Our Croatian correspondent Vortac sends this follow-up on last night’s post about the referendum on Croatia’s accession to the EU:
I would guess the situation is probably more or less the same in all other ex-communist European countries, which, like Croatia, probably joined the EU for the same reasons.
The all-corrupting aspect of the welfare state is to blame here, since it’s almost impossible for any government to remain uncorrupted when it’s raising (and distributing) billions of unearned dollars in the form of credits and loans. In the case of Croatia, a good part of that money was used to support the welfare paradigm, meaning it was spent on pensions, social benefits, and on a huge state administration.
The ratio between the employed and pensioners in Croatia is about 1.2:1 now, meaning the number of pensioners almost equals the number of the employed, which is of course unsustainable. We also have to bear in mind that many of the employed are in fact working in the public sector, meaning they are by and large also supported out of the state budget, and are not really contributing to the economy.
In effect, we have created a super-welfare state here in Croatia, even worse than in the EU, and of course it’s very hard for the electorate to vote against it, since almost everyone is made dependent, which in turn creates the need for even more debt and even more loans — again resulting in even more corruption.
Since 2009, negative trends persisted in Croatia with jobs in the industry declined further by 3.5%. Number of unemployed and retired persons combined exceeded number of employed in August 2010, as it fell to 1.474 million.
The Croatian Times:
The Croatian public sector employs a quarter of the country’s workforce or 400,000 people, a study by Zagreb-based Institute of Economics and Friedrich Ebert Foundation shows.
As a result the present ratio of dependent to employed is almost 1:1 and Croatia has the youngest retired population (the average age is 50 years).
Croatian officials, who have launched a pro-EU campaign ahead of the referendum, warned that a “no” vote would deprive the country of the much-needed accession funds, and that even the payment of pensions for retirees and war veterans could be in jeopardy.
“If citizens vote against Croatia’s EU entry, “the first response will probably be a downgrading of our credit rating, and the second an assessment of Croatia’s investment security, given that EU membership is also a measure of security for economic activities,” said Pusic [Vesna Pusic is the Croatian minister of foreign affairs] who joined a rally which her Croatian People’s Party (HNS) held in downtown Zagreb today.