Social Impact and Social Mitigation of Enterprise Restructuring : Implications for Croatia

Abstract

This report provides an overview of social impact and social mitigation measures that have been addressed in World Bank supported enterprise restructuring programs in Europe and Central Asia. The focus is on lessons learned from the experience elsewhere in the region that could provide guidance to and policy options for Croatia in the on-going process of enterprise restructuring. The first stage of transition focused on the establishment of market-driven, private sector-oriented economies. In recent years, the requirements of European integration and accession have led to an emphasis on fiscal discipline. Closer attention has been paid to implicit subsidies such as budgetary credits, nonpayment of taxes and accumulation of tax arrears, transfers from off-budget funds, and government payment of guaranteed loans. European Union candidate countries have faced similar policy challenges in mitigating the impact of unemployment due to structural shifts in the economy.