Croatian government ministers on Friday dismissed criticisms that the government could not manage public finances properly and was borrowing money outside what was planned, saying that borrowing was necessary in order to refinance debts incurred in previous years.
Speaking to the press before this year's first Cabinet meeting, Finance Minister Slavko Linic told the press that such assessments were made by people "who know very little about finances." He made the statement when asked for a comment on an analysis by the Institute of Public Finance (IJF), which says that the government does not have a strategy for borrowing and public debt management as shown by its last two sessions held last year, one of which was a telephone conference, when it decided to borrow a total of 4 billion kuna (525 million euros).
Linic said that the IJF experts had not specified what the government was supposed to do, for example, with the Croatian motorways and the Rijeka-Zagreb motorway. "Those loans should be repaid and they are being repaid by citizens of Croatia, but I haven't heard the experts' opinion on that. Also, the restructuring of the railways is ten years late, so let them explain to me why they have been sleeping for the last ten years."
"The debts are being repaid from the state budget and that's why we are borrowing. We have been doing so for the last two years and I would like to see a little bit more seriousness here," Linic said, adding that short-term borrowing was a matter for the finance minister to deal with, while "experts should focus on our debts and how to deal with them."
Linic said that he would like to hear what experts thought of monetising or leasing the motorways. "Unfortunately, I haven't heard them. They are obviously afraid of citizens and are hiding their opinions and expertise," he concluded.
The Deputy Prime Minister and Minister of Regional Development and EU Funds, Branko Grcic, said that Croatia needed 50-55 billion kuna this year to refinance its debts, which is why it needed to have "a wide range of potential sources of funding to finance and refinance its debts."
"The amount being mentioned (4 billion kuna) is less than 10% of the total amount of refinancing and is being used to refinance something that was incurred in previous years. The government has to use all sources available to ensure that," Grcic said.
Enterprise Minister Gordan Maras also rejected the criticisms from the IJF analysis, saying that the government knew very well how to manage the deficit and public finances in the coming years. He said that the borrowing was necessary and was within the budget.
The IFJ said in its analysis, published on Thursday, that the government did not have a strategy for public debt management and urged the government to ensure fiscal risk management. It said that as a result of four of the decisions made by the government at its last two sessions the public debt had increased by about 4 billion kuna.
Financial transactions with which the government is trying to find sources of financing will not go unnoticed by the European Commission and will be registered during the excessive deficit procedure, the IFJ said.
(Hina)
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