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The main directions of the government's activities to come out of the crisis are restoring order, consolidating state finances, restructuring and downsizing the state and public sectors, and adopting measures for economic recovery and new growth,Croatia's Prime Minister Zoran Milanovic said in parliament on Tuesday.
All four directions are nearly equally important because only positive results on all four can result in a better standard of living for our citizens and orderly state finances, he said.
The prime minister said the poor economic situation in Croatia was "the result of years of irresponsible HDZ-led governments."
He recalled that in 2011 his government inherited HRK 41.6 billion in illiquidity, HRK 2.5 million in due liabilities and 205,000 workers who were not getting paid.
He said gross domestic product in the second quarter of 2013 was down 0.7 per cent on the year in real terms but 0.2 per cent up from Q1.
Milanovic said the public debt would reach HRK 190 billion by the end of the year, but that the budget deficit was reduced by more than HRK 4 billion to slightly over HRK 11 billion, of which nearly HRK 9 billion went on interest rates.
He recalled that his government had privatised three large shipyards, that the Finance Ministry had introduced a more orderly collection of taxes by publishing a list od tax debtors, rolling over tax debts as well as through fiscal cash registers and pre-bankruptcy settlement.
He said legislative amendments by the end of the year would bring order to the finances of non-profit organisations. "According to available data, about 10,000 associations which submitted financial reports generated HRK 4.5 billion in revenues, of which HRK 1.2 billion from public sources. This means that more than HRK 3 billion remains outside any financial control."
Milanovic recalled that his cabinet had also completed a voter register and that it was computerising the welfare system so as to put an end to those cheating the state.
The Croatian prime minister said economic growth was the only way to reduce the deficit and that in the short term this could be done by privatising or leasing state property. "Don't believe those who say we are selling the state. A company which has swallowed up billions of kuna from the state budget is no national treasure." Milanovic said the government wanted to discuss how to preserve and increase workers' rights and further tax reliefs for citizens and businesses. "But as long as we are wrestling with a budget deficit and enormous credit liabilities, some demands to increase or retain material rights are simply not realistic." He said social rights, the payment of pensions, and war veterans' entitlements would not come into question. "But we won't curry favour and delude. At the beginning of our term we rescinded officials' right to privileged pensions and now we will move reducing pensions that are higher than the average salary but were not earned through work." Government
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