FinMin: Interest in state property privatisation 'more than welcome'

Finance Minister Zdravko Maric said on Friday the interest by some domestic companies and pension funds in the privatisation of several state-owned companies was more than welcome and that he expected the business community to approve of the privatisation, despite political resistance.

He was speaking to reporters as part of the New Europe Business Forum, organised by the Zagreb School of Economics and Management. Commenting on criticisms of the announced privatisation, he said "there will always be opposition to any reform."

The government wants to send a clear message that, aside from fiscal consolidation and the lowest deficit since the pre-recession period, the activation and privatisation of state property will make the biggest contribution to the stabilisation of debt-to-GDP ratio already this year, Maric said, adding that this was an important message for the rating agencies, international and domestic investors and entrepreneurs.

Commenting on media reports that the government ignored banks' invitation to a meeting before they launched arbitration proceedings over the conversion of Swiss franc loans, he said talks with the banks would continue and reiterated that there was no official information that those proceedings would be launched. He added that 94 percent of those loans had been converted and that going back was not possible, reiterating that the European Commission had requested explanations regarding certain aspects of the loan conversion law.

Maric said he expected to meet with representatives of the rating agencies soon and that the government would do its best to assure them that the National Reform Programme and the Convergence Plan would be implemented in order to stabilise Croatia's credit rating outlook this year.

The rating is currently two notches below the investment level, with a negative outlook for some time now. "We will be very active and not only defend our positions, but try to explain that these aren't just a plan and a programme, but that they have genuine political support," Maric said.

He said the government would tackle the public debt through stronger economic growth, a lower fiscal deficit, and the further activation of state properties so that they can "raise the value of a whole microregion, which has both a medium and a long term component in value creation."

He said a tax reform draft was expected by the middle of the year so that it could go into force on 1 January 2017. "A tax reform is necessary because the system is... complex and does not deliver as it should. We want to make it simpler, more efficient and more stimulating."

After six years of recession, the tax base is markedly smaller and the government cannot think about raising taxes but about how to expand the tax base, create conditions for reducing the tax burden and stimulating businesses as well as citizens, Maric said.

He said the reform would tackle the entire system, including the highest income tax rate, the profit tax, excises, the introduction of a property tax, reducing VAT in tourism and agriculture.

Last update: Fri, 20/05/2016 - 14:39


Fin Min: The key is to upgrade credit rating


Tuesday, April 5, 2016 - 13:09

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