engleski

INFLUENCE OF ACCESSION TO EUROPEAN UNION ON PUBLIC DEBT OF REPUBLIC OF CROATIA

One of the most common problems in Croatia's economy for many years is the question of public debt. Over the past two decades excessive borrowing, followed by structural and economic changes of the state, lead to an alarming position of Croatian's public debt, and excessive borrowing proved to be a consequence of bad leadership in economic politics during recent years. Deficit that has been made had negative influence on every economic aspect of the state, and recent crisis and recession have worsened the situation, starting with GDP, lowering the investments, dropping the consumption and savings, excessive borrowing by the citizens, which have been left without primary incomes followed by the crisis. The state is also affected with emigration during the past few years, especially with younger population that is leaving the country, seeking better life and work conditions. All of the above leads Croatia to the position of the most undeveloped country of the European Union and to macroeconomic imbalance, although few positive changes are visible. Public debt that has been too high during the past few years has been overstated by the economic growth of the country, not only because of the loans, but also because all of that leads to many other negative consequences, like increasing public expenses due to the impossibility of it's payment, and slow fiscal policy was not able to improve economic activity, and because of all that, the country is exposed to numerous risks, especially on financial markets. After long time of constant fall of GDP and increase of the public debt, for the last few years some of the positive changes have been recorded, but they are still not enough to make the situation in the state satisfactory.

excessive borrowing, economic policy, gross domestic product, global competition, public debt, structural changes

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