Ivo Sanader particularly emphasized the reduction of the general government deficit from 6.3% to 2.6%, with the goal, as he stated, to reach zero percent in two years. He also highlighted that the state has reduced its share in public debt, while the other two components – banks and enterprises – have increased it, and that no one can escape that responsibility.

Regarding the exchange rate, a particularly painful issue for exporters, Sanader believes that the Croatian National Bank (HNB) is pursuing a good policy and that a stable exchange rate is beneficial for Croatia. The newly re-elected president of the Croatian Chamber of Economy, Nadan Vidošević, praised the current government for most of his presentation, emphasizing that restoring order in central public finances was the biggest challenge and that during this government’s mandate, record employment and the lowest unemployment rate were recorded. Vidošević marked the next year as a year of great opportunity for the Croatian economy as Croatia is expected to join NATO then.

– For Croatia, joining NATO is more important than joining the European Union because it is more encouraging for foreign investors than the EU. Every multinational company wants to cover that area – emphasized Vidošević. Prime Minister Ivo Sanader boasted about the economic growth rates achieved this year – 7% in the first quarter and 6.5% in the half-year – and announced that by the end of the year, the economic growth rate would be at least 6%. He emphasized that economic growth is secured alongside the reduction of the deficit. In response to questions from entrepreneurs, the Prime Minister reminded of the government’s stance that it would be good to reach a consensus between unions and employers on the minimum wage law. If a quick agreement among social partners is not reached, the government will take the initiative, Sanader stated.

The issue on which Deputy Prime Minister Damir Polančec and Sanader disagreed concerns the privatization of ports and the extension of the concession on maritime property for 40 years. Polančec responded that the privatization of ports is possible (with the exception of maritime property), but Sanader explicitly emphasized that his government will not privatize ports that are considered strategic branches for Croatia. Entrepreneurs also pointed out the problem of contributions (for health and pension), and Finance Minister Ivan Šuker responded that the burden of contributions is significant, but that the collected funds are not sufficient to cover 60% of needs. Presenting the data that in three years, budget revenues increased by 30 billion kuna without raising taxes, Šuker stated that the government’s policy is to reduce the budget deficit to zero and to reduce budget expenditures through structural reforms. In this way, he says, we will be in a position to reduce contributions while increased tax revenues will cover the funds that are lacking for pensions and healthcare.

A large part of entrepreneurs, primarily from construction, are concerned about the lack of appropriate workforce, so Filip Filipec, CEO of Tehnika, raised the question of when the import of labor (primarily from Bosnia and Herzegovina) will be legalized and made transparent. Sanader, without specifying and going into details, emphasized that Croatia is certainly moving towards the import of labor. In the context of the lack of educated workforce, Sanader, in addition to boasting about the introduction of compulsory secondary education, added that in the next term, within the Croatian Employment Service (HZZ), which must become an innovative institution, there will be a focus on retraining, mandatory courses for the unemployed, etc.

Questions related to shipbuilding, the textile industry, etc. received very general answers, such as that these sectors are important for Croatia and that we want to preserve, restructure, and develop them. Although the Strategy for the Textile Industry should have been completed and presented to the public long ago, said Minister of Economy Branko Vukelić, it is still going through the hands of the working group. (M. B.)