Creditors Urge Croatia to Curb Public Debt

Croatia's new government must tackle growing public debt and maintain the independence of the central bank, Croatia's creditors and potential investors - taking part in the South-Eastern Europe investment conference in Kitzbuhel in Austria last Thursday and Friday - have agreed.

Croatian Prime Minister-designate Tihomir Oreskovic participated in the conference organised by the Italian bank group Unicredit Group, owner of the biggest bank in Croatia, Zagreb Bank.

Oreskovic will soon have to decide on candidates for future ministers proposed by the centre-right Patriotic Coalition and by its partner in government, the Bridge of the Independent Lists, MOST.

Unicredit's chief economic analyst, Erik Nielsen, told Croatian Radio-Television, HRT, on Sunday that Oreskovic left an impression "of a man that wishes to do business.

"Investors have requested him to show concrete measures on reducing the growth of the public debt. Investors are looking for signs and measures that will lead to that. During the [economic] crisis it has almost doubled," he said.

Nielsen also added that the new government should not undermine the independence of the Croatian national bank, HNB, in leading monetary policy.

Damir Novotny, an economic expert, told BIRN that these recommendations match those made earlier by the European Commission and by the World Bank.

"Unicredit's analyst is calling upon these recommendations, emphasizing the independence of the HNB, because Unicredit is a big creditor to Croatia," he said.

Novotny added that the government has to follow measures to slow growth in public debt, as set by the Commission's excessive deficit procedure, or risk a "Greek scenario" in which banks stop lending to the government,...