Deputy Prime Minister Milanka Opacic announced that some of the poorest communities in Croatia will have their debt cancelled

Deputy Prime Minister Milanka Opacic announced that some of the poorest communities in Croatia will have their debt cancelled

A plan has recently been drawn up to cancel the debt of 60,000 of Croatia’s poorest citizens. This has been done in order to allow people to have a fresh start, especially those who are in debt and don’t have any assets. This also includes tax debts and government fines.

Under the plans, debtors must have no savings or property, and have a debt under five thousand dollars. They will be given a chance to have a new start without the burden of debt. The measures will only affect about 1% of the country’s entire economy, but will still wipe clean nearly $31 million worth of debts, according to Deputy Prime Minister Milanka Opacic who announced the measures in a recent press conference.

Many economists have warned that this plan could have unintended consequences in the future. Dean Baker, co-director of the Washington-based Centre for Economic and Policy Research, told The Washington Post, “The plan could result in higher interest rates when poor people want to take out loans in the future. I am not sure that this is the best way to help low-income people. If lenders think this can happen again they will charge very high-interest rates to low-income borrowers.”

This debt cancellation is a great move to help poorer citizens living within a democratic country. But what will happen next? Will Greece decide to do the same? A country high in debt and still negotiating how to become debt free is certainly an interesting one, as Europe tries to redefine its debt problem, and make life easier for all its citizens.

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