PM says Croatia getting close to primary surplus

Prime Minister Zoran Milanovic said on Wednesday that a set of reforms which Zagreb was due to show to the European Commission by the end of April had not yet been finalised, however, he underscored his cabinet's commitment to reduction of deficit and public spending, as a result of which the government budget was close to a primary surplus.

In late February, the European Commission concluded for the second straight year that Croatia was experiencing excessive macroeconomic imbalances that required resolute political action and specific monitoring. The EC sets out different stages of imbalances, and Croatia was put into stage 5, with a possibility to be moved into stage 6, and a decision on the activation of the Excessive Imbalance Procedure will be taken in May after assessment of the National Reform Programme and other relevant documents. If the EC finds that Croatia's National Reform Programme, which should be forwarded to Brussels by the end of April, does not guarantee the correction of the excessive imbalances, it will opt for activating the Excessive Imbalance Procedure.

Asked by reporters in Jastrebarsko, where he attended the opening of the Kaufland logistics centre, whether his government had prepared the required programme, the premier said that the document had not yet been finalised.

"Croatia's deficit is slightly excessive. I will request that Croatia should be treated in the same way as other countries that have been in these processes for years. I am afraid of nothing, we are doing our job, reducing the deficit, curtailing public spending, and almost the whole deficit is actually the sum necessary to pay interest, so we are close to a primary budget surplus," Milanovic said.

Milanovic said that the budget deficit was not caused by financing new costs, and Croatia was undergoing deleveraging.

(Hina) ms

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