Prime Minister-Designate Tihomir Oreskovic describes himself as a fiscal conservative and a political centrist in an interview with Thursday's Jutarnji List daily, announcing that he will choose his ministers immediately after the New Year and then define the main reforms and goals, and stressing that it is essential that the government focus on the implementation of short term goals and that Croatian citizens and the European Commission see the first changes.
He praises the platforms of the Croatian Democratic Union (HDZ) and Bridge parties. "The impression is that both have proposed quality reforms and that they have realistic goals," he says, praising the preparations HDZ experts have done in cooperation with the German IFO institute and recommendations concerning doing business. "It's necessary to improve some indicators of Croatia's competitiveness. In some indicators we have progressed, but when compared to Slovenia, the Czech Republic, Slovakia or Hungary, we see that those countries are growing faster than us, which means there's room for progress."
Asked about his economic and political views, Oreskovic says, "Financially speaking, I'm a fiscal conservative. Businesswise, I'm not for risky moves and experiments. The business world has its laws, rules and standards and I respect them... Politically speaking, I can say that I belong to the political centre."
Speaking of the monetary policy, in which the Bridge party wants some changes, Oreskovic says he is for change but gradually. "When I came to Croatia in 2009, it was impossible to get a long term loan in kunas. Now you can take a loan in kunas, but one should realise that 80 percent of savings is in euros and it's clear that we must make some moves in the system with more caution and, I repeat, gradually. We must bear in mind how risky some reforms are. However, the reforms we opt for we must implement quickly, efficiently and thoroughly."
Oreskovic says he recently met with central bank (HNB) governor Boris Vujcic. "I was interested in his views on the monetary policy, the price of money and such. These are extremely important issues for what lies ahead, notably for investment circles."
Asked which position he will take if Bridge and the HDZ want changes regarding the HNB's independence and changing the law so as to replace Vujcic, Oreskovic says he does not believe the law would be changed to replace the governor whose term expires in 2018. "I've heard that some politicians and economists have raised the issue of the HNB's responsibility and role in society. When I have all the information, I will join the discussion."
Oreskovic says he saw some statements in which Bridge MP Ivan Lovrinovic "denies that he is for devaluation and inflation. As I said, I support stability, and any exchange rate changes should be implemented so that citizens don't feel them, yet that they are an incentive to the economy."
He confirms that he will have the final say in the selection of the cabinet, but that he will first openly discuss HDZ and Bridge proposals. "If I estimate that a candidate isn't good enough for a ministry, I won't accept them. We could say that I will have the right to veto." "It will be my team and I will be responsible for its results. We'll have to work together on the implementation of reforms," he says, announcing that talks on the government's structure will begin on Monday.
Asked about the budget and EC criteria on deficit movements, Oreskovic says the EC says in a report that Croatia could reduce the deficit and the debt and that there are reform measures which Croatia should implement. "I'd like to stress that this is a question of focus and implementation. Focus will be key for the new government. Thereby we will show both credit agencies and the EC that we are willing to implement reforms. I believe we will manage to improve the credit rating."
He says the credit rating is very important. "We can reduce expenditures and at the same time I believe we can increase revenues if we create a positive climate. If in the short term, as a government, we show willingness for reforms and create conditions to increase competitiveness, we will draw investments, increase GDP and reduce unemployment."
"It's important that we focus on and implement short term goals. Some reforms and programmes as well as bigger strategic investments will take time. Therefore the first changes are very important. Both citizens and the European Commission must see them."
Oreskovic goes on to say that property tax is standard in Europe and the rest of the world. "I wouldn't introduce tax on all properties in the short term, but I'd like to solve the issue of unused properties. That's dead capital... When you tax a single property, that's a social category, but when you tax a second, a third or a fifth, that's an economic category. The most important thing is to put dead capital to use."
Asked about the HDZ's announcements that it would like to cut VAT, Oreskovic says that over the past six years he became well acquainted with Croatia's economy and warns that the grey economy is high. "With a very high grey economy, this VAT rate (25%) makes sense. However, we must eventually tackle the grey economy and then we'll reduce VAT."
Speaking of health care, Oreskovic says it is very complicated and that without a deeper analysis, he would rather not rush solutions. He says some indicators unequivocally show that the system should be changed and that he believes that everyone sees that. "But, transparency of procurement, costs and effectiveness is key. What are the key performance indicators (KPI) of hospitals? What is the KPI of the system? When we see the data, we'll propose programmes."
Oreskovic believes everyone sees that public administration should be reformed too. "As far as I know, Bridge hasn't set the abolishment of counties as a condition but requested talks on the adoption of the best solutions. That's what we'll do. We'll see how to increase the efficiency of administration and how to define the territorial organisation. If I understood well, Bridge wants to open talks on the reallocation of powers between towns, counties and municipalities."
"One should focus on efficiency, on the use of resources," he says when asked about the country's administrative reform, given that the Bridge party wants Croatia to be divided into four regions, while the HDZ is against reducing the number of counties.
Oreskovic goes on to say that the construction of an LNG terminal on the island of Krk is a key capital investment. He says that in the Slavonia region, irrigation is the most important project and that more should be invested in increasing productivity. He says it is also important to build a railway between the seaport of Rijeka and Hungary, and the Peljesac bridge, describing it as a strategic investment. He is against drilling for oil in the Adriatic.
Asked if he has a view on a pension reform, Oreskovic says there will be no hasty moves. He says a combination of an intergenerational solidarity system and an individualised saving model, namely of the first and second pillars, can yield positive results.
Asked what he thinks of Cyrillic signs in the eastern town of Vukovar, he says it is still not time for that "because the wounds are still fresh, but the Cyrillic script will eventually come to Vukovar. Istria has the Italian language. A modern state must protect its minorities, so the Cyrillic script will come to Vukovar in due time."
Speaking of education, he says Croatian faculties do not have a sufficiently good link with the private sector. "We must have a strategy which will create the link between universities and business."
Oreskovic says he is a Catholic and that he goes to church with his wife and four children whenever he can.