Conference on Budget Management and Fiscal Policy

A 2-day Conference on Budget Management and Fiscal Policy, supported by the project "Improving Budget Processes", funded under EU PHARE 2006 and implemented by the Ministry of Finance and Human Dynamics, was held on the 4th and the 5th of October.

A 2-day Conference on Budget Management and Fiscal Policy, supported by the project "Improving Budget Processes", funded under EU PHARE 2006 and implemented by the Ministry of Finance and Human Dynamics, was held on the 4th and the 5th of October.

Ambassador Paul Vandoren, Head of the EU Delegation in Croatia and Mr. Ivan Šuker, Deputy Prime Minister and the Minister of Finance of the Republic of Croatia, welcomed the participants at the Conference. They emphasized the fact that new approaches to public financial management have become an imperative in these economic times, and that this Conference provided an opportunity for a core of Croatian and EU experts to come together to share their experiences related to budget management and fiscal policy.

The representatives of the Ministry of Finance of Croatia gave an overview of the changes underway in the Croatian public finance system and budget management in the course of the accession process and adoption of EU best practices. Special emphasis was placed on improvements and modernization of the State Treasury and its information systems, as well as on the activities planned. Croatian speakers underlined that the current improvements should not be seen as isolated technical activities, but rather as a crucial precondition for high-quality decisions in the process of budget fund allocation.

The representatives from EU member states shared their experiences related to budget management, including the Dutch approach to Program Budgeting, Budget Execution and Cash Management in Austria, and Budget Management and Cohesion Policy in Ireland. These discussions would result in concrete ideas which can be implemented in the Croatian budget management process.

The second day of the Conference focused on the appropriate fiscal policy choices which must be made against the backdrop of the recent economic crisis that has derailed budget balances in nearly all European countries.

The representatives of the Ministry of Finance stated that effective budget management is one of the prerequisites for the effective management of public finance in a time of global economic crisis and financial limitation, when fiscal policy is focused on strengthening the system, in order to achieve budget sustainability, while also balancing economic incentives and social cohesion. During the period in which the Croatian economy is still recovering, the tendency to balance budget revenues and expenditures is the main theme of fiscal policy.

Also, a discussion was held on Fiscal Policy and Sustainability in Central and Eastern Europe, as well as a review of HM Treasury's activities to support Fiscal Discipline in the UK. This was followed by a presentation on Fiscal and Monetary Institutions in Central and South-Eastern Europe, made by a representative of the OECD. These sessions provided concrete ideas that can be adjusted to Croatia's unique needs, regarding greater fiscal discipline, as well as suggestions for the strengthening of fiscal policy that would enable continued economic growth.