Linic was responding to questions from the press following an interview on Sunday evening with Croatian National Bank (HNB) Governor in the wake of Croatia's credit rating downgrade. The interview touched on possible loans with the IMF and other related matters after the signing of a loan with the European Bank for Reconstruction and Development and guarantees for that loan to finance the reconstruction of the Port of Split.

Linic explained that next year, if necessary, the country could take out a foreign loan and that he could not be certain what will happen by the end of the year and that this would still be discussed with the HNB if need be, but that the exchange rate and flow of capital were still not under threat.

It is obvious that our interest rates will be somewhat higher in keeping with solvency and investments, Linic said, but noted that he did not expect those to be much higher.

He pointed out that the IMF was already present in Croatia and the question was whether or not to conclude some form of arrangement with the IMF, but that Croatia held talks with the IMF twice each year about the governments policies.

For the time being there is no need to take any new arrangement with the IMF, he repeated.

Asked about the possible issuing of government bonds, Linic said that the government was considering doing so on the domestic market because citizens had savings and if they showed an interest in bonds then the government would turn to this.

Debates are being conducted on whether growth in the public sector is required, we are obviously facing problems in the economy that needs to be financially consolidated, primarily the private sector, said Linic.

Linic welcomed the president of the Croatian Employer's Association Ivica Mudrinic's offer to help the government, but first it was necessary to resolve the problems in the private sector which have still not been addressed and that the private sector was too slow in reacting to the government's actions.