Minister Linić says gov't can give clear signals to prevent drop in credit rating

Despite poor forecasts, there will be no drop in Croatia's credit rating if the government manages to send a clear message that it will launch efficient state investments to revive economic growth, reducing at the same time public spending and the budget deficit, Finance Minister Slavko Linic said on Tuesday.

We should leave it to Prime Minister Zoran Milanovic to show with which investments we can be efficient this year and reverse negative trends, Linic said after the signing of an agreement on the funding of projects in the area of environmental protection at the Finance Ministry.

Efficient state investments in the energy industry - power production, transmission and distribution, alternative energy sources and transport, notably investments in the Croatian Railway's (HZ) infrastructure and passenger transport - are expected to show that economic growth in 2012 is possible, Linic said.

On the other hand, the new state budget should show that we can be efficient in reducing public spending and that we will manage the deficit, Linic said.

If in that way we prove to be able to convince domestic and foreign investors and credit rating agencies, the current poor forecasts should not affect Croatia's credit rating, Linic said.

He again underlined the importance of adopting a new law on financial operations, saying that the case of the Dioki company, which has not been operating due to a blockade of its bank accounts for more than six months, showed that talks between the state and the biggest creditors, in this case banks, frequently took too long.

Once a new law on financial operations is adopted, such cases will be dealt with within precisely defined deadlines, said Linic.

 

(HINA)



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