Commentary on the Croatian Government’s Economic and Fiscal Policy Guidelines for the 2012-14 Period

Although the Economic and Fiscal Policy Guidelines for the 2012-14 period, adopted at the Croatian Government session of 27 July , were issued slightly earlier than in the previous years, their credibility is rather questionable. While emphasis is laid on the need for fiscal consolidation and structural reforms, the assumptions underlying the Guidelines are too optimistic and the projections offered lack conviction and cannot be verified, because they do not contain the data prescribed in the State Budget Act (see Box). As in the previous years, salvation is expected to come from the EU economic recovery and Croatia's EU accession. However, the EU recovery is uncertain, and the accession benefits will only be felt in the longer run, and getting them requires tremendous efforts on the part of the country. Greece provides an excellent example that such things are never easily achieved