The IMF would reduce demand in the domestic market, and the economy would become more export-competitive. The short-term sacrifices would be significant, but this is the only long-term solution. However, this is precisely why there is little chance that anyone from the shortsighted Government will call the IMF.
How would you treat a child whom you allowed to play at being an adult because it convinced you that it ‘knows what it must do and is capable of doing it alone’, and then daily proves to you that the responsibilities far exceed its frail shoulders? You would take away its assigned ‘functions’ and return it to a tutor! The long-exhausted mantra from Mark’s Square ‘we know what we must do and we are capable of doing it ourselves’ has sent the Croatian economy (measured by real GDP) back to the beginning of the road, in 1990. Who is then surprised that every time the Government fails to do what it should according to its name, that is, govern, economists, increasingly often along with journalists, pull the joker from their sleeves – the IMF. The so-called budget rebalancing is probably not the last, but it is certainly the most urgent cry for help, because what we are doing wrong (and intentionally!) will cost us additional years of recovery. It is quite clear that the Government has no intention of calling ‘911’ as we are approaching an election year. The IMF does not fare better in public opinion either, and the biggest obstacle to its path due to pressure for wage reductions would certainly be the unions. However, it should not be forgotten that Poland, one of the few countries with GDP growth, opted for a more flexible arrangement with the IMF, and in the absence of its own institutions, the EU advises its member states that are not yet in the eurozone to seek technical and financial assistance from the IMF. What would it do to us if we are so averse to it?
