Sometimes it is quite difficult to manage your own capital. Some people lack experience, others do not get on with spending, while some individuals do not have money-saving skills. Such things happen not only to ordinary people, but also to countries. Last week, Croatia, which joined the European Union in mid-2013, took the rap for violation of the budget discipline. Now the country faces public flogging so that it does not become a habit. At the moment, finance ministers are examining the main financial document of the country to find non-compliance with the recommendations of the European Commission. However, they will hardly discipline Croatia in full since the country is not the member of the euro area. Nevertheless, Croatia will have to meet the requirements. Commissioner for Economic and Monetary Affairs Olli Rehn told that the EC prepared a package of measures to reduce the budget deficit by 2016. In 2013, the budget deficit came in at 5.4% of GDP. According to the plan, the deficit must be kept near the level of 6.5% of GDP. Moreover, Croatia is required to reduce the deficit to 3% of GDP, as stated in the Maastricht Treaty. In its turn, Zagreb reported its readiness to urgently take measures to cut the deficit. According to Prime Minister Zoran Milanovic, there will be reforms in healthcare system, judicial system, education, public administration, and labor market. The government does not think that the EC’s comments on the budget should be regarded as a punishment. On the other hand, the EU could make an excuse out of that to impose a fine. So Croatia will not drag the changes out and will take measures soon.
