EU taking action against Croatia for deficit


Zagreb is facing a 2016 deadline from the EU to reduce its deficit to 3 percent of GDP. In other business news: Turkey is taking steps to strengthen its lira; Greek factory activity grows for the first time since 2009.

The EU wants Croatia to reduce its deficit by 2016. [AFP]

The European Union launched disciplinary actions against Croatia over its excessive budget deficit. The country was given until 2016 to bring its deficit from 5.5 percent to 3 percent of GDP.


Turkey's central bank announced a sharp hike in the country's borrowing rates from 3.5 percent to 8 percent, while the lending rate increased from 7.75 percent to 12 percent. The decision aims to boost the local currency that has been sliding rapidly amid local political woes stemming from a corruption scandal.


Serbia's early parliamentary elections on March 16th will cost almost 10 million euros, the government said. The estimate is based on the calculations of parliamentary experts. The funds will come from the budget reserve.


Greek factory activity in January marked its first growth since 2009, when the country fell into deep financial crisis. Markit's purchasing managers' index for manufacturing rose from 49.6 percent to 51.2 percent in January from the previous month.


The Bank of Cyprus, the country's biggest creditor, released 950 million euros in six-month certificates of deposits that were locked as part of the country's bailout. The move was welcomed as a sign of stability and is aimed to strengthen trust in the local banking sector.


Romania aims to become part of the Eurozone in 2018-2019, President Traian Basescu said. He expressed confidence his country will be able to qualify for adopting the European currency this year, but would need time to improve its economic competitiveness.


The IMF approved a disbursement of 48 million euros to Bosnia and Herzegovina (BiH) as part of its latest review of the country's 385-million-euro loan programme. The fund also agreed to extend BiH's programme by nine months and add 154 million euros to the loan.


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Montenegro dropped plans to allow foreign investors in the country to benefit from local citizenship. Authorities said the measure, which would have given local passports to foreigners who invested at least 500,000 euros in the country, was scrapped following pressure from the EU, according to media reports.


The IMF urged the Bulgarian government to pursue structural reforms aimed at accelerating growth, creating jobs and enhancing productivity. In its annual review of the country's development, the fund praised the country for maintaining financial and macroeconomic stability despite challenges inside and outside of its borders.

(Various sources -- 30/01/14--05/02/14)

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