NO DEFENCE IN THE INA CASE 'I have no reason to defend myself before the parliamentary commission because it is the governments led by Ivo Sanader and Jadranka Kosor, who did not know how to run the company, that are to blame for INA'Although he points out from time to time that he has no more ambitions to be involved in the operative side of politics, Slavko Linic remains one of the most important members of the Social Democratic Party of Croatia. A former deputy prime minister under Ivica Racan and a close associate of Zoran Milanovic, he has participated these past weeks in drafting the SDP economic platform - a key party document that is to be presented to the public on September 25th. And Linic will testify before a parliamentary inquiry into the privatisation of INA these days. As a vehement critic of the HDZ (Croatian Democratic Union) he is convinced that the ruling party wants to lay the responsibility on him but, if one were to judge by the interview for Nacional, he is very much ready for a verbal showdown. The interview with Slavko Linic wrapped up a few minutes before three influential businessmen, Damir Kustrak, Ivica Mudrinic and Emil Tedeschi, arrived at the SDP headquarters on Ibler Square. We asked Linic the following day what his impressions were coming out of that meeting.

NACIONAL: How did the meeting go and what did you discuss?
- The meeting was very interesting and good for the SDP, but I would venture to say, also for the Croatian Employers' Association. A number of points of contact crystallised during the meeting concerning solutions that could push Croatia out of crisis and towards economic growth and the implementation of the necessary reforms. The key to our recovery is economic growth, investment and an efficient state bureaucracy, and that was, consequently, the mainstay of our discussion. None of this can be achieved without control of government expenditure. There is much discussion ahead of us on these issues. As far as the atmosphere at the meeting goes, it indicated the concern of business people in the lack of serious measures by Government and the lack of implementation of reforms. As a result they were oriented in the discussion on what the SDP solutions were for curtailing the drop in employment and to initiate and attract investment, without which there can be no economic recovery. There is no investment, no way out of the crisis and no control of spending without an efficient public administration. It appears to me that our response was very satisfactory.

Offering solutions

NACIONAL: Surveys indicate that most Croatians see the HDZ-led Government as unsatisfactory, but likewise do not have much confidence in the SDP and your coalition partners.
- To me personally as a politician it is not clear why this opinion exists. It suffices to recall that the SDP-led Racan administration from 2000 to 2004 implemented a great number of reforms, reducing the burden on the economy, launching decentralisation - which means that we knew how it should be done. On the other hand we had a rational employment strategy in the state bureaucracy and in companies. What is more, we even reduced the number of employees in what was already then an overcrowded state bureaucracy, which caused us quite a bit of trouble. We launched investments in road construction, built mobile energy systems, we launched the renovation of railway lines and electrification - and so in the four years the SDP was in power it demonstrated that it had a strategy and knew how to launch reforms. We were much more responsible in spending money than HDZ-led governments are. The deficit at the time was about 5 percent, but the economy was growing at a rate of from 6 to 6.5 percent. Since then, now that we are in the opposition, we have not simply criticised, but have in fact offered solutions and proposed some 20 new laws. Our greatest compliment came from the HDZ when it said it would change the tax policy in the autumn, something the SDP has been advocating for years.

NACIONAL: What do you intend to do over the coming year?
- We will have to constantly offer solutions, and also to remind people of everything we have proposed in the past. We need to show Croatians that the SDP can lead Croatia better than the current administration. The second thing is to reject the HDZ's attempts to criminalise their opponents. As is known, they have labelled me as one of the biggest criminals, and accuse me of everything and anything - from Rijecka Bank and Viktor Lenac cases, to the Dubrovnik hotels issue. It is a dirty attempt on the part of the ruling party to try to smear the rest of us by concocting stories, although as we can see it has all come to naught.

NACIONAL: Are there investigations being led against you in any of these cases?

- There are no investigations being led against me. It is only important to muddy the political scene and show that all politicians are the same. My message is that neither Tomislav Karamarko, nor Police General Director Oliver Grbic will succeed in the attempt.

NACIONAL: Do you still stick by your accusation that Tomislav Karamarko is a common spy?
- Absolutely. I continue to feel the same way about him, because a person holding the post of interior minister and having control of the secret service is a very strong person, and he is abusing the position he has. That is why I said that about him.

NACIONAL: And that Jadranka Kosor is as tedious and ineffective as a fly?
- I should be honest and admit that I picked this up from a group of business people I met early this summer, those being the words with which they described Jadranka Kosor. When I heard from others that they describe Prime Minister Kosor as a fly, and not as a busy bee, I allowed myself a little frivolity.

