Zoran Milanović (DVP): Plans are necessary, but the question is how many will be realized

President of the Republic Zoran Milanović stated that an uncertain autumn awaits us, as well as the next year, because it is difficult to predict the development of events in the world. Although he said this at the 14th conference ‘Day of Great Plans’ organized by the business weekly Lider, he warned that everyone who makes plans for the upcoming period, especially long-term ones, must take into account that all previous forecasts have fallen through. Admittedly, he acknowledged, bankers cannot do without forecasts as they would be working ‘in the dark’, institutions, organizations, companies, and states must have plans, but it is very questionable to what extent they will be realized.

– From experience, we know that forecasts are generally inaccurate. Who could have assumed that after the financial crisis of 2008, interest rates would be this low? When I was Prime Minister, Croatia was borrowing seven percent annually from credit institutions. In recent years, it has been at three percent or less, which is historically a low level – said Milanović.

He also recalled the recent example of the ruble, which was predicted to decline in value, but that currency is more stable than it was before the war. No one predicted this, Milanović reminded and cited a number of other examples, such as the stability of the Czech and Polish currencies despite inflation (these countries did not want to adopt the euro), although there were also different forecasts.

– If the ruble had fallen, the consequences would have been enormous as it would negatively affect Putin’s power – said Milanović.

He also spoke about the euro, which Croatia will introduce next year. Although he spoke about how forecasts rarely come true, he confidently announced that the euro will be beneficial for us because our economy is service-based and depends on the volatility of Europe, which is currently good.

Milanović emphasized that the benefits of introducing the euro were once enjoyed by Germany, the Netherlands, and partially Belgium and Austria.

– We can stop here. Everyone else is where they were and struggling. All others, who had high growth rates naturally or unnaturally before the introduction of the euro, for a moment it seemed as if they had reached the German or Austrian level, but with the introduction of the euro, they went down – stated Milanović, adding that it is a big question whether the introduction of the euro was beneficial for other countries.

He assessed that for Croatia, being a member of the EU for nine years is a good thing, but that the state has an annual average gain in interaction with the EU, in terms of how much the EU has to give and how much is returned, only five billion kuna.

He asked how much we would otherwise have if we were not in the EU, emphasizing that from customs alone, we would now be receiving at least three billion kuna. Namely, as he said, in 2012, Croatia independently collected 1.8 billion kuna in customs revenue.

– So only two billion kuna remains, that is helicopter money that is thrown into Croatian agriculture – he asserted.

However, he hopes that the euro will be a good friend to us, especially since the domestic economy is based on service – tourism activities, and for decades, as he said, Croatian tourism has been doing well. He also noted that some countries that are in the EU but have not adopted the euro are now in big trouble.

Reflecting on inflation, he said it is a dangerous disease that must be fought with all possible democratic-monetary means.

The President of the Republic called on the conference participants, but also everyone in Croatia, to plan, but to remain vigilant.