Croatia experienced zero economic growth in 2011. Per capita income was stagnant at $18,400.00. Same as 2010, down from $18,600 in 2009. The economic picture in Croatia is bleak. I know this, Croats know this, now you know it. But what does the government do? They raise taxes! The value added tax was increased from 23% to 25% in 2012. Now they are proposing to raise property taxes. The Finance Minister is saying that the goal of raising taxes is to increase revenue to a point where the government can lower payroll taxes, thereby making Croatia more attractive to foreign investment. Really? Taking more money out of the economy should result in lower spending, and lower growth. Why do this now? Why not cut payroll taxes first, increase consumer spending with the excess stimulus, attract foreign investment and THEN raise taxes? What am I missing? If anyone out there in the blogosphere can explain why the current Government is set on this current path as opposed to the one I, and I assume many other (actual) economists have proposed, can you please enlighten me?