We cannot expect GDP growth in the coming year; in fact, it will be good if we stop recording zero, and the fact that banks are foreign-owned is not the reason why the crisis has spilled over into Croatia to such an extent.
These are just some of the messages that could be heard at the 3rd Economic Conference of the Zagreb šchool of Economics and Management held on Thursday titled Reactions of Economic Policy to the Crisis in Central and Eastern Europe. Among the speakers, in addition to numerous professors from ZŠEM, were Vladimir Gligorov from the Vienna Institute for International Economic Relations, economic analyst Velimir Šonje, and Mirna Dumičić from the Croatian National Bank. In his presentation, Gligorov spoke about neoclassical economic theory and transition, highlighting the growth that can be expected at the moment of joining the European Union, but also the consequences such as a depressed labor market.
– Countries that do not have their own growth cannot expect a large influx of foreign capital to return. I can imagine a return of investment to Poland, but not to the Balkans. If significant changes are not made within the country, a period of low growth rates will occur – said Gligorov, adding that if lucky, GDP growth next year will be zero. Velimir Šonje spoke about the theory mentioned back in 2007, that foreign ownership of banks means greater vulnerability to global crises. – There are relatively few countries where financial integration has caused a crisis; what can be implicitly understood is that the spillover occurred through trade flows and similar – explained Šonje. In conclusion, he added that the three major losers in the crisis, Hungary, Slovenia, and Croatia, are all countries with fiscal problems, so perhaps this should be investigated. (T. B.)
