INTERVIEW-Croatia determined to join euro zone despite crisis                                                                                                                                                                                                                                       Reuters - 09/09/2011 16:11:42                                                                                                                                                                                                                                                                                                                                                                                                      
* FinMin: no second thoughts on Croatia euro zone entry 
* Seeks private investments to help restore growth 
* Wants to remain as FinMin if her party wins Dec polls 
 
By Gabriela Baczynska  
KRYNICA, Poland, Sept 9 (Reuters) - 
Croatia is determined to  eventually  join the euro zone after its expected entry to the  European Union in  2013, although the debt crisis in the currency  bloc makes it difficult  to estimate a timeframe, its finance  minister said on Friday.
"The euro is a natural choice for Croatia since banks' and  corporate  balance sheets are now mainly in euros, 80 percent of  retail deposits  are in euros or other foreign currency," Martina  Dalic told Reuters on  the sidelines of an economic forum in  Poland.
"Of course, I think the monetary union needs more rethinking  and  reforming, taking into consideration the experiences of the  last 10  years, but we don't have much room for second thoughts. The fate of the  euro will be the fate of our banks," she added.
Dalic said the former Yugoslav republic did not yet have a  detailed  euro road map and said the euro zone's debt problems,  which have forced  Greece, Ireland and Portugal to seek EU/IMF  bailouts, meant it was  difficult to say when Croatia could join.
"But at the end of the day, our goal in the EU is to  eventually join  the monetary union. The economic features and  circumstances of the  country are such that Croatia is a natural  candidate," she said.
RESTORING GROWTH  
Like many euro zone members, Croatia has been struggling to  restore  growth after its economy contracted over the last two  years. This year  the government forecasts growth of 1.5 percent,  higher than analysts'  and the International Monetary Fund's  forecast of just 1 percent.
"The 1.5 percent is a forecast. I don't see a  major difference between  1.3, 1.5 and 1.7 percent. The basic  message is that the economy will  grow after two years of  negative growth and we see recovery in  industrial production,  personal consumption, retail trade and exports,"  Dalic said.
Dalic said the conservative government of Prime Minister  Janka Kosor's  HDZ party expected that public investment would  help revive private  investment and that entry to the EU would  also attract more capital  into the country.
"Our budget has been executed in line with the plan and our  goal is to  execute it without any revisions, in particular  revisions that would  produce a higher deficit. The trends in the  months behind us support  that," Dalic said.
Zagreb targets a budget shortfall of 5.1 percent of gross  domestic  product this year. Analysts forecast a deficit of 5.9  percent of GDP. (
news)  
Dalic said Croatia had met all of its overseas borrowing  needs for 2011  and planned one more domestic bill tender this  month to roll over a  maturing debt tranche worth 300 million  euros.
Asked if she would like to continue as finance minister if  HDZ wins an  election due on Dec. 4, Dalic said: "If HDZ wins the  elections, that is  sure."