PM says using 2nd pension pillar possible to cut motorways debt

Prime Minister Tihomir Oreskovic said on Tuesday that he would present this year's budget on March 10 and that using the second pension pillar was being considered to reduce the debts of motorways as well as an initial public offering to citizens to invest in them.

Responding to questions from the press, he said it was necessary to create "a positive climate. We have some concrete moves that we can make very quickly and which will impact not only the reduction of the debt but also of interest rates, which have a direct impact on the budget."

Oreskovic said the motorways debt was about EUR 4.5 billion and that enabling citizens to invest in them was a good thing.

Speaking at the "Turning Point Budget" conference, Oreskovic said that in talking to investors over the past month he had said that the government was open for business and that it would do everything to attract investments. He recalled that investors held more than 80 percent of Croatia's debt and that their response was "positive". He said they were waiting for the budget because it would be the first step that would show the government's direction.

He said spreads on Croatian bonds were decreasing, which meant that investors had started buying them, confident that the economy would get kickstarted and that the government would focus on investments and the creation of a positive climate.

Oreskovic said that he briefed the European Commission in Brussels recently about the changes he would introduce to improve the economic climate, and announced that Economic and Monetary Affairs Commissioner Valdis Dombrovskis would visit Croatia on Friday.

Commenting on yesterday's European Bank for Reconstruction and Development summit in London, he said the results of the talks were good. "It's essential to me as prime minister that we start changing the climate. Starting in Brussels and in London, we are convinced that we have set that in motion."

Addressing the conference, he outlined five reform points. "The first is activating half a billion euros of dormant capital owned by the state in order to reduce the public debt." He said the State Property Management Office ran property worth EUR 30 billion, including 1,400-1,500 properties, unused land and should be put to used and 1,300 companies in the public sector.

Oreskovic said the second point was creating a fund for small and medium enterprises worth EUR 500 million. The third is absorbing EUR 10.7 billion from European funds, which he said was an enormous potential, notably in tourism and infrastructure. He said he would appoint a chief integration officer at his office to coordinate work and investment in various economic sectors.

The fourth point is investments. Oreskovic said investors looked for security and a stable tax policy. He said an LNG terminal on Krk island was a strategic project not only for Croatia but Europe too, and that tourism, infrastructure and agriculture were investment opportunities.

The fifth point is the budget, which will reflect reforms in public administration and health care, the PM said, adding that it was necessary to carry out smart changes.

Last update: Tue, 28/06/2016 - 17:51

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