Croatian Government To Urgently Amend Budget

One of the anti-recession measures the government presented is ending the increase of interest rates on loans and defending the currency.

ZAGREB, CROATIA – At Thursday’s  session, the Croatian government presented to the public ten anti-recession measures intervention teams will be in charge of the next ten days. One of the measures are amendments to the budget, which coalition partners will be discuss with the government. Before the government session, Croatian President Stjepan Mesic agreed with these measures, Prime Minister Ivo Sander said, as did the coalition partners. 

Apart from making a decision on budgetary amendments, which should be completed by the second half of March, the government will also work on unburdening the economy with non-taxable

contributions, a measure which has already started being carried out, so the contribution to the Croatian Chamber of Commerce has been reduced by 25 percent. The next anti-recession measures is securing the liquidity of public companies and the private sector. After a meeting with the government, public companies announced it was possible for them to save two billion kuna and the government will order them to reduce the due dates of their debts to the Croatian Bank for Reconstruction and Development to 60 days. Also, public companies will not be allowed to employ any more workers and managers’ salaries will be determined by the success of their business.

The government will also harmonise state subsidy measures with those of the EU system, increasing the financial support companies can receive without any special estimate of the Market Competition Agency from 200,000 to 500,000 euros in three years.

The financial support will mostly be directed towards education, and small and middle-scale companies. The next measure is strengthening the financial position of the Croatian Bank for Reconstruction and Development, for which 400 million euros have been requested of the European and World Investment Bank, in accordance with the assessment that it needed five billion kuna for small and middle-scale entrepreneurship in 2009.

Battling crisis with tourism 

Croatia’s battling tourism should be helped by boosting tourism for a successful season this year, so the Tourism Ministry is drawing up an action plan by March 31, while amendments to the law on public procurement of companies that are using government subsidies would stipulate that they should use Croatian products. The eighth measure is also speeding up the process of giving permits to foreign and domestic investors whose investments exceed ten million euros. The permits will now have to be completed within 45 days.

The government also decided to provide support to the real-estate market by allowing 13,000 unsold flats to be sold under reduced interest rates and reduced prices, which would begin a new construction cycle and along with it the production in cement and brick companies.

The government is yet to decide how to subsidise interest rates on loans for the purchase of people’s first flats. The government also decided that inspection controls would be boosted in customs to prevent the import of trash goods into Croatia.