How to eliminate the now critical level of illiquidity in the state? Instead of the Government taking stakes in companies, and thus the accumulated debts, it should authorize the Croatian Privatization Fund to take over the properties of companies that owe the state. This is an innovative measure proposed by Radimir Čačić in an article he writes for the business weekly Lider.
In addition to the urgent adoption of decisions that will stimulate the economy, such as reducing VAT in tourism to the level of VAT in neighboring countries and restructuring loans at HBOR from seven to 15 years, Čačić proposes that HFP be authorized to take ownership of the properties of companies with obligations to the state by paying 70 percent of the price, with the possibility of repurchase within three years. Additionally, the remaining six billion in overdue debts should be paid, and mandatory issuance of guarantees for payment within the agreed timeframe should be introduced when the investor is the public sector. The ultimate goal of the measures is to reduce state decision-making to automation or merely a control function, thereby maximizing the reduction of incompetence and corruption in government. Čačić emphasizes that if the Government does not start addressing the problem of illiquidity immediately, the system could become completely blocked.
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