MOST unveils details of proposed monetary, fiscal, education and science policies

In its 14 guidelines for negotiations on the monetary and fiscal policy, the reformist Bridge (MOST) party calls for public debt management, a public debate on the pension system, especially on the second pension pillar, and a law clearly defining the transparency and responsibilities of the central bank.

The party says that a public debt management policy is necessary given the complexity of the situation and its impact on all other areas. The purpose of a public debate on the pension system is to address the state of the pension system, while the Croatian National Bank (HNB) Act should be amended to organise the central bank in accordance with the tested models of the European Central Bank so as to ensure more effective and transparent functioning of the HNB.

The 14 main activities also include establishment of a National Economic Council that would design macroeconomic models and provide guidelines for the management of the monetary and fiscal system, for the design of a macroeconometric model for the Croatian economy (the Minsky model), and for determining the balance of national resources in order to preserve and increase them.

The party proposes defining the structure of interest rates when new loans are issued and aligning interest-rate parameters of the existing loans pegged to a foreign currency, based on EURIBOR plus a fixed margin determined at the signing of the loan agreement.

The main activities also include measures to stop deflation, which would be designed by the Economic Council, and refinancing of the state's existing loan obligations next year.

The party will seek to promote the national currency, the kuna, as the basic currency in the financial system and will work on increasing employment, production and exports as the main goals of all policies. These measures would also be worked out by the Economic Council.

Further government borrowing would be limited by tying it to the GDP growth rate, and measures should be adopted to ensure fiscal accountability and public debt reduction.

Bridge also unveiled 12 key reforms for education, science and technology, some of which would be applied as of the first quarter of next year and some until 2018, while some of the measures would need to be implemented continuously.

The party plans to gradually raise the level of investment in education, research and development to reach the EU average, noting that investment in education in Croatia accounts for 4.21 per cent of GDP, while the EU average is 5.25 per cent. Investment in research and development accounts for 0.81 per cent of GDP, as against the EU average of 2.01 per cent.

The Bridge party would reduce VAT on scientific instruments to 5 per cent and would set up a fund for pre-financing of EU projects.

Last update: Mon, 23/11/2015 - 17:08

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