Finance Minister says that Croatia now has the political stability necessary for the implementation of economic reforms.
As far as the EU’s excessive deficit procedure is concerned, Croatia has fulfilled the recommendations, and when it comes to the procedure for correcting macroeconomic imbalances, unlike last year, this year there is political stability in the country which is a necessary precondition for the implementation of reforms, said on Friday in Brussels Croatian Finance Minister Zdravko Marić.
Minister Marić, who was in Brussels for a meeting of EU finance ministers, did not want to speculate when Croatia could formally leave the excessive deficit procedure, but added that his opinion was that it had fulfilled all the recommendations. “We have delivered results which are really good”, said the Minister, noting that the deficit in 2016 was even lower than the European Commission's recommendations, and that this the reduction of deficit and public debt would continue.
As for macroeconomic imbalances, Croatia will “addressed this issue in a comprehensive document, the National Reform Programme which should be sent to the European Commission in April”, said Marić. “Unlike last year, when we did not have the element of political stability in order to move with the implementation of reforms, this year I expect us to be much more successful in this segment. All these reforms which are expected by the European Commission are reforms which are necessary to be done for our own sake as well”, said the Finance Minister.
Croatia entered the excessive deficit procedure in the first year of its EU membership. According to EU rules, the budget deficit should not be higher than 3 percent of GDP and the public debt should be under 60 percent of GDP. However, the conditions do not take into account just nominal indicators but also trends. Therefore, if Croatia continues with the reduction of public debt, it can expect to leave the procedure, even though the public debt will be above 60 percent of GDP for years to come.
The European Commission last year included Croatia among 13 member countries for which it was needed to implement in-depth analysis to determine whether there are macroeconomic imbalances. The Commission will publish the results of the analysis next month.
Marić also spoke about other topics discussed at the meeting, including the idea to implement a reform of the financing of the European Union, which was presented by the head of the working group, former Italian Prime Minister Mario Monti. The proposal is for the European budget to be filled mostly by direct taxes, instead of indirect contributions of EU member states, as is now the case.
“We have supported the idea that the system of financing should be simpler and more transparent”, said Marić.
