Croatia is a country that has come to terms with the fact that it will go bankrupt

There are increasing arguments that Croatia is a country that has come to terms with the fact that it will end up in bankruptcy. It is enough to see the absence of reactions to the announcement by Standard & Poor’s that the prospects for the stability of public finances have further deteriorated.

The rating of stable ‘junk’ after just half a year received the designation of unstable ‘junk’. Reactions? Actually none. Minister of Economy Vrdoljak announced that he called the relevant agency and hopes that things will improve soon. And the on-duty in HUP, CEO Davor Majetić, diplomatically reiterated the concerns of employers. It is true that it is the holiday season, but the absence of any serious reaction is proof that everyone is slowly giving up on seeking an effective solution.

A few years ago, the thesis was that the citizens of Croatia were tired of the transition. Now it can be said that they are tired of the recession.

Better when they are on vacation An example of this fatigue is the absence of public reaction to the departure of the Prime Minister and ministers on a mostly two-week vacation. In previous years, there was outrage. How can they go on vacation when the situation in the country is so dramatic, the public protested. This summer, apart from the observation, no one is complaining. The reason? Resignation. Whether ministers are in their offices or not, the recession continues. So if that is the case, perhaps it will be less harmful if some of them do not make decisions for two weeks.

One of the few who has not come to terms with bankruptcy is Finance Minister Slavko Linić, who asks ‘does anyone understand that we will exceed 190 billion kuna in debt and that we need to pay 12 billion kuna in interest, and we do not have a kuna for that?’

The reality is that almost no one wants to understand that the country is on the brink of bankruptcy. If the government and the opposition do not have quality solutions, if both are amateurs in motivating broad layers of citizens, then apathy is expected. Let it be as it may…

And maybe those from Brussels will offer us a solution, every twentieth citizen of this country will think for a moment, one who belongs to the increasingly rare group of irreparable optimists. Unfortunately, when you do not help yourself, others will not help you either.

It is very likely that this autumn the European Commission will demand that the emphasis in the budget shift from revenue to expenditure. In translation, that no longer goes into the economy to collect the necessary amount of money for fixed budget expenditures but that budget expenditures begin to be cut. And the bulk are personnel costs in state institutions including, very likely, pensions.

The solution is in budget revenues This approach is a solution for incompetent, indecisive governments. The real solution is still on the revenue side of the budget. But not just by collecting everything that can be collected. It is not a solution to take more from an ever-smaller pie.

The solution is for the pie to be bigger. And that means that first, existing entrepreneurs in Croatia need to be encouraged to produce, sell, export more…, then with the remaining or even reduced expenditures, the budget deficit will fall below that infamous three percent of GDP. The attempt to reduce the deficit to less than three percent of GDP – which is getting smaller every year – is anything but a sustainable solution.

It seems that the government is convinced that the still-living part of the real sector is not worth greater effort and help. How else to interpret Linić’s words that ‘the private sector is completely financially incapable due to the crisis and cannot recover on its own, let alone start strengthening production and investments.’

And that’s it. No further. Since the private sector cannot initiate economic growth, it needs to continue borrowing, selling whatever can still be sold. Let’s accept that. To buy, say, two years in that way. What will the government do in those two years? How will the private sector wake up? With investments? Enough with the general answers! Come on, gentlemen in the government, develop scenarios, put your political heads on the block regarding achieving the targeted GDP growth rate. That may be the only way for the nation to positively awaken from apathy. There is also a variant of destructive awakening, but a hot autumn has been announced for five years now. And it hasn’t happened.

The only problem is that on the opposition side, along with some minor hints, there is no more meaningful alternative economic program. Until a ‘third way’ coalition appears, we remain reconciled with bankruptcy.