Croatian mathematician, Toni Milun on financial illiteracy and economic problems

Toni Milun is surprised by how much the population does not know basic economic concepts

by Sead Dedovic
Croatian mathematician, Toni Milun on financial illiteracy and economic problems
© N1 Youtube Channel

Toni Milun, a famous Croatian mathematician, was a guest on N1 television and talked about current topics in the world of finance. Milun is surprised by how much of the population of Croatia (as well as Europe and the world) is financially illiterate.

Many do not know how to balance the main economic terms. "Financial literacy has three parts. Financial knowledge shows constant progress. Before we had 60 percent correct answers, then 65, now we have reached 70 percent correct answers.

It is crucial that people learned what inflation is, but, unfortunately, we learned it the hard way. There is a very big shift," said Milun, as quoted by N1 Toni Milun is also concerned about austerity, which represents a huge problem for citizens.

Although the time of crisis has come, which has been going on for some three years, the majority of the population still does not save, and they believe that the situation will improve in the next period. "About 86 percent of citizens say that they pay their bills regularly, 70 percent of them think carefully before buying something, and less than half have any long-term goals.

Our behavior is not very good, as is our attitude towards money. We would all spend today, we would not save," he continued.

Toni Milun on education

He believes that the people must be better educated about finances, savings and important issues of the economy.

"It is interesting that there is no connection between these three sizes. Let's say, we mathematicians have knowledge about financial literacy, but that doesn't mean we will behave better. Those who behave well, does not mean that they have knowledge.

So, we have to work on all three components", said Milun. Permitted deficit is also an important topic in Croatia. Milun explained the whole process. "The permitted deficit is very strictly regulated and there is some kind of calculation that it should be somewhere around nine percent when the interest rate when we are in the deficit and the fee that the banks use for keeping accounts are added.

Tacit, on the other hand, has one limitation, but it's much more lenient. Which means that if we are in silent overdraft, we pay higher interest. What happened? Unbeknownst to us, the banks canceled what was allowed and put everything on the line, raised interest rates and fees. When the CNB noticed this, it said: 'Wait a minute, let's make an agreement,'" says Milun.