Three-Month Lockdown Will Make Croatia Borrow up to 10 Billion

Total Croatia News

ZAGREB, April 5, 2020 – The Croatian authorities will have to borrow HRK 75 billion as consequence of three months of lockdown caused by the coronavirus epidemic, and there is enough money on the market, however, it remains to be seen under what terms and conditions the money can be borrowed, the Večernji List said on Sunday.

The Finance Ministry has already taken the first six billion out of 65 billion kuna necessary for the essential functioning of the state in the next three months.

Those 65 billion include the repayment of 20 billion kuna of previous debts plus outlays for monthly wages, pension allowances, social welfare, higher costs in the healthcare system and other public services on the frontline in the fight against the coronavirus infection, the daily newspaper said.

Finance Minister Zdravko Marić said in an interview which the daily published on Saturday that those 65 billion kuna account for 45% of the projected budget for 2020.

Those are high amounts and the sources for the so-called corona credit arrangements will be first sought on the domestic market, through negotiations with banks operating in Croatia, and also the authorities are likely to tap some of the available funds held by the pension and investment funds, according to the daily.

Although 65 billion kuna already seems a huge amount, analyst Željko Lovrinčević of the Institute of Economics in Zagreb told the newspaper that an additional 10 billion kuna should be added to cover the needs of public companies and the authorities at the local level.

Lovrinčević said that Croatia could count on tapping more than a billion euros from the European Union funds in the said period.

More economic news can be found in the Business section.


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