Finance Minister Ivan Šuker stated today in Opatija that the expenditure side of the budget for 2010 will not be higher than this year. The budget for 2010 is expected to be at the level of 120.5 billion kuna, but the final amount will only be determined later, Šuker said at the 17th consultation of the Croatian Economic Society “Economic Policy of Croatia 2010.”
Šuker reminded that 87.2 percent of the budget is defined by legal provisions, such as salaries of state and public employees, pensions, and social benefits. For incentives, support, and subsidies, 14 billion kuna is allocated, which needs to be reduced, but only with the implementation of structural reforms, Šuker noted, emphasizing that support or subsidies cannot be given just to help someone survive. Šuker also pointed out that there is no room for additional tax burdens because the economy and citizens could no longer bear it, so the expenditure side of the budget must be reduced. Painful structural reforms are necessary, and for that, political consensus is required, the finance minister asserted.
The president of the Croatian Economic Society (HDE) Ljubo Jurčić stated that it will only be after the end of the first quarter of 2010 that we will see if we have hit the bottom of the crisis. Croatia has its own crisis, with only 20 percent of its impact coming from the spillover of the global crisis, while the rest is a result of domestic policy, Jurčić emphasized. The causes of the Croatian crisis lie in the fact that instead of the usual goals of economic policy such as employment growth, exports, and real income, stable exchange rates and a zero deficit of the state budget are proclaimed as goals, which are actually instruments, not goals, Jurčić said, advocating for strengthening industrial activity and increasing exports.