A new economic platform

NACIONAL: In two weeks time the SDP will showcase its economic platform. What are the highlights in the document?
- We want to show Croatian citizens our strategy for economic growth and the battle we are waging for jobs. When we do come into power, we intend above all to unburden the economy of excessive taxation, because the economy needs to pay less in taxes, and numerous parafiscal levies have to be done away with. Instead of that we will tax capital and earnings from capital, and when we say this we refer to property that is not in the function of the economy, but rather of a speculative nature. The economy will pay less, and more will be paid by those who possess wealth, but do not use it to create new jobs. Our second task is to create an efficient administration, which is currently suffocating and blocking all investment. Unlike the HDZ, which feels that the state should not be involved in the economy, we hold the opposite to be true. The state has to assist a rapid increase in investment above all in the energy sector and allow for the construction of many smaller hydroelectric power plants and perhaps some thermal electric power plants, and not like Ivo Sanader and Jadranka Kosor to favour atomic energy. Then there is the further construction of natural gas and oil pipelines and the modernisation of the refineries. We want to invest in the railways because it is an opportunity to draw on EU funds. And there is the resolution of the issue of illiquidity, something we showed we knew how to do in 2000.

NACIONAL: If the SDP does win the coming elections, will you reduce the number of people employed in the civil service?
DURO POPIJAC, MINISTER of the Economy, with Ivan Suker, Finance Minister in the HDZ Government — it is he, says Linic, together with Prime Minister Jadranka Kosor, who is to blame that Croatia lacks the money needed for reforms, 'it was burned up by the HDZ administration'- For me a reform of the administration means raising the level of efficiency, but clearly also a smaller number of employees. I know that some respected persons object when we say that a reform of the administration also implies a rationalisation of the number of people employed, but that means that some do not want to admit that there is among the 260 thousand employed in the public and state bureaucracy a mass of people that got their jobs to meet the political needs of the ruling structure led by the HDZ. There can be no employment on lines of party-political allegiance in the state bureaucracy. But you can be sure that we will not push their people out to employ our own. Let all those who oppose a rationalisation of the public administration say openly where a country like Croatia needs 260 thousand employed in the state sector. And besides, the press has revealed that there are many who receive wages, and do not even come to work. It is a difficult task, but we will have to, when we come into power, resolve it. Besides, even Jadranka Kosor has said that there is a surplus of employees in the state administration.

NACIONAL: Do you know the extent of this surplus?

- I do not wish to get into numbers because it immediately turns into a witch-hunt. Instead of a serious discussion about the problem, someone will come up right away saying that Linic wants to kick people out into the streets. Which is nothing more than spin, because they avoid saying who put people on the payrolls of the state bureaucracy that neither the citizenry nor the economy need. Unfortunately, we will have to resolve that too.

NACIONAL: The problem is that most people, just like in 2000, ostensibly accept change, but I real life reject even a minimal reduction in the benefits they personally receive.
- Pensioners are not the problem in this country because most pensions are too small, and it is thus unacceptable to say that pensioners have too many rights. The problem is that the average age of pensioners is just a little over 50 years of age, and the question is who created this army of pensioners. It was the HDZ that did so by making it possible for people to go into retirement at the age of 40 or 45, and in return won itself new voters. The system is unsustainable, and also morally unacceptable because it is immoral to send a 45-year-old into retirement. And there are parliamentary pensions, which are unfair and privileged and the SDP will also tackle this problem. We will adjust the pensions of state officials to their years of employment and earlier earnings and by doing so bring them closer to other pensions.

NACIONAL: Do you support bringing the International Monetary Fund into Croatia?
- That is a false proposition. The question is not whether we need the IMF, but whether Croatia has the money required for reforms. In these seven years the HDZ has destroyed much. I am afraid that Croatia lacks the necessary financial means for reforms because the HDZ administration has burned it all away.

NACIONAL: This sounds like a slogan: "Better the IMF than Ivan Suker and Jadranka Kosor."
- Ivan Suker and Jadranka Kosor have now been clearly recognised for what they are, and their names in Croatia are synonymous to no reform or change. But Croatia has no future without reforms and changes. It is they who are to blame that Croatia lacks the money required for reforms.

The HDZ's hullabaloo

NACIONAL: How will you defend yourself before the parliamentary inquiry into the INA privatisation?
ECONOMIC REFORM was on the table at a meeting recently held at the SDP headquarters with the head of the Croatian Employers' Association Damir Kustrak, Ivica Mudrinic and Emil Tedeschi- It will not defend myself. I have no reason to do so. Do you know what the accusations of the HDZ towards the Ivica Racan government and myself as president of the INA supervisory board are? The HDZ has accused us that we worked untransparently, without public oversight, that we did a bad job of it and that we gave the Hungarians too many rights in INA. Of these four accusations we have now only the assessment that we gave the Hungarians too many rights because with a 25 percent stake in the ownership they were afforded the right of veto on strategic decisions.

NACIONAL: Why did you do so?
- It is customary practice when you have a strategic partner, and in return MOL accepted INA's strategic policy. That we were right is demonstrated by the fact that since 2003 the Hungarians have not once tried to use the power of veto and the supervisory board has made all decisions unanimously. That means that the Hungarians have been a responsible partner and the question is whose fault it is that we have not to date modernised the two refineries. The HDZ governments led by Ivo Sanader and Jadranka Kosor are to blame, as they did not know how to run INA. It is a classic case of the HDZ creating a hullabaloo with the aim of creating the impression among the people that politicians are all the same. As you can see - we are not.