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Post by boris on Feb 27, 2010 2:02:04 GMT 1
Ye it is getting worse and worse, and nobody in Croatia has any idea how to fix it. I think we should with devaluation of Kuna, but this is a big NO to all Croats. Any other ideas?
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Post by ray51 on Feb 27, 2010 9:42:44 GMT 1
Much like Greece and some others ?; Croatia's crisis , IMHO , does not bear much relation to the severe recession that's currently prevalent in most of the western Europe and elsewhere ; rather , it has been on the cards for some years now , the population lived far too well ( relative to country's economic output ) whilst the whole sistem is unsustainable . It is the younger generations that will bear the brunt of this all , long term - or : leave ( but : where to leave to ? )
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Post by mambo on Feb 27, 2010 15:03:35 GMT 1
Croatia's current situation ?
GDP: 43 Billion euro Foreign debt: 42 billion euro unemployment: 22 % Coverage of cost by net income of workers: 79 % Growth of economy in 2009: - 5.7 % Growth of consumption by consumers: - 15 % Export growth 3rd qtr 2009: - 17 % Credit rating Croatia: BBB/A-3 Growth of tourism in 2009: - 1 billion euro car sales 2009: - 70 % Business optimism index 75 % (steadily going down) Tourism index optimism index 72 % (and this was the sector which would not go down according to the minister of tourism)
These are the not so positive numbers.
Some positive numbers can be found since the government expects a growth of the economy of 1,5 % for 2010. On what this assumption is based is unclear however.
Most important however is that Croatia will receive money from the EU as soon as it joins the EU and this is a serious amount. A total of 3.568 Billion euro is earmarked to come to Croatia and 373 million euro will go to farmers directly, 352 million for rural development.
However, once Croatia joins the EU it will have to pay roughly 600 - 650 million euro each year to the EU.
When you look at all these numbers it really makes you wonder how Croatia will be able to survive and more.................does the EU want another Greece in the EU ?
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Post by boris on Feb 28, 2010 14:46:03 GMT 1
Thanks for your comments. Yes, we are in a deep shtick, but any ideas on how to fix it? Our politicians do not want to do anything, as all measures are unpopular.
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Post by Carol on Feb 28, 2010 15:16:53 GMT 1
encourage investment with a simplified tax system, and cut the red tape for investors i.e. teach the government wo think in terms of how much investor could earn in one, two and three years and to accept that 0% over five years doesn't hold much incentive for those who would be helping the country (but politically this would be even more unpopular than devaluation, so it will not happen).
Croatia went through hyperinflation when part of Yugoslavia and even that wasn't bad enough to provoke a change in attitude, so I don't think anything that is happening now will.
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Post by happy on Feb 28, 2010 19:31:01 GMT 1
Pray for hyperinflation.
All debts will then be wiped off overnight .......... as before.
Problem solved.
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Post by Ribaric on Feb 28, 2010 22:11:20 GMT 1
Most people have credits which are quoted in Kuna but they all have a clause which index links the loan to the conversion rate to the Euro. Hyper inflation of the Kuna will merely increase the debt by the rate of inflation, probably to a degree which will bankrupt the debtor.... is how I understand things. This would be the main reason the kuna is maintained at it's curent seven-ish to the Euro. It's probably coming anyway but nobody wants to be the government when it happens.
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Post by 3lions on Mar 1, 2010 7:53:52 GMT 1
...ban illogicity
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Post by dugodude on Mar 1, 2010 10:23:01 GMT 1
Pray for hyperinflation. All debts will then be wiped off overnight .......... as before. Problem solved. I suspect you have never lived through hyper-inflation then. Every example I can think of led to (or was followed by) some combination of chaos, war and/or dictatorship.
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Post by dugodude on Mar 1, 2010 10:32:34 GMT 1
Most people have credits which are quoted in Kuna but they all have a clause which index links the loan to the conversion rate to the Euro. .................. This would be the main reason the kuna is maintained at it's curent seven-ish to the Euro. It's probably coming anyway but nobody wants to be the government when it happens. More or less fits my thoughts. It means that Croatia is, effectively, in the eurozone, enjoying all the disadvantages (primarily an inflexible exchange rate, leading to sluggish exports, expensive holidays in HR) while not gaining too much from it supposed advantages - it certainly can't influence the ECB meetings, not that I think Malta or Slovenia influence them much anyway.) The problem with the euro, at least outside the core countries (D, NL, F, B etc), is that if it does explode, could bring about the political chaos that it supporters say its creation was supposed to avoid. By plugging the dam, if it does eventually break, the rush of water is that much bigger. So, rather than slow, but small devaluations, if the kuna does go, it will not be by 5% or even 10%, but something horrible like 50% before some sort of correction sets in.
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Post by Ribaric on Mar 1, 2010 18:57:11 GMT 1
I like your "plugging the dam" analogy dugodude. Sadly, I fear it is accurate. It is quite possible that, after the next general election and presuming HDZ lose - then the incoming government will immediately slash the value of the kuna and be able to blame the previous government for making it necesssary. HDZ will clearly disagree and say "If we were still in government it wouldn't have happened". If HDZ win the election then I guess the dam will continue to receive more plugs.
I also agree that, after such a dramatic de-valuation, we will see marches, strikes, burning buses and banks folding due to the un-payable debts. Haven't we seen this before?...Recently?
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Post by BrankoL on Mar 1, 2010 19:06:45 GMT 1
Would that be too drastic: shoot half of the politicians? Maybe the situation would improve after that.
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Post by solitum on Mar 1, 2010 21:43:22 GMT 1
Thanks for your comments. Yes, we are in a deep shtick, but any ideas on how to fix it? Our politicians do not want to do anything, as all measures are unpopular. The following could work. Reduce PDV on food. Make companies restaurant visit fully deductable. Increase land tax, for second homes especially (Find a way to do it on family level) Increase income tax or contribution (As most people live from the state, they can not afford to decrease the taxes) Remove tax and contribution on companies producing for export. (Should bring some money into the country) Pray it will work
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Post by 3lions on Mar 2, 2010 3:49:33 GMT 1
...this reminds me of those festivals where people try to build their own flying contraptions and jump off a tower only to go straight down into the sea.
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Post by crojoe on Mar 2, 2010 4:51:23 GMT 1
just reduce PDV across the board period, open up the markets, encourage private business, do away with the stupid complicated accounting system, be more welcoming to outsiders. Croatia could easily be part of EU without joining. But, its the politics and big money boys that's are strangling the country. It just has a backward mentality.
I just did a world trip, stopping off in several countries, and at each border crossing I was met by welcoming officials. Smiling faces.. passport please, hope you have a nice stay.... , get to Croatia and tough guy immigration officer says 1 word PASSPORT! Never looking up and just scans it, thumbs through every page and hands it back (no emotion). After Cathay Pacific, Virgin with smiling helpful stewardesses, get on Croatian airlines to sad depressing looking stewardesses.
So, Croatia can't just blame world financial woes on its problems, its lacks. All that money they are throwing out to advertise Croatia won't do a bit of good till they straighten up their backyard.
Potential is huge, but they tend to think they can do it Croatian style.
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