Organized by the Croatian Economic Society, a Round Table and public expert discussion was held in Zagreb on the topic of the Economic Recovery Program adopted by the Government of the Republic of Croatia on April 19 of this year.
The aim of the Round Table ’60 Days of the Government’s Program’ was to bring the measures and activities from the Program closer to economists and to initiate a public discussion on the real implementation and possible supplements that could assist the Government. The conclusion of the economic experts was unanimous. The Government’s Economic Recovery Program is a continuation of the economic policy that has been implemented since the 1990s and which leads Croatia into increasing indebtedness and budget deficit. They emphasized that the biggest mistake of that time was that they created property owners, not entrepreneurs. Croatia urgently needs a complete overhaul of its economic system as the current state is simply unsustainable. Opinions were expressed that while the Government loses strength on trivial amendments to laws that cannot improve the real state of the economy, it weakens its position and strength to implement those reforms that are truly necessary for recovery, which would build a new economy on sound economic principles, leading to increased employment and productivity.
Economic experts highlighted that increasing productivity and employment are the most important issues the Government should address. They also pointed out that the program’s shortcoming is that it is entirely focused on reducing costs, while it lacks measures to increase productivity, employment, competitiveness, exports, etc. Experts also complained about the changes to the tax system that were not well thought out, warning that some changes could nullify all the savings that have been achieved so far. Projections of transitional countries were also presented, all of which have some form of tax on capital income and capital gains, while Croatia is the only exception in this regard, and that changes towards fairer taxation are necessary. The situation in which high levies on consumption and income finance the entire state and its deficit is not sustainable.
At the beginning of the Round Table, Željko Lovrinčević, economic advisor to Jadranka Kosor, spoke and was supposed to clarify some of the measures that would specify the Program. He emphasized that the main goal of the program is to ensure stable and sustainable growth with an emphasis on increasing productivity, which the gathered experts welcomed, but still pointed out that they had not yet heard specific measures to achieve this. Lovrinčević stated that Croatia is in the third phase of recession in which restructuring of the economy, stabilization of fiscal expenditures, and restructuring of the number of employees must occur, and announced that under the clause of two dismissed for one employed, a five percent reduction in employment would be achieved by the end of the year. At the same time, he highlighted attracting foreign investments as a key goal. However, experts emphasize that this is a false hope. Ljubo Jurčić points out that we do not need foreign investments such as the opening of more shopping centers, but a meaningful economic policy, which can only be devised by gathering economic experts in Croatia, i.e., a kind of think tank. Lovrinčević also dispelled the illusion that Croatia would manage to achieve 0 percent GDP growth by the end of the year.
