“The city cannot owe more than 20% of its revenue, that is a gross lie the mayor said in the City Assembly,” Kojić, a former long-lasting head of the city’s finance department during Bandić’s term, claimed at a news conference.
He went on to say that the city could not have borrowed an amount exceeding 20% of its revenue because borrowing was conditional on the Finance Ministry’s consent.
The 20% limit does not refer to the total debt but to the debt due for payment in a given year, he said.
Kojić recalled that at its last session the City Assembly made a decision to borrow HRK 336 million, adding that had the 20% limit been exceeded, the Finance Ministry would not have approved the new borrowing.
He noted that the Standard&Poor’s rating agency would not have changed Zagreb’s credit rating of BB- to one with a stable instead of negative outlook if Zagreb’s debt amounted to 100% of its revenue.
Measuring the debt of the city public transportation company ZET, the multiutility conglomerate Zagreb Holding and the City of Zagreb against the revenue or budget of only one of them, in this case, the City of Zagreb, without taking into account budget users, is ridiculous, said Kojić.
He noted that data on ZET’s debt in the amount of HRK 900 million, Zagreb Holding’s debt of HRK 4.9 billion and the City of Zagreb’s debt of around HRK 2.4 billion did not depart significantly from what had been published in the spring.
Kojić admitted that the problem of the capital city’s finances was not small and that the former city administration had “many sins” but that the main cause of the problem was legislative changes due to which Zagreb had been shortchanged by more than seven billion kuna over a period of six years.
