Finding a Way Out of the Vicious Circle of Politics and Economy

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Some economists say that people are leaving because of the chaos, and not because of the lack of jobs.

According to economists, Croatia has been running in circles for 20 years, electing wrong political leaderships, which has resulted in the creation of a political elite that does not lead the country in a good and organized way. Therefore, after the economic crisis, Croatia has faced an even more difficult one – a societal crisis that is causing families to leave the country, reports Večernji List on May 24, 2016.

In the meantime, the most painful measure required by EU is related to early retirement and property taxes. Property taxes will become another burden for the already impoverished society. People will start selling their real estate and the prices will drop sharply, while the early retirement represents a problem in a country where 300,000 people have not been working for years. In the meanwhile, Croatian politicians are forgetting that demographics is a key issue, as in several years there will be no one to work in Croatia while the pressure on the pension system will become even stronger.

These were the main problems emphasized by Croatian economists gathered this past weekend in Opatija. Ljubo Jurčić, professor at the Faculty of Economy in Zagreb, said that the biggest asset of any country is a capable government, and Croatia does not have that. “The current crisis is not an economic or financial one, but the crisis of the society and this is why people are leaving. We have resources that allow twice as high incomes than the current ones, but we do not have the government or policies for implementation”, said Jurčić. It is embarrassing how little this country has changed, Željko Lovrinčević from the Institute of Economics agreed.

Some of the European Commission measures include increasing the retirement age, accelerating privatisation and introducing the property tax. Although some economists believe that this will be disastrous for the country, there seems to be no other way at this point. The main economist of the Hypo Alpe Adria Bank Hrvoje Stojić said that the introduction of property taxes would create enough space for the reduction of the taxes on labour and on capital. The government is also thinking this way, which was confirmed by the Deputy Minister of Finance Saša Drezgić. He is also an optimist when it comes to economic growth in the upcoming years because he is expecting more investments.


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