Finance Minister Boris Lalovac said on Wednesday that when it came to managing public debt, he was for privatising everything that could be privatised and liquidating everything that was ripe for a write-off.
The next government’s main task should be clearing out the state portfolio, privatising everything that can be privatised and liquidating everything that is ripe for a write-off, he said at a panel on fiscal policy, public debt and economic growth as part of an economic forum organised by the American Chamber of Commerce and Forbes magazine.
Lalovac said public enterprises were the main generators of public debt growth. He recalled that the government often had to bail out some institutions, such as the Croatian Postal Bank, and said that shipyards would never have been privatised had the government not taken on their HRK 9 billion debt.
We have privatised plenty of the portfolio and liquidated plenty. It’s unpopular but necessary, he said.
Asked about the optimal government budget, he would not answer, saying the biggest problem was the huge deficit generated by the pension system, HRK 18 billion annually.
Speaking of how to balance the budget to avoid excessive borrowing and achieve economic growth, Lalovac said “deeper” work was necessary on budgetary expenditures. If revenues exceed expectations, they should be used to cover the deficit, he added.
PricewaterhouseCoopers Hrvatska CEO Hrvoje Zgombic said the government had missed the opportunity to manage public debt well and that expenditures would have to be drastically slashed.
The head of the World Bank’s Croatian office, Carlos Pinerua, said everyone was focused too much on the debt and financing, and too little on job creation.
US Ambassador Julieta Valls Noyes said the US remained committed to the Transatlantic Trade and Investment Partnership with the European Union, which could help Croatia in a number of ways and on a number of fronts.
(EUR 1 = HRK 7.6)