Starting Monday, thousands of Croatia's poorest citizens will benefit from an unusual gift: They will have their debts wiped out. Named "fresh start," the government scheme aims to help some of the 317,000 Croatians whose bank accounts have been blocked due to their debts.
Given that Croatia is a relatively small Mediterranean country of only 4.4 million inhabitants, the number of indebted citizens is significant and has become a major economic burden for the country. After six years of recession, growth predictions for Croatia's economy remain low for this year.
"We assess that this measure will be applicable to some 60,000 citizens," Deputy Prime Minister Milanka Opacic was quoted as saying by Reuters. "Thus they will be given a chance for a new start without a burden of debt," Opacic said earlier this month.
To be eligible, Croats need to fulfill certain criteria: Their debt must be lower than 35,000 kuna ($5,100), and their monthly income should not be higher than 1,250 kuna ($138). Those applying for the scheme are not allowed to own any property or have any savings.
In pictures: Top 10 safest cities
In pictures: Top 10 safest cities
1/8 2. Singapore
One of just three city-states in the world, along with Monaco and Vatican City, Singapore boasts very low crime rates: in 2012 there were 80 days straight without a single robbery reported. This proud nation prints the entire national anthem on the back of its $1,000 notes, and is home to the first “Hug Me” Coca-Cola machine, which dispenses bottles of pop when hugged. Wow.
2/8 3. Osaka
The second Japanese city in the top ten safest list, Osaka enjoys a similar atmosphere of calm to its more famous older sister, Tokyo. It is home to Universal Studios Japan and an entire Manga shopping district, “Den Den Town”.
3/8 4. Stockholm
The safest European city is also one of the richest, among the top 10 regions in the continent by GDP per capita. It also hosts the annual Nobel Prize for literature, medicine, physics, chemistry and economics, but contrary to the city’s harmonious atmosphere, the Peace Prize is the only Nobel awarded elsewhere, in Norway’s Oslo.
4/8 5. Amsterdam
A famously liberal attitude towards drugs and the sex trade obviously hasn’t had a detrimental impact on Amsterdam’s safety: it’s in the top five safest cities in the world. Just watch you don’t fall into a canal after indulging in one too many “brownies”…
5/8 6. Sydney
Ironically where Britain once sent its criminals, people now leave in their droves to live in safe Sydney, famous for offering a healthy, outdoor lifestyle and home to a certain opera house. Perhaps all that sunshine has something to do with it?
Tourism New South Wales
6/8 7. Zurich
This city has a relatively small population, and has infamously low tax rates, which might go some way to explain its place in the top safest cities in the world. It’s also often named as the place offering the best quality of life. Lucky old Zurich.
7/8 9. Melbourne
The second Australian city in the top ten for safety, Melbourne is rated the highest in “liveability” in the whole world. In the same survey last year it scored perfect rating for healthcare, education and infrastructure.
8/8 10. New York
Perhaps one of the more surprising on the safety list is The Big Apple, which actually scores pretty badly in terms of “liveability”. Contrary to its violent reputation, at least in Brooklyn and the Bronx, violent crime has been dropping since 1990, and last year saw the lowest number of homicides since records began in 1963.
Although the program is expected to cost up to 210 million Croatian kuna ($31 million), according to Austrian press agency APA, the Croatian government expects economic long-term benefits that will outweigh the short-term investment. Prime Minister Zoran Milanovic has convinced multiple cities, public and private companies, the country's major telecommunications providers, as well as nine banks to clear some of their citizens of their debt. The government will not refund the companies for their losses.
Overall, the debt of all Croats amounts to $4.11 billion -- and the debt that is about to be wiped out accounts for less than 1 percent of that. However, for those who are eligible the agreement will make a significant difference by enabling them to gain access to their bank accounts. By reducing debt by less than 1 percent, Croatia frees nearly 20 percent of the country's debtors from their obligations.
Some economists, among them Baker, are skeptical whether the scheme will succeed: "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," Baker said.
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