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Page last updated at 03:47 GMT, Saturday, 15 November 2008

Crisis squeezes Croat Christmas

Croatian Prime Minister Ivo Sanader
Sanader last Christmas...

The Croatian government has banned Christmas and New Year parties in the public sector because of the global financial crisis.

State-run firms and organisations have also been told that they won't be allowed to dip into their funds to buy Christmas presents.

The ban follows a proposal to freeze public-sector salaries next year.

Prime Minister Ivo Sanader said there was no need for panic, but the country had to be serious.

Croatian Prime Minister Ivo Sanader
... and this Christmas
"For that goal we forbid buying of Christmas and New Year's gifts as well as organising of Christmas and New Year's receptions," said Mr Sanader.

"I believe that with the proposed measures ... we can avoid a deeper crisis within the next year," he added.

The government has promised to balance the budget in 2009.

If this is achieved, it will be for the first time since Croatia became independent of the former Yugoslavia in 1991.

Croatia is heavily reliant on earnings from its tourist industry and there are fears that visitor numbers will drop sharply next year.

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