Finance Minister Slavko Linic on Thursday reiterated that the Croatian Postal Bank (HPB) and the Croatia Osiguranje insurance company would be privatised and that the budget deficit would be financed partly with loans and partly with privatisation revenues.
Answering reporters' questions after a government session about objections from some trade unions that the business performance of the HPB and Croatia Osiguranje was good and that there was no need to sell them, Linic said trade unions had the right to think so.
"But the main question is - and I'm asking all Croatian citizens - do they think that we should finance excessive spending in the pension, health and welfare systems with loans at interest rates of more than 8 percent and incur new debts for the generations to come," said the minister.
"Excessive spending, reforms that have not been implemented, a market economy that has not been adjusted because there are still remnants of the Socialist economy - it will be financed partly with loans and partly with privatisation revenues. In doing so, we will show that we want to preserve both institutions (HPB and Croatia Osiguranje)," said Linic.
He warned that with the two companies' privatisation, the budget deficit would be around ten billion kuna and that it should be clear that one could not live on loan forever.
"Everybody thinks that foreign institutions will give us loans forever. Maybe so, but at an interest rate of 20 percent, and I don't know who will be able to pay such a rate," he warned.
Asked if there were buyers interested in the HPB and Croatia Osiguranje, Linic said the tender would be public and that he was confident there would be interested buyers.
