State budget

Opposition against 2011 draft budget

16.11.2010 u 22:53

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Opposition parties in the Croatian parliament on Tuesday criticised the government's draft budget for 2011, saying that it was not development-oriented, that it was harmful and pushed the country further into the crisis.

Branko Grcic of the Social Democratic Party (SDP) said the draft budget was unsatisfactory, both in terms of economic recovery and in terms of fiscal consolidation.

He said that the structure of budget expenses for 2011 would not contribute to economic growth because funds would be spent on current expenses instead of on capital investments and pro-active measures.

Grcic said he was confident that the government's policy had led to the high deficit and fast-growing public debt.

"We would welcome a budget that would make savings in current expenses and increase pro-active measures defined in the programme for economic recovery, but unfortunately, you have to admit that they have not been implemented either at the desired pace or to the extent that would result in a more significant impact on economic growth," Grcic said.

Vesna Pusic of the Croatian People's Party / Croatian Pensioners' Party (HNS/HSU) said she could not understand a government that was calling on the opposition to endorse a budget envisaging revenues of HRK 108 billion and expenses of HRK 122 billion.

"That is unacceptable. Ask anyone... if they can plan a budget in such a way to envisage revenues of 108 billion and expenses of 122 billion. It's impossible," she said.

She asked the ruling HDZ party how in the period from 2008 to 2010 the budget deficit had increased by HRK 14 billion and how it was possible for the projected budget surplus of one billion kuna for 2009 to change into a deficit of HRK 14 billion.

Pusic also objected that the government was giving promises, without any grounds, that Croatia would draw billions of euros from EU funds, adding that instead of drawing EUR 16.2 billion, which was how much it could potentially draw, Croatia could end up losing at least EUR 2.2 billion.

Finance Minister Ivan Suker dismissed her claims, saying that all relevant international economic institutions in 2008 had the same projections as the Croatian government, made on the basis of available macroeconomic indicators.

He added that the 2008 budget deficit, before the start of the economic crisis, was 0.8 percent.

"We can outsmart one another all we like, but the fact is that budget revenues have dropped to the 2007 level, while the spending on budgetary users is unfortunately at the 2010 level," Suker said.

Dismissing Pusic's criticism that Croatia was not prepared for drawing money from EU pre-accession funds, Suker said that 92 percent of such transactions had already been agreed.

Damir Kajin of the Istrian Democratic Party (IDS) objected to the fact that next year's budget was being adopted in November and that it was being discussed only one day after being introduced by the government, which he said was due to the government's fear that some former and current HDZ deputies could topple the parliamentary majority.

Croatians don't need warnings from the European Central Bank to know that the country is heading for disaster, regardless of the government's messages that the country is on the way to overcoming the crisis, Kajin said.

"I'm afraid we are a couple of years away from a collapse," he said.

Dinko Buric of the regional HDSSB party said the draft budget was unacceptable both regionally and nationally.

He said the budget envisaged by far the least funds for the regions of Slavonia and Baranja, objecting to the fact that it envisaged cuts in funds for the Health Ministry, war veterans and war victims, while providing more funds for the Office for the National Minorities and some predominantly Serb communities.