Standard & Poor's on Friday revised its outlook on Croatia from stable to negative retaining the current rating for foreign loans and in domestic currency at BB+.

HUP cautioned that after five years of constant recession and a falling living standard, the additional decline in economic outlook impacted by a shattering of an already fragile confidence by investors - foreign and domestic - due to a further downgrade in credit rating, could result in not only serious economic but also social repercussions.

Even though the government has taken certain measures to launch some vital reforms this is not sufficient as the situation in the economy continues to be poor and so the opinion by the world's largest credit agency unfortunately is not unexpected. It is yet more proof of what HUP has countlessly repeated - if urgent reforms that will stabilise public finances and facilitate an improvement in the country's business climate are not sped up we cannot expect our credit rating to be upheld nor can we expect vital economic recovery, HUP's press release says.

There is no unknown factors in what needs to be done as the most relevant domestic and foreign experts all agree on this. Croatia above all requires urgent, all-encompassing reforms of the public and state sectors with the aim of raising management responsibility and efficiency and a reduction in expenditure. Alongside reforms of the public and state sectors, it is necessary to begin to reduce excessive state levies on the economy which would lead to better competitiveness and ability for growth and development, investments and new jobs, says HUP.

HUP once again appealed to the government to be more resolute, faster in implementing and launching reforms that will create more favourable business conditions. Croatia has no alternative if it wishes to embark on the path of recovery and that is why we should come to a broad social consensus as any further delay in reforms jeopardises the future for all of us.

As a responsible social partner, HUP notes that it has always been and will remain ready to offer its full and unreserved support to the government in implementing vital changes and HUP called on other social partners and all factors in society to support the government to speed up reforms and to help implement these so that we can prevent the further collapse of our credit rating and economy and the vitality of society overall as it is directly dependent on a successful economy, HUP's press release concludes.