In Croatia Bank rehabilitation is a very tricky business for various reasons. Thus, such decisions are often delayed. Without any attempt to be exhaustive, three groups of reasons are given below. Bank rehabilitation is costly. If the problem of bank rehabilitation is viewed as a redistributional issue than it is important to address the question of who will be worse off.
Additional funds are difficult to be found, especially in stagnating economies.
Foreign capital is reluctant to come, especially due to high country risk. Following this, the pr oblem of servicing the public debt becomes increasingly important. In spite of difficult conditions, Croatian Government has taken firm steps in both enterprise and bank rehabilitation by mid-October 1995. Of course, this is just a first step on a multy-year exercise in fundamental restructuring of the Croatian economy. Long term-macroeconomic stability .