Marić said this is a good signal both to the international and domestic investment, financial and business community
On Wednesday, Finance Minister Zdravko Marić rated that the European Commission recommendation for Croatia to leave the Excess Deficit Procedure (EDP) is a sure indicator that Croatia is on the correct path and that its recommendations have already been largely integrated in the national reform programme, Hina reported on May 24, 2017.
Marić stated that in the last year and a half, the two governments managed to significantly reduce the budget deficit, to less than one-fifth of the deficit in 2013 and 2014, to 2.7 billion kuna or 0.8 percent of GDP, which not only meets EC criteria but surpasses them.
He also cited that public debt has been reduced, nominally and in GDP percentage.
“These were reasons enough for the European Commission to instate this recommendation. The Council’s decision is expected during June. Naturally, we expect everything to be in order,” said Marić and added this is a good signal both to the international and domestic investment, financial and business community and a sure indicator that Croatia is moving in a good direction.
On Monday, the EC recommended for Croatia to leave the EDP based on the assessment of the stability and convergence programme, after marking a decline in both budget deficit and public debt last year. Croatia greatly surpassed that goal in 2016 and reduced the budget deficit to 0.8 percent of the GDP from 3.4 percent in 2015. Croatian public debt also fell for the first time after eight years by 2.5 percent, to 84.2 percent GDP.
Minister Marić did well to remind us of the fact that Croatia has macroeconomic misbalances and has received EC recommendations for this issue.
The recommendations were published as part of the spring package of the European semester, within which the Commission also recommended the closure of the EDP for Croatia and Portugal.
In the first recommendation, somewhat different than last year’s due to the exit from EDP, the Commission demands the continuation of fiscal politics in line with the demands of the preventive section of the Stability and Growth Pact, meaning the maintenance of medium-term budget goals in 2018, as well as increased budget planning and the introduction of real estate tax, based on its value.
The second recommendation pertains to the discouragement of early retirement, the acceleration of the transfer to later retirement, the coordination of retirement provisions of individual categories with the general retirement rules, and in the third, the Commission demands the acceleration of the reform of the educational system and the improvement of the educational system for adults, especially senior workers, the poorly educated and the long-term unemployed. As a fourth recommendation, the Commission cites the reduction of fragmentation, as well as the improvement of the functional division of authority in public administration, in order to increase efficiency and reduce territorial differences in providing public services. In the fifth, among other things, it recommends the acceleration of privatisation of state companies and other state assets, as well as the improvement of corporate management in state companies.
“When viewing the entire set of recommendations, I can say we agree with most of them, not only because we want a good relationship with the EC, but because we have recognised the majority of these recommendations in our national reform programme,” said the Minister.
