in interest ) will amount to eur 9. 6 billion ( eur 10. 8 billion in 2009 ) ; and − total utilisation of foreign sources of financing will stand at eur 12. 6 billion ( 13. 5 billion in 2009 ). the anticipated fiscal deficit reduction, in terms of consolidated general government ( including hac ), from hrk 15 billion to hrk 12. 1 billion, i. e. from 4. 5 % to 3. 6 % of gdp, with the deficit being predominantly financed by foreign borrowing, would slow down government demand for domestic borrowing. the growth in government demand for credit could decrease from this year ’ s 32. 7 % to about 6 %. however, even with this relatively low growth rate, there will be little room for the rechannelling of banks ’ domestic credit potential towards the private sector. the situation can be further aggravated by shipbuilding, which is not included in these estimates, but can nevertheless affect the budget and its borrowing in 2010. ( x ) under such circumstances, monetary policy will have to balance between reducing the current account deficit and providing for the aggregate domestic credit growth accompanied by exchange rate ( foreign exchange reserves ) stability. consequently, we expect to continue implementing the existing instruments ( foreign exchange interventions and open market operations ), for now, without changing the reserve requirements ( because of the favourable liquidity situation in the banking sector ), or relaxing the prudential measures, as well as without raising regulation costs. we anticipate that total liquid assets, money supply and bank placements will increase by about 7 %, 4. 5 % and 4. 4 % respectively. ( x ) bank behaviour it can be expected that the following trends, observed in the previous part of the current year, will continue into 2010 : stagnation in high foreign sources of financing ( standing at eur 10 billion, of which about eur 2 billion represents short - term inflows from parent banks in late 2008, which remained in the country throughout the year ) and a very slight increase in domestic deposits ( by 3. 2 %, suggesting that there is no potential for any significant strengthening of banks ’ credit activity ; gradual extension of the maturity structure of both foreign sources ( 62 % – 68 % ) and domestic ones ( 73 % – 77. 4 % ), which is good in terms of safety, and facilitates longer maturity placements, but these sources are more expensive ; an increase in the foreign - currency portion of

can obtain new loans from abroad. in this respect, the current world situation is favourable, because free liquidity grows again and waits to be placed, credit supply goes up and buyers are sought for this money. a continuation of eu accession negotiations improves the political perception of croatia as a debtor. therefore, i have no doubts that the current search for a billion dollars, or euros or whatever, will be successful. this is a relief, but it also poses the most serious dangers to this country : the danger of inactivity, the danger of believing that we can go on functioning by following the established routine and the danger that we neither have learned, nor will learn enough from the crisis. it is often repeated that our problems are of a structural nature and that it takes time to carry out the necessary reforms. this statement is not unfounded. however, an old chinese wisdom says : “ even the longest way starts with the first step. ” the truth is that the first step is often the most difficult, and we have been putting it off for a long time.