Increasing liquidity and savings in state-owned companies is a vital part of the government’s anti-recession measures to be announced on Thursday by Prime Minister Ivo Sanader. State-owned companies have to present their cost-savings plans to the Government by Wednesday. All expenses not vital for companies’ operations, such as car fleet management expenses, intellectual services, marketing and promotion, representation and telephone expenses must be reduced.

They also have to reduce or abolish the volume of investment that is not an integral part of the company’s core business activities, while the remaining expenses will be revised in order to reduce the amount of total expenses. The cost-savings plan is a great opportunity for the Government to open the question of reducing managers’ compensation and comparing them to the salaries of the President of the Government. The State will secure loans for covering debts to the three public companies most responsible for the illiquidity of the state system- Croatian Electra (Hrvatska Elektroprivreda (HEP)), Croatian Motorways (HAC), and Croatian Roads (HC). Deputy Prime Minister, Mr. Damir Polančec, stated that HEP was supposed to receive approval on the Thursday’s Government Cabinet meeting for a 50 million euro loan. Minister Šuker did not want to reveal the amount of the loan negotiated with HAC and HC, but commented that this inflow will take care of 80% of the long-term outstanding debts of the three companies. This will reduce the outstanding debts of the public companies to 250 million kn. There is louder and louder word on the market that the state road construction companies have financial needs of up to 2 billion kn.