Additional measures to account for 0.63% of GDP, deputy PM says

The government is proposing additional measures to the European Commission which will fiscally amount to 0.634 percent of gross domestic product, although the Commission demands 0.4%, Deputy Prime Minister and Regional Development and EU Funds Minister Branko Grcic said on Monday.

We have to send the additional measures as part of the Excessive Deficit Procedure (EDP) to the Commission and they will be evaluated as of April 21, and in the coming days we will finalise a national reform programme, thereby completing the whole process within the EDP, Grcic told a press conference, presenting the measures together with Finance Minister Boris Lalovac.

Grcic said the government was proposing a bigger "financial effort" than demanded by the Commission because the Commission might have reservations about some measures such as the additional drawing of public companies' profits.

The measures on the budget's expenditures side are expected to amount to 0.34% of GDP or HRK 1.12 billion, while on the revenues side, the impact would amount to HRK 970 million or 0.294% of GDP.

Grcic said the government would propose limits within the budget, such as material costs, subventions and other procurements, totalling HRK 463 million, and additional cuts in extra-budgetary beneficiaries, such as the water and road operators, the Environmental Protection Fund and the Health Insurance Fund, totalling HRK 407 million.

Measures will also be proposed to reduce the deficit of public companies this year, that of the HZ Infrastruktura rail company by HRK 200 million and that of the HAC motorway operator by HRK 50 million. Grcic said the government was also working on measures to restructure public companies in 2016-18.

Excise on oil products and cigarettes is expected to bring an additional HRK 370 million this year, and an additional HRK 600 million will be taken from the profits of strategic companies, as a result of which this year's profit revenue of public companies would be HRK 1.6 billion, Grcic said.

He said the government would also further reduce parafiscal levies by HRK 330 million.

A decision on merging at least ten state agencies is "at a high stage" and the government will also cut state agencies' material costs as well adopt measures on salaries in independent agencies, Grcic said.

Lalovac announced the introduction of standards in material costs, saying a lease should not exceed 11 euros per square metres. He also announced reducing official travel costs and the use of official vehicles, which would result in savings of half a billion kuna.

(EUR 1 = HRK 7.6)

(Hina) ha

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