PM Zoran Milanovic against kuna devaluation

Internal devaluation is not a good solution, Prime Minister Zoran Milanovic said on Friday in the northern town of Koprivnica, where he attended the 14th meeting of exporters.

"We must see how to be as competitive as possible and sell more goods, because the market is no longer here in Croatia, but in the European Union. Kuna devaluation can't bring many changes, it's just smuggling," Milanovic said, focusing on tourism. "Our goal shouldn't be to have thousands of new hotel rooms for 40 euros. We must target those who can spend."

The meeting brought together about 20 major Croatian exporters who made EUR 1.5 billion in exports last year.

According to the latest data from the national statistical office, exports grew eight percent in 2014 to nearly EUR 10.4 billion, mostly generated by the timber and food industries, Lider's deputy editor Manuela Tasler said.

She recalled that in January 2015 exports fell 7.2%, and imports 15.8%, mainly from outside the EU, saying the figures indicated that export growth encouraged production growth, but also that the export climate was increasingly poor.

Lider editor-in-chief Miodrag Sajatovic said Milanovic was invited to the meeting to find a way, together with entrepreneurs, to help exports. "Export is the best way to raise GDP", he said, adding that it was necessary to carry out swift and effective reforms.

Exporter Ivan Topcic said that instead of shipbuilding, the government should have invested HRK 20 billion in the economy. He said red tape was a big problem and that the government's purpose was not to govern but serve entrepreneurs. "We need someone willing to make decisions which might cost them the election."

Milanovic said shipbuilding was a Croatian tradition but that any state aid to this sector would stop very soon.

Topcic said the public apparatus was too big and that one should not fear laying people off, to which Milanovic replied that he never said there would be no layoffs, only that salaries would not be cut.

Carlsberg Croatia CEO Carsten Haerup Christensen also spoke about slow red tape, while Rasco CEO Frane Franicevic said exporters needed money swiftly when winning big contracts at international tenders, which calls for "a better relationship" with the Croatian Bank for Reconstruction and Development. He said their foreign competitors had excellent interest rates on commercial bank loans, from 1 to 3%, as against 4% or more in Croatia.

(Hina) ha

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