Lovrinović: It’s a pity that Most didn’t appear 10 years ago – now everyone is for reforms

Most and SDP negotiated on Monday regarding finance, budget, and tax policy.

Most’s negotiator Ivan Lovrinović reported after the meeting that they agreed on the need for better control of public debt and stronger cooperation between the Croatian National Bank, and he denied that he personally advocated for the devaluation of the kuna.

– No devaluation is on the table, and no serious economist in Croatia advocates for devaluation.

He also assured citizens that there is no talk of abolishing foreign currency savings and that their deposits are safe. He reported that Most advocates for combining tax policy with monetary policy, for further tax relief on income, and for stimulating entrepreneurs through the non-taxation of reinvested profits.

– Essentially, the aim is to finally align the actions of monetary and fiscal policy because one has been going through the woods, while the other has been on the road. Most insists that this coordination finally happens, to make everything more transparent and responsible.

When asked what impression the negotiations with SDP left on him, he said that Most is impressed by the willingness of the two major coalitions to reform.

– It is a pity that Most did not appear eight or 10 years ago because everyone is quickly agreeing to reforms and changes, he said.

In response to the remark that contradictory ideas can be heard from Most, such as drastic tax cuts and simultaneous increases in subsidies in agriculture, Lovrinović replied that “it is not unusual if some minor issues or misunderstandings arise.”

– However, there is no talk of any additional tax burdens; we will work on relief, and all previous subsidies will be revised. What has proven effective will remain, while models that do not will not function. The state is in a difficult situation, and any waste of money is unacceptable, he stated.

He also mentioned that a special department for managing public debt should be established, assessing that it is incredible that Croatia does not have a clear debt management policy. He is convinced that it is necessary to urgently open a public debate on the pension system and the position of the second pillar.

Finance Minister Boris Lalovac stated that the emphasis of the meeting was also on monetary policy and that the SDP coalition agrees with Most that they would like to see more housing loans in kunas in the future. He noted that commercial banks currently offer kunas at a more favorable interest rate than euros and reported that discussions were held about the problems faced by those indebted in Swiss francs, which, he says, partly arise from very high interest rates in euros.

– We touched on the issue of very low EURIBOR and currently high interest rates and the supervision of the Croatian National Bank, that there should be much better cooperation between the Ministry of Finance, i.e., the Government and the Croatian National Bank in addressing such issues, and certainly that the monetary authority in the coming years should think about how to release a certain amount of kunas into the market, said Lalovac, emphasizing that this would stabilize the income of Croatian citizens.

He also agrees that changes are necessary in monitoring the deficit, i.e., including public enterprises in the structure of the deficit and public debt for better management of public finances.