If Croatia continues to pursue the responsible and transparent policy, the country will avoid the situation in which Portugal and Spain found themselves, and Zagreb can look forward to abrogation of the Excessive Deficit Procedure (EDP) in the foreseeable time, Croatia's Finance Minister Zdravko Maric said in Brussels on Tuesday.
"We will perhaps not only halt but also reverse the protracted negative trend of a growing public debt this year," Maric said after attending an EU meeting of member-states' finance ministers.
"If Croatia continues pursuing this responsible and transparent fiscal policy, we can in the foreseeable time, perhaps in the next 12 months, leave the EDP procedure provided that we are sufficiently resolute and successful in the implementation of this year's budget," Maric said.
The EDP operationalises the limits on the budget deficit and public debt given by the thresholds of 3% of deficit to GDP and 60% of debt to GDP not diminishing at a satisfactory pace.
The euroarea finance ministers on Tuesday adopted an official conclusion that Portugal and Spain failed to effective action to curtailment the excessive budget deficit. A 20-day deadline started running for the imposition of financial penalties by the Commission.
As for a possibility for the Commission to launch procedure against Croatia over the conversion of the Swiss franc-pegged loans into euro loans, Maric said that Croatia would provide Brussels with its response in a timely fashion.
The Croatian public will be also notified of our answer on time, he added.
In mid-June, the Commission sent a formal letter with a warning regarding the legislation that enabled the conversion of the above-mentioned loans , being of the opinion that the country's loan conversion law had shifted all of the conversion costs onto banks and that its retroactive application jeopardised the principle of legal security.
The letter with formal warning is the first step the Commission can take in a procedure taken when a member-states is believed to have violated the European law.
If the country fails to reply to the letter or fails to provide a satisfactory explanation in its reply, the EC takes the second step, namely a substantiated opinion. If after that there is still no satisfactory response, the EC may approach the Court of the EU.