Lalovac and Grcic announce further reforms

Finance Minister Boris Lalovac announced on Thursday that a proposal for strong reforms would be prepared within the next two months and then presented to the European Commission.

"We know we need to step up reforms and, in cooperation with the Prime Minister and the Deputy Prime Minister for Economy, Branko Grcic, we will swiftly take certain steps, which Croatia will present to the European Commission by April," Lalovac said in response to questions from the press before going into a Cabinet meeting.

The European Commission on Wednesday concluded for the second time that Croatia was experiencing excessive macroeconomic imbalances that required resolute political action and specific monitoring.

In May, on the basis of the National Reform Programmes, the Commission will make a decision to activate the Excessive Imbalance Procedure. "In a context of subdued growth, delayed restructuring of firms and dismal performance of employment, risks related to weak competitiveness, large external liabilities and rising public debt coupled with weak public sector governance, have significantly increased," the Commission said in a statement.

Lalovac said that there was always room for action. "Let's allow the Prime Minister and the Deputy Prime Minister to do the job. These are very strong reforms and will be prepared in two months' time," he said.

Responding to a reporter's question whether he felt that whatever he did wasn't enough, the minister said that Croatia was in a deep crisis, in the sixth year of recession, and that any change at this point was difficult.

"It would have been better for that to have been done in the first year of the crisis. Everyone is anxious now, expecting growth, employment and a revival of optimism. It's very difficult to carry out any reforms in the sixth year of recession, but they will have to be made, probably even accelerated. The Prime Minister and his inner Cabinet will decide what these reforms will be," Lalovac said.

Lalovac said that cuts and savings were being made, but noted that the Commission wanted structural reforms to be accelerated. "We must speed them up and we will see in which areas, whether it will be public administration, health or some other segment they want," he said.

The Deputy Prime Minister and Minister of Regional Development and EU Funds, Branko Grcic, said that some reforms had been implemented and that new, revised national reform programmes would be made "based on what we have already done this year."

Grcic said that Croatia had been under the Excessive Imbalance Procedure over the past year and that this was a continuation of that process. "This continues with the preparation of a new reform programme for next year, for the next cycle. We have made certain progress and are focused on the result. Every day we have something that is the result of the work of this government over the last three years and real results will be visible in the months ahead," Grcic told the press before the Cabinet meeting. "That's the best message to all sceptics and something that motivates us to win a second term in office," he said.

(Hina) vm

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