ECONOMY

In Brief

Croatian police arrest 10 in corruption probe ZAGREB (AFP) – Croatian police said yesterday they had arrested 10 top business executives in connection with a corruption probe at the country’s leading food producer Podravka. «Those arrested include one manager from Podravka, while the nine others are directors or other managers from companies that have worked with Podravka,» police said in a statement, giving no further details. The local press said one of those arrested is a businessman close to former Deputy Prime Minister and Economy Minister Damir Polancec. Polancec resigned in October after the National Bureau for the Fight Against Corruption and Organized Crime began its investigation into Podravka, leading to the arrest of four top officials from the company. They are suspected of trying to acquire a 25 percent stake in Podravka with the company’s money, by means of financial transactions through the SMS food firm and the FIMA Grupa brokerage company. Media reports say they cost Podravka some -35 million. According to Podravka’s figures, in 2008 its revenue amounted to -512 million, while net profits were some -6 million. The company, which operates in Eastern and Central Europe was privatized in 1993 and the state owns a 26 percent stake. Fighting corruption is one of the key conditions for Croatia to satisfy if it is to succeed in joining the European Union by 2012. Poland to outpace Czech, Romanian growth Poland’s economic growth will outpace that of the Czech Republic and Romania this year, with Hungary’s gross domestic product continuing to shrink, Morgan Stanley said in a note today. The Polish economy will grow 3 percent this year and 2.5 percent in 2011, compared with 2.1 percent and 2.8 percent in the Czech Republic and 1.1 percent and 2.8 percent in Romania, according to Morgan Stanley. Hungary’s economy will shrink 0.9 percent in 2010 and grow 1.7 percent in 2011, it said. Ukraine’s economic growth will be 4.5 percent in 2010 and 2.5 percent in 2011, according to the note. (Bloomberg) Serbian wages Serbia needs to keep public wages and pensions frozen to ensure the release of the next payment of its International Monetary Fund loan, said Bogdan Lissovolik, the lender’s representative to the Balkan nation. «To the extent significant deviations from agreed policies emerge, corrective measures would need to be agreed during the next mission in February, before the release of the next tranche,» Lissovolik wrote yesterday in an e-mailed response to questions from Bloomberg. Serbia is going through its first recession since the 1999 NATO bombing, aimed at forcing the country’s troops to withdraw from Kosovo, destroyed most of its infrastructure. With investment drying up because of the global financial crisis and tax revenues dropping, the government obtained an IMF bailout loan. The government agreed to start an overhaul of the country’s pension system and public administration and to freeze pensions and wages in 2010 to allow for the disbursement of the third tranche of the 3-billion-euro standby loan, signed with the fund in March last year. (Bloomberg)