Grcic says there's suggestion to put HBOR under supervision

Croatian Regional Development and EU Funds Minister Branko Grcic confirmed on Friday that there was a suggestion to introduce supervision of operations of the Croatian Reconstruction and Development Bank (HBOR), noting that the government wanted the HBOR to remain a development bank.

Grcic made the statement while speaking at a round table on business in Split, when asked by the event's moderator if the HBOR's credit policy would be changed in light of rumours from Brussels that the HBOR could be put under the Croatian National Bank's (HNB) control.

The government would like the HBOR to remain a development bank, meaning that when it receives requests from business people "it acts more flexibly and the state assumes, indirectly through the HBOR, some of the risks of those business people, particularly now that we are in a crisis."

"The HBOR operates by adhering strictly to clearly defined procedures, which often slows down a project or halts it," said Grcic.

Asked if it was realistic to expect the country's economy to grow solely on the basis of money from EU funds, Grcic said that EU funds were an important source of economic growth.

"All countries that used EU funds well had economic growth 0.8-2% higher than without those funds."

Grcic repeated that in the first four months of this year the budget deficit had been cut by 2.5 billion kuna.

"Also, in the first four months we increased VAT revenues by 1.5 billion kuna, which are huge funds."

Grcic also said that at the start of the year the government stopped "the extreme downfall of the construction sector" that had been going on for years.

"At the start of this year the value of construction permits issued was between 300% and 400% higher, which is evidence that the extreme downfall of the construction sector has been stopped."

(Hina) rml

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