After years of declining and stagnating GDP in Europe, including Croatia, the only way out of the current crisis is GDP growth, which requires new investments, employment and export, however, given the huge imbalance between Europe's north and south and the current weak growth prospects, overcoming the crisis will take more than two or three years, Croatian National Bank vice governor Boris Vujcic said in Zagreb on Tuesday.
Vujcic was speaking at a conference on financial solutions organised by IBM Croatia, which brought together about a hundred representatives of the banking and IT sectors.
IBM presented at the conference its latest solutions for the financial sector.
Speaking of the banking sector in Croatia and its neighbourhood, Vujcic said that it would not expose itself to greater risks than it had so far until GDP increased, new investments were made and exports were launched. This, he said, is difficult because everyone knows that they have to export, but fewer and fewer people know where they should export to.
Another problem in Europe is that the unemployment rate is much higher than it was during the great crisis of the 1930s, and there is a great imbalance between the north and south of Europe, even greater than it is between the United States and China, Vujcic said, adding that removing the imbalance will take many years.
Nevertheless, he described the situation in the eurozone and in Croatia as much better than it was in November last year, which he said was a result of financial assistance to Greece, adding that the eurozone was expected to stabilise further.
Vujcic said that there would be no major changes in Croatia's financial sector upon the country's accession to the EU because the sector was already integrated in the EU through parent banks which in Croatia hold 90 percent of bank assets. He added, however, that it was important for Croatia to join the monetary union as soon as possible.
"This will depend on many external conditions, the success of dealing with the crisis in the eurozone and the stability of the monetary union, but also on Croatia's preparedness. We won't get anything if we stay outside the (monetary) union, and accession to it will remove exchange rate risks which are one of the biggest financial burdens at the moment."
Speaking of inflation, Vujcic said that it was under control at present and that the HNB expected an inflation rate of 2.5 percent, which he said was an acceptable increase and not a problem.
Vujcic said he did not expect parent banks to reduce their exposure to the region and Croatia or to withdraw from the countries in the region, unlike some banks that have withdrawn their capital from Hungary.
