Zagreb, 24 November 2009 – Participating in the forum organized by the Union of Autonomous Trade Unions of Croatia and Friedrich Ebert Foundation about the new economic policy, the economic expert Ljubo Jurčić pointed out that 80 percent of the crisis in Croatia was caused by our own mistakes and only 20 percent by spill-over effect from the global crisis.

“Croatia is now facing the truth – its consumption is larger than production, its import is larger than export, it has a large foreign debt, its competitiveness is constantly decreasing and, due to deindustrialisation, it no longer has domestic products”, warned Jurčić and added that this year’s GDP would, due to the crisis, decrease for 5.5 percent.

We have destroyed the industry

Countries usually develop from manufacture towards industry but it is the other way around in Croatia – we have destroyed the industry developed during socialism and there is nothing new to replace it. Only 12 percent of investments are allocated to processing industry, which is the lowest percentage in Europe, pointed out Jurčić. Instruments of economic policy in other countries are aims in Croatia, so the stable exchange rate became an end in itself even though it increases the price of domestic products and destroys their competitiveness, and zero deficit of the state budget is still insisted upon, in times when other countries use the deficit to stop the crisis (for example the deficit in the USA amounts to 13.3 percent this year). All this led us to the position where we have neither products nor jobs – Croatia participates with only 0.2 percent in Europe’s production, and that is lower than the statistical error, concluded Jurčić.

Economic policy must find out what Croatia can produce

Together with another economic expert participating in the forum Damir Novotny, he is committed to developing a new economic policy which would, first of all, find out what Croatia can produce and then provide conditions for production. Novotny warned that Croatia had to start modernizing very soon, otherwise it would live in stagnation for the following 10 to 15 years.  The Government needs to do this because the recovery from the crisis will not “spill over” from the European Union, said Novotny and pointed out that the Government needed to “stop with the empty stories” that the most parts of the budget are predefined so nothing can be done. We have to attract foreign investments in order to create new, high-quality jobs even if we have to beg foreign investors to come to Croatia, said Novotny.