Sanader, Šuker and Polančec – Alone in the World

No relevant economist supports the government’s hesitation to respond with radical measures to the deepening recession that is at the door.

Remember the date February 10, 2009. On that day, a meeting of the HDZ Presidency was held, during which anti-recession proposals developed at the Economic Institute of Zagreb were rejected even before the Economic Council meeting.

After Sanader, Šuker, and Polančec, with the agreement of party leaders, ‘threw mud’ at the years of loyal economists from Kennedy Square, it can be said that the Prime Minister and his economic ministers have remained – alone in the world. They alone do not realize that an urgent, convincing, radical package of anti-recession measures needs to be adopted.

Well, if we need to be precise, this trio still has someone on their side. The loyal vassal from HSS, Josip Friščić, also successfully nurtures autism. After the Presidency of his party, Friščić states that ‘the way out of the crisis is through new investments, consumption, not restrictions.’ From this, it is easy to conclude that the ruling coalition, in firm unity, will lead the country into – depression.

The Government on Hold However, when it comes to experts, no relevant economist in Croatia would agree with the ruling decision not to go for an urgent budget rebalancing. The proposed packages (HUP, HGK, SDP…) have differences, different economic schools can be hinted at, but all start from a very serious assessment of the future. At a time when assessments are coming from the UK government that the worst crisis in the last 100 years is underway, Finance Minister Ivan Šuker asks for a few months of waiting to see the results.

‘From a distance,’ it can be seen that the HDZ Presidency at its meeting primarily thought about how not to lose in the upcoming local elections. And there is no price they are not willing to pay (from the pockets of entrepreneurs and citizens) just to stay in power.

The government has no anti-recession package. According to what Polančec and Šuker (clearly still very much at odds, as confirmed by opposing views on VAT) offered to journalists: borrowing from abroad, not at home, ensuring that state companies regularly pay their obligations, quality control of imported goods, etc., you would think that they are trying to help a seriously ill person in life-threatening danger – with chamomile tea!

Outside the timeless and self-hypnotizing atmosphere in Banski Dvori, something is happening in real life. ‘A hundred flowers are beginning to bloom.’ It is clear to everyone that Sanader’s government lacks the courage, and – we should be afraid – the knowledge to respond to the crisis, so interest groups have begun to self-organize. Various proposals are emerging. Perhaps the public is confused by their number, different approaches, and proposals, but a good synthesizer would find elements for a consistent and stimulating economic anti-recession program in all of this.

Marković’s Program This weekend, we had the honor of interviewing Ante Marković, a man who twice lifted the economy from the ashes in similar crisis times. First in the early 80s, as the president of the republican government, and then in 1989, as the Prime Minister of SFRY. Even today, at the age of 85, his proposals seem more consistent and decisive than those offered by the people in power. Leadership is confirmed in the most difficult times. That is when it is seen whether someone has it or not.

In addition to proposing a 20 percent budget cut, Marković also proposes the introduction of import duties. The regular EU fans would immediately jump in with the claim that this contradicts the obligations we must undertake in exchange for membership. However, the picture is no longer black and white. French President Sarkozy openly demands that the local auto industry procure parts in France. Our neighbors, the Slovenians, increasingly show disrespect for the EU (for example, vignettes). They have a refined sense of trends. The crisis that has emerged could make the EU project very fragile. If everyone engages in protectionism, it is foolish for Croatia to play the hero. Responsible governments know how to recognize priorities. Sometimes this means also offending the beloved and hardly accessible European Union. Including disrespecting the Public Procurement Act in favor of domestic players.

In business, the momentum from good times slows down slowly (new tubes of the Mala Kapela and Sveti Rok tunnels are being built, Janaf expects that demand for oil will be high, Dioki is establishing a fleet because during the boom it could not find tankers for transport…). The business community is adapting to the crisis, but without capable leadership at the macro level, entrepreneurs have no choice but to go into defense.