Search

 

Cablegate: Embassy Comments On Icras Rating Reveiw for Croatia

This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS ZAGREB 001646

SIPDIS


SENSITIVE

TREASURY FOR VIMAL ATUKORALA
STATE FOR EB/IFD/OMA LIAN VON WANTOCH AND EUR/SCE CARI ENAV

E.O. 12958: N/A
TAGS: EFIN ECON HR
SUBJECT: EMBASSY COMMENTS ON ICRAS RATING REVEIW FOR CROATIA

Sensitive but Unclassified -- please protect accordingly.

1. (SBU) Embassy Zagreb supports proposal to maintain
Croatia's ICRAS rating on sovereign debt at the current C
minus, and to increase the non-sovereign risk rating to C
minus.

2. (SBU) While the fiscal and current account deficits
warrant close monitoring, and the failure of Croatia to
complete its last Stand-by Arrangement must be recognized, we
agree with the drafters of the Country Risk Assessment Report
that Croatia is at a different place economically and
politically than it was in 2001, when the ICRAS ratings were
last determined.

3. (SBU) We would stress the following factors:

-- The banking sector has been revamped since the beginning
of the decade, and is one of the most open and sophisticated
in the region. Central Bank measures to slow the inflow of
money to the banks -- flows that have fueled an import boom
-- appear to be working.

-- The worst of the fiscal deficits (2003) and current
account deficits (2002) appear to be behind us, and should
the government keep close to its announced targets, the twin
deficits should be under control. (The ability of the new
government to keep to its ambitious budget targets remains
untested. Should Croatia be unable to keep the current SBA
on-track, the ratings might need to be revisited.)

-- The beginning of EU negotiations early next year and the
desire of the government to close the gap between its
accession track and those of Romania and Bulgaria will
provide a powerful incentive for the GOC to ratchet down the
deficits. The EU has been a very effective proponent of
Croatia keeping within an IMF program and the fiscal
discipline that encourages -- it was key in causing the new
government to pursue a new agreement.
FRANK


NNNN

© Scoop Media

 
 
 
World Headlines

 


Euro Med Monitor: Syria Cross-border Aid Mechanism Extension Is Necessary For The Survival Of Millions

Permanent members of the UN Security Council should extend the cross-border aid to northwestern Syria, Euro-Med Human Rights Monitor said Tuesday in a statement...
More>>


Commonwealth Secretariat: Island Nations Urge Commonwealth Leaders To Bolster Ocean Climate Action
Small island nations are calling for strengthened global support for ocean and climate change action, just days before Commonwealth leaders convene in Kigali, Rwanda... More>>



Climate: ‘Surprise’ Early Heatwave In Europe, Harbinger Of Things To Come

Sweltering conditions in Europe have come earlier than expected this year but the bad news is, they’re the shape of things to come... More>>


World Vision: Deeply Concerned For Thousands Affected By Afghanistan Quake
World Vision is deeply concerned about the deteriorating humanitarian situation in Afghanistan in the wake of a powerful earthquake in the early hours of this morning... More>>



Malaysia: UN Experts Welcome Announcement To Abolish Mandatory Death Penalty

UN human rights experts* today commended an announcement made by the Malaysian government that it will abolish the country’s mandatory death penalty and encouraged Parliament to take concrete steps to pass the agreement into law... More>>


Ukraine: Bachelet Briefs Human Rights Council On Mariupol
Excellencies, Further to Human Rights Council resolution S-34/1 adopted at its 34th Special Session, I present you with an oral update on the grave human rights and humanitarian situation... More>>