Prime Minister Milanovic: Public companies show best ever results

The business results of public companies are not bad, in fact they have never been better, Prime Minister Zoran Milanovic said on Tuesday at a government conference on the business operations of state owned companies.

"That isn't bad now, it's good," Milanovic said, adding that it in the past 20 years it had not been better even though he claimed that even today things aren't bright. Public companies are changing and there is less room for nepotism, he said.

Speaking about the state's position in managing public companies, he underscored the state's ambivalent role - on the one hand it, as he said, has to behave as a rational owner and reduce costs and staff and on the other, it has to take account of broader social implications of its moves.

The Prime Minister noted that he was generally satisfied with the results and that in future investment projects should be more oriented towards European funds as a source of funding.

He added that Croatia's primary interest as a member of the EU is to take as much as much money from European funds, underscoring that every kuna used for these purposes and taken from taxpayers yet could have been taken from EU funds was in fact stealing from Croatian taxpayers' pockets.

"That's our interest and if need be, we should be selfish and watch out for our own interests, like bankers," Milanovic said, adding that bankers were not concerned about the middle class burdened by loans which means that in the long run that class is lost for any serious consumption.

According to Milanovic the high indebtedness of citizens is a bigger problem than the high public debt.

Deputy Prime Minister and Minister of Regional Development and EU Funds Branko Grcic explained that the gross profit of 47 public companies owned entirely or largely by the state, amounted to HRK 2.72 billion last year which is twice as good as the results for 2013 when that was HRK 587 million.

As far as 22 companies of strategic state interest are concerned, their gross profit in 2014 amounted to HRK 3.8 billion compared with the year before when it was HRK 1.1 billion.

Total investments in public companies in 2014, according to Grcic amounted to HRK 8.4 billion. These investments mostly relate to loans with state guarantees and he warned that in the future fewer state guarantees would be issued, which was why he called on companies to utilise EU funds.

Public companies' total public debt was slightly over HRK 66 billion and of that HRK 45 billion can be attributed to the state-run motorway operators HAC and ARZ, the Croatian road operator (HC) and the Croatian Railways (HZ).

The government's objective, Grcic added, was to make these companies capable of servicing their own debts.

(EUR 1 = HRK 7.6)

(Hina) sp

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