Croatia proposes a new cabinet that faces a troubled economy

By Igor Ilic ZAGREB (Reuters) - Croatia announced on Thursday the members of a new centre-right cabinet whose main task will be to repair the country's public finances and restore economic growth after years of recession. That task will fall mainly to the new finance minister, Zdravko Maric, and the new economy minister, Tomislav Panenic. They will have to cope with public debt near 90 percent of gross domestic product and a 2015 budget deficit expected to come to around 4.5 percent of GDP. They will also have to cope with Brussels, which wants Croatia, the European Union's newest member, to pursue fiscal consolidation. Their main advantage will be an economy finally starting to grow, by about 1.5 percent in 2015, after a six-year recession wiped out some 13 percent of output. The Prime Minister-designate, 49-year old businessman Tihomir Oreskovic, will seek parliamentary approval for his cabinet on Friday. The new Croatian government was formed by a coalition of the conservative HDZ party and the small reformist Most (Croatian for "bridge") party, after an inconclusive Nov. 8 election. Oreskovic, a Canadian-raised former financial officer at an Israeli pharmaceutical company, was nominated as a technocrat prime minister who could focus on the country's financial and economic problems. "We've chosen a very good team which is a healthy mix of the people from business, academic circles and the public sector," Oreskovic told reporters. Maric, the future finance minister, was a state secretary in the finance ministry during a previous HDZ government. In the past four years, he worked as a senior executive in Croatia's largest company by earnings, food concern Agrokor, and was in charge of capital markets. The incoming economy minister, Panenic, was the mayor of a municipality in eastern Croatia. Tomislav Karamarko, the HDZ leader, said earlier this week that Croatia needed fiscal consolidation worth an annual 4.5 billion kunas ($640.58 million), or close to 1.5 percent of GDP. The new budget must be approved by the end of March. (Reporting by Igor Ilic)