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Post by Ribaric on Jun 26, 2014 10:16:37 GMT 1
Financial Times says Croatia is EU’s new economic basket case.
Greece's economy is slowly and painfully healing after a catastrophic debt crisis and the title of No.1 Economic Basket Case of the European Union is now held by Croatia, according to the Financial Times. " Which country now holds the title of No.1 Economic Basket Case of the European Union? The answer is surely Croatia," FT said. "It is a small country (4.3 m people, not even 1 per cent of the 28-nation EU’s 506m inhabitants) that did not join the EU until last July. It is not a eurozone member. It has gorgeous lands and beaches where life seems distinctly pleasant. So Croatia and its economic troubles often slip under everyone’s radar, read the article-. The Financial Times recalls that Croatia is now in its sixth successive year of recession and that during this time it has lost almost 13 per cent of its gross domestic product. Unemployment is about 17 per cent of the workforce, and among young people the rate is close to 50 per cent, FT said. "This is a social disaster not very different from what has happened over the past five years in Greece and Spain.
In Croatia, as in Greece, there is an inefficient public sector that keeps people in jobs that serve no obvious public purpose beyond disguising true levels of unemployment. This problem is magnified by a shortage of private sector companies capable of creating jobs by competing successfully in EU markets," the article read. "Clearly, the general weakness of the European economy explains some of Croatia’s difficulties. But not all of them. When Moody’s, the credit rating agency, cut Croatia’s sovereign debt to junk status last year, it cited the government’s “reform inertia” as one reason for its action," the Financial Times said adding that it was a fair assessment. "The centre-left government lacks the energy, desire and self-belief to carry out essential reforms such as shaking up the state-owned sector and making business conditions attractive for foreign direct investors. Privatisation programmes are going nowhere. But when the conservative opposition was in power, its record was little better," the article said. "They all spend too much time playing politics for its own sake – a point illustrated earlier this month when the ruling Social Democrats expelled from their party a former finance minister, Slavko Linic, who had dared to speak up in favour of economic reform," read the article. The Financial Times claims that it is no coincidence that states such as Macedonia, Serbia and Slovenia – which, like Croatia, once formed part of communist Yugoslavia – have also found it hard to embrace economic reform over the past 20 years.
Traditions of public sector jobs tied to party political patronage die hard in south-eastern Europe, FT said. "EU membership is supposed to help central and eastern European countries by supplying them with billions of euros in regional aid funds, to be invested in infrastructure modernisation and other such projects. The star performer has been Poland, which has put its money to excellent use (much as Spain did in the 1990s). However, Croatia proved exceptionally slow in using funds that the EU made available for development in the seven years before it joined the bloc on July 1 2013. There is a crying need for more efficient managers and a predictable legal framework. The efficient absorption of EU funds will be crucial to lifting Croatia out of its rut. But most of all, what Croatia needs is a breath of fresh air in its political and administrative classes. It would be asking too much to expect them to admit their past shortcomings. But can they not at least roll up their sleeves and start the long-overdue process of modernising the Croatian state?" the Financial Times concludes.
I dislike making negative noises about my adopted country but, by my observation, this article has scored a bullseye.
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Post by crojoe on Jun 26, 2014 14:23:45 GMT 1
Financial Times says Croatia is EU’s new economic basket case.
Greece's economy is slowly and painfully healing after a catastrophic debt crisis and the title of No.1 Economic Basket Case of the European Union is now held by Croatia, according to the Financial Times. " Which country now holds the title of No.1 Economic Basket Case of the European Union? The answer is surely Croatia," FT said. "It is a small country (4.3 m people, not even 1 per cent of the 28-nation EU’s 506m inhabitants) that did not join the EU until last July. It is not a eurozone member. It has gorgeous lands and beaches where life seems distinctly pleasant. So Croatia and its economic troubles often slip under everyone’s radar, read the article-. The Financial Times recalls that Croatia is now in its sixth successive year of recession and that during this time it has lost almost 13 per cent of its gross domestic product. Unemployment is about 17 per cent of the workforce, and among young people the rate is close to 50 per cent, FT said. "This is a social disaster not very different from what has happened over the past five years in Greece and Spain.
In Croatia, as in Greece, there is an inefficient public sector that keeps people in jobs that serve no obvious public purpose beyond disguising true levels of unemployment. This problem is magnified by a shortage of private sector companies capable of creating jobs by competing successfully in EU markets," the article read. "Clearly, the general weakness of the European economy explains some of Croatia’s difficulties. But not all of them. When Moody’s, the credit rating agency, cut Croatia’s sovereign debt to junk status last year, it cited the government’s “reform inertia” as one reason for its action," the Financial Times said adding that it was a fair assessment. "The centre-left government lacks the energy, desire and self-belief to carry out essential reforms such as shaking up the state-owned sector and making business conditions attractive for foreign direct investors. Privatisation programmes are going nowhere. But when the conservative opposition was in power, its record was little better," the article said. "They all spend too much time playing politics for its own sake – a point illustrated earlier this month when the ruling Social Democrats expelled from their party a former finance minister, Slavko Linic, who had dared to speak up in favour of economic reform," read the article. The Financial Times claims that it is no coincidence that states such as Macedonia, Serbia and Slovenia – which, like Croatia, once formed part of communist Yugoslavia – have also found it hard to embrace economic reform over the past 20 years.
Traditions of public sector jobs tied to party political patronage die hard in south-eastern Europe, FT said. "EU membership is supposed to help central and eastern European countries by supplying them with billions of euros in regional aid funds, to be invested in infrastructure modernisation and other such projects. The star performer has been Poland, which has put its money to excellent use (much as Spain did in the 1990s). However, Croatia proved exceptionally slow in using funds that the EU made available for development in the seven years before it joined the bloc on July 1 2013. There is a crying need for more efficient managers and a predictable legal framework. The efficient absorption of EU funds will be crucial to lifting Croatia out of its rut. But most of all, what Croatia needs is a breath of fresh air in its political and administrative classes. It would be asking too much to expect them to admit their past shortcomings. But can they not at least roll up their sleeves and start the long-overdue process of modernising the Croatian state?" the Financial Times concludes.I dislike making negative noises about my adopted country but, by my observation, this article has scored a bullseye. As the ol saying goes, with no change the people perish, same can be said about a country. The Croatian government and it's partners are so inward looking. You can't even get EU money unless you pay for it, know someone or make a bit of noise. Croatia is a gold mine, but the miners are on strike 24/7/365. It's a "me me" culture. If you think Zagreb is bad, try the countryside. Hardly no one wants to lift a finger to make it work. A super educated youth workforce, and 50% or more can't find any work. Great for me as I employee them. The real problem rests with the government and business owners though, they cheat, don't pay salaries and treat their employees like trash. I don't hear of Croatian firms winning "best employer" of the month or year in Croatia, that title always goes to foreign managed companies. Sadly it all has a knock on effect and it's the little people on the ground that suffer the most.
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