Mladen Barbaric is a journalist for Croatian daily newspaper Novi List. The SABF Team graciously thanks him for taking the time to write the following article illustrating the effects of the economical crisis on Croatia.
By the time I finish this text, I might lose my job. That’s how the things are at the moment in the tiny country on Balkan penninsula, where 4,5 million Croatians live. And it’s not just my job, there are lots of jobs that will be crushed by the phenomenon which was at first spoken of in whispers and now you can hear the dreaded word in every bus from just any highschool kid. CRISIS. It’s like coca-cola add, and you just can’t escape it.
The word about crisis really got through to the average Croat in autumn of last year when US presidential ellections plucked attention of Croatian media. Candidates had a great emphasis on dealing with the crisis in the US, so papers and TV stations started to follow it feeding Croats with a bunch of info they really didn’t understand nor care for. The only word they could fully appreciate was CRISIS.
While monetary sector, various people within banks and other fiscal institutions, already knew very well what was going on overseas, average Croat was still thinking about forthcoming World Handball Championship that was going to be held in Croatia. Domestic media was hyping event and Croats thought only about handball.
A few months passed, january passed, the World handball championship ended, and Croats woke up. A country 35 billion euros in debt spent circa 500 million euros on modern colliseums while citizens had to live with an average of 600 euros a month. It was as expensive as buying a flat in Paris just to spend seven days running around Louvre.
Meanwhile, far away in the States, Obama won the ellections, vacuum cleaned and huge amounts of money were injected in banks and other institutions that keep the economy running. Stories of overseas job cuts, sales decreases and big companies in trouble flooded Croatian media. Soon enough attention from US economy downfall turned to domestic economy downfall.
At the same time last year we saw prices increase all over the shelves in supermarkets, and at the start of this year money seemed to have vanished. One of the biggest spenders and investors in Croatia is the government itself. But as money dried, so did the spedning and financing which put whole machinery on hold. Government delayed paments to its providers and those delayed their payments further down the money chain.
More and more Croats heard gossip about job cuts in their companies. Somebodies mother’s colleague got fired. Someones girlfriend got laid off. Someones neighbour didn’t get pay for his job in tourist agency. His boss just showed up and told him bad news is he wont get usual wage, but the good one is he can get seven days free accomodation in a hotel on Turkish coast. If he can pay travelling costs, though. Seems like all new year wishes didn’t come true as, from around january, more people got back to goods exchange instead of real money payments.
Since Croatia got its independents from Yougoslavia in the year 1991, pretty much every state company was sold. All profitable companies, like the national Oil company, Telecomunications, Medical research, or bank got its buyer from abroad. The state was left off with companies riddled with debt and even those are broke into parts so profitable sections could be sold, either to local olygarhs, or international investors.
Without any major production, let alone export, nor anything left to sell, the country is completely dependant on bank loans. The only major cash input, 70 percent, comes through tourism and this year is really not good for traveling nor tourism at all. Simply because neither Croats nor europeans have money to spend traveling around our coast.
In an attempt to rise some cash, last month the goverment introduced plan for pension reform. Plan is simple, as people who thought of it are. Just take money from the pension funds and put it onto the government bank account. Of course, there is an explanation for such a gimmick. Still, there is no explanation on where the government will find money when, in few years all these people who invested in pensions founds, actually get old enough to enjoy their pension.
It’s common sense in Coatia to drain the state as much as you can and one of the most succesfull milkmen, beside local olygarhs, is Catholic church. Being just one of only few countries that signed „concordat“ with Vatican, Croatian citizens pay 50 million euros every year. Money goes for wages of clergy and general upkeep of Catholic church. Being asked about current crisis and need to solidarize with citizens, clergy spokeperson just replied that lot of money that church gets from tax payers is returning to society through „Caritas“. Croats are very proud because Pope John Paul II visited such a small country on three occasions, but who wouldn’t visit such a good people that give you 50 million euros annually?
Despite job cuts and salary decreses amongst citizens, banks in Croatia (not croatian banks) have done very well. Extremely well, actually. In january this year they have increased their profit compared to last years january for 40 percent while bank properties have risen 14 percent in the same period. It’s not in vain mentioning that whole Croatian GNP is exceeded by banks by 13 billion euros.
And why is this happening? Really simple, because all Croats are in debt with banks which is not that odd as the state itself is loaning money from all those banks also.
Despite the crisis, the average Croat is still more obsessed with news on the last Big brother show, or the new gadget he can get on discount. Nevertheless, an odd feeling is creeping up the necks of my fellow countrymen. As one after the other family member gets fired, resources for such gadgets are less available. In fact, markets saw an increase in the sales of oil and flour which is usually a good indicator of low standards or Christmas time. And we all know it ain’t Christmas this time.