Minister Maric Responds to Questions on Budget, Tax, Raising Minimum Wage

Lauren Simmonds

Finance Minister Maric spoke for Dnevnik HRT about the budget, the economic situation in the rapidly approaching autumn, money for Croatia from the European Union and other topics.

As Poslovni Dnevnik writes on the 1st of August, 2020, the Croatian Government projected a budget deficit of 25 billion kuna and when asked what the latest data was and whether the forecasts would be in those dimensions, Minister Maric said that Croatia had achieved practically all of its financing needs with well-known programmes, reports HRT.

“Our needs, owing to the coronavirus pandemic, have increased from 30.5 billion kuna to 64 billion kuna. In circumstances such as the ones we’re currently in, we can state with satisfaction that we’ve fulfilled all of our obligations for financing in 2020, Minister Maric emphasised. When asked how much the interest rates were in line with the expectations, Maric said that the seven-year bonds, at 0.75 percent, were on good terms.

”The two billion euros that followed in the international financial market mark one of the highest quality bonds we’ve issued in the international financial market on the investor interest book itself at 1.5 percent for 11 years, and these latest data refer sto maturities of 12-14 , 5 years, and the interest rates are between 0.25 and 0.50 percent. I think that these are good conditions in the given circumstances,” Minister Maric emphasised.

A 9.4 percent drop is forecast for this year. In a month, the Croatian Government will come out with new projections based on all the information we have. Maric said that all the measures that were put into operation from the first day were aimed at preserving liquidity and preserving jobs.

“We’ve amortised that first wave in an adequate way, but there are still days ahead of us and the Government will follow the epidemiological picture and continue to do everything to continue the trend of preserving jobs and to start the recovery as soon as possible,” said Minister Maric.

Maric said that challenges exist and that Croatia as a country must learn to deal with them, as it did in the first wave of the pandemic. 750 billion euros from EU funds is a great chance for Croatia, but also for the entire EU economy, and it is an opportunity to make a step forward for the domestic economy, but also for society as a whole, Zdravko Maric pointed out.

“Informal and formal consultations with the Commission and other relevant bodies on the programme will start in October. In April, all countries, including Croatia, are obliged to send a National Recovery Plan and in it, among other things, define both structural reforms and investment activities that should be the key determinants of spending and absorption of the part [of the money] related to the recovery plan and resilience,” he said.

He pointed out that the basic idea at the national level is to create the necessary preconditions for the quality implementation of several strong and recognisable projects, and also not neglect balanced regional development as one of the postulates of the Republic of Croatia.

“As far as the private economy is concerned, we want to make the most of EU funds, so that they reach those who are key drivers of our economy and investments in an adequate way, either in the form of grants or in the form of quality loans,” he stressed.

When asked when the minimum wage can be expected to increase and taxes to be reduced, Minister Maric said that work would begin on that after the summer break.

“As Minister of Finance, I advocate the maximum responsibility for taxpayers, which we’ve done in the past four years, and return to the path of a balanced budget as soon as possible,” he said, adding that in parallel there will be greater absorption from the recovery fund.

He pointed out that the details will be known in autumn.

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