The beginning of a long and dark road - parallel from the past

Yesterday evening myself and my Dad got discussing a friend and mentor of mine who passed on 2 years ago this month. He was one of the bravest and most astute figures I'd ever met and make economics and politics sounds massively interesting. A story he told me, which he mentioned in passing in a paper to a lecture the year he passed in Ireland.

He was President of the Croatian National (Central) Bank before the outbreak of nationalism and independence. He was summoned to Belgrade to sign away Croatia's fiscal autonomy, was the only bank head to refuse (thus scuppering the deal) was attempted to be arrested by the UDBA (Yugo KGB) and barely made it back to Zagreb - the Slovenian rep couldn't travel as Ljubliana was being bombed at the time.

Of course when war erupted and Croatia had declared full independence, the old dictator Tudjman was immediately inundated by offers to make the country rich - Keynesian ideals and get rich quick schemes abounded and Ante Cicin-Sain stood against this. The deal was this.

a) A number of individuals had come to gather large amounts of property and land - almost entirely due to their working in Germany and Austria and re-investing in Croatia, Yugoslavia had looser restrictions than the rest of the east and had opened up to mass tourism for 2 decades prior to war. These individuals were not allied to the ruling party and would have been quite progressive.

b) The slime surrounding the old Communist party who formed the Croatian National Union (HDZ) had power but no money or land - Croatia was pretty much broke.

c) Tudjman and his buddies decided to nationalise all lands, taking them into a National Land Bank. The excuses used was that anybody holding a loan over a certain amount (1,000,000DM) would have to prove they could repay it as the government secured the local banks.

d) The value of land and property was floored and those who had worked to earn their possessions were completely ruined, with their loans taken over and lands lost.

e) The Croatian government attempted to get something called "high powered money", as it was then called, better known as an IMF bailout. Cicin-Sain resisted this and went instead to some friendly German banks who loaned the country enough to fund them for a year - the massive funds arriving into the country from Croatian diaspora in the USA, Canada, Australia etc to support the war effort, were re-routed to the pockets of the HDZ and their friends.

f) Cicin-Sain was shafted and moved sideways to Brussels and later to London and Dublin. The inmates took over the asylum and gold, cash and diamonds were taken in trucks from the treasury to disappear into the night. Croatia was broke and the IMF landed in town.

g) Apart from social spending, the HDZ elite and their friends bought the property in the NLB for almost nothing, and created the bubble that blew on the Croatian coast 2 year ago.

h) The former PM (a decent enough sort, friend of el Bertie and notoriously expensive gift receiver) has a warrant out for his arrest and is believed to owe in excess of 1billion euros in loans from Croatian banks.

The point of this meandering monologue is that parallels can be drawn from what happened and is happening here in Ireland.

Many of the developers in NAMA can service their loans and are being dictated to by some people who are completely unsuited to their role, not to mention being driven along by the ruling elite.

The EU and IMF (as correctly on another thread) are giving us a high interest loan (the previously called high powered money) and there are strings attached, as there were in Croatia. Croatian post and telecommunications had to be sold off, with disastrous consequences. Croatian electricity is partially privatised and one of the most expensive and poorly run organisations in Eastern Europe.

The old non-aligned elite have been/are being removed, or put in their place, and the old crew are creeping back in.

Croatia since 2003 has moved further away from EU accession and lots of this has been down to complete and utter dislocation in society and infrastructure. No control on tourism, prices and development have made it even worse, and the original gastarbeiters made good, had the last of their holding wiped out when the government passed a law regarding building permits and locations. To date more than 1,000 villas have been selectively demolished along the coast (especially in Rogoznica, Primosten and Marina), each property destroyed (which was against national and international law) had been built under the brief SDP government, half of the owners have taken their cases to the EU and European Court of Human Rights.

Now maybe I'm just being overly dramatic about this, but I can almost sense something coming down the line that isn't a million miles away from this.

Certain aspects of this will come home to roost here. The selling of strategic assets at the behest of the eu is what I most fear. I don't agree that doing certain things under the guise of competition is always right. As you mentioned about the selling of Croatian p+t that's what's coming to us if esb and bord gais are sold. We all saw eircom.