Minister of Finance Ivan Suker of Croatia

Suker met with the Assistant University Marshal, Jill Chamberlain, for a courtesy call, and then later gave a speech at the Kennedy School of Government entitled Croatia - Achievements, Challenges, and EU Aspirations of a Small State.

Croatia will raise the portion of salaries not subject to tax and set aside funds to soothe price spikes in basic commodities and services to counter inflationary pressures, Finance Minister Ivan Suker said last week.

Suker said the non-taxable part of the salary would from July 1 be raised to 1,800 kuna ($386.

Suker said the measures would not be of a palliative or one-off nature, but rather dynamic, adjustable over time and sustainable for fiscal policy.

The world finance market acknowledges the good economic and financial trends in Croatia and that the country's high external debt does not pose a problem because Croatia can service it, Finance Minister Ivan Suker said in Washington on Saturday.

Suker said the external debt amounted to 25 billion euros but that Croatia could take it.

Suker said the confidence of the finance market at which the country borrowed was the best indicator that Croatia could cope with its debt.

Speaking of bilateral trade, Finance Minister Suker said Spain's exports to Croatia amounted to some 300 million US dollars, while Croatia's exports to that country came to some 42 million dollars.

Speaking at a government session, both Sanader and Suker said that it was contradictory that Croatia, ranked second in Europe and seventh in the world according to reforms, should move up only ten places on the World Bank list on business conditions.

In its letter to the World Bank, Finance Minister Suker said that Croatia had carried out a number of reforms over the last year, starting with the Hitro.

Sanader and Suker were speaking about the World Bank report in the context of the government's approval for the Croatian Power Industry (HEP) to seek a 24 million euro loan from the World Bank for a heatingproject, which Suker said was one of the government's reforms.

But Suker said the government and all businesses would have to work hard to achieve that.

Finance Minister Ivan Suker said the main challenge was to find funds to finance the deficit and service maturing debt, particularly given Croatia's high external imbalances.