The small eastern European nation of Croatia has decided to let Christmas come early for its poorest citizens: Under a new initiative aimed at giving them a fresh start, the government is wiping out their debts, leaving some observers to relate the move to an ancient Biblical pattern indicating a looming financial collapse.
As reported by Agence France-Presse (AFP), the "Fresh Start" program will help tens of thousands of Croatians become liberated from crushing debt, leaving them with a clean slate.
AFP further reported:
Around 60,000 people with debts of under 35,000 kunas (4,500 euros, $5,300), whose bank accounts have been blocked for more than a year, are expected to benefit from the one-off scheme, which came into effect [February 1].
Those who benefit from the debt amnesty will have what they owe telecom companies, large banks, four municipal governments, a number of public utilities and the country's tax authority exonerated.
"This is a social measure of which we are proud," said Prime Minister Zoran Milanovic, in announcing the program. He went on to stress that the program, which is anticipated to cost about €46 million, was a one-time "emergency" measure that the country could not afford to do again.
An election year ploy, or is something far more ominous taking place?
Since the country's breakaway from Yugoslavia following the collapse of the Soviet Union and a resultant war with neighboring Bosnia and Serbia in the early 1990s, Croatia's economy has experienced low growth and high unemployment.
"We are doing everything possible to facilitate the lives of people affected by this long and exhausting crisis," Milanovic stated.
In order to be eligible for the debt-forgiveness program, Croatians must either be on a social welfare program or be earning no more than €166 a month. Also, they must not have any savings and they cannot own a second home.
"I'm looking forward to it. This is a bright note in this country," Lucija Tomljanovic, a single mother of four who planned to apply for the debt relief, said in an interview with state-run HRT television, from the coastal town of Zadar.
By December, AFP reported, more than 322,000 Croatians had their bank accounts frozen because they had so many unpaid bills. In all, combined debts amounted to €4.1 million (as of this writing, €1 was equal to $1.15).
The chief economist with Societe Generale Splitska Banka, Zdeslav Santic, says he thinks the move will spur an economic recovery.
"It could help socially endangered people and give a boost to partly revitalise personal spending," he told AFP, though he said the program should only be a one-time offer.
But a group representing 10,000 Croatians whose bank accounts have been frozen have criticized the bail-out program, noting that only those who live in cities could take part in the bulk of the program's offerings. The group is instead calling for banking reforms.
"The government is throwing dust into the public's eyes," said Antun Rupa of the association, before tying the program to elections to be held later this year.
Main opposition conservatives made the same complaint.
"After... not showing even a bit of social empathy, they have suddenly discovered, in an election year, that they are a Social Democratic government and they should act accordingly," Zeljko Reiner, an official with the HDZ party, told AFP.
As for the Biblical pattern, reports Michael Snyder of The Economic Collapse blog:
Does a mystery that is 3,500 years old hold the key to what is going to happen to global financial markets in 2015? Could it be possible that the timing of major financial crashes is not just a matter of coincidence?
He references a recent book by Jonathan Cahn, The Mystery of the Shemitah: The 3,000-Year-Old Mystery That Holds the Secret of America's Future, the World's Future, and Your Future!, in explaining what the Shemitah actually is, noting:
In the Bible, the people of Israel were commanded to let the land lie fallow every seven years. There would be no sowing and no reaping, and this is something that God took very seriously. In fact, the failure to observe these Sabbath years was one of the main reasons cited in the Scriptures for why the Jewish people were exiled to Babylon in 586 BC.
But there was more to the Shemitah year than just letting the land lie fallow.
On the last day of the Shemitah year, the people of Israel were instructed to perform a releasing of debts.
This year is said to be a Shemitah year, which will end in September.
Read the rest of Snyder's column here.