Novotny: Martina Dalić Has Little Room for Maneuver

The name of Martina Dalić as the new Minister of Finance has been speculated for some time, not only because she has previously held a position in the same ministry but also because, given that she is a member of the ruling party, the likelihood of her accepting a new role was higher (reportedly, some have declined this ‘honor’).

While the thought of tackling state finances at a time when the budget for 2011 has already been adopted is repulsive to most economists, štoviše it was neither crafted nor voted on by the dismissed Minister Šuker, but rather by the same Government and Prime Minister who dismissed him, the motives of Martina Dalić remain unknown. This is especially true since no one expects her to succeed in making any fundamental changes. Analyst Damir Novotny states that there is no dispute that she is a minister of undeniable economic competence in public finances, but her doctrinal orientation can already be discussed.

– Fiscal policy can only be approached in two ways, one of which is completely contrary to the previous approach. This approach is friendly towards households and businesses, reducing the tax burdens on these sectors while increasing property taxes and similar. Can a person who is also one of the authors of the economic development strategy in Sanader’s government make a shift towards such a policy? I don’t know. It will be difficult to be a solo player in a Government where the key problem is an exaggerated social policy, with no industrial and fiscal policy – assesses Novotny.

He states that in Eastern Europe and Turkey, it is common for center-right parties to reduce social expenditures to allow more room for expansive fiscal policy, as this is the only way to alleviate the endangered position of small and medium-sized enterprises that drive development and thus create a better investment climate. The HDZ coalition Government has always done the opposite as it is oriented towards various voter groups, primarily the HDZ voting base. And Martina Dalić, as a party member, is part of that orientation, so it is not difficult to conclude that for her, in an election year, there is simply no room for maneuver. (Gordana Gelenčer)