"Optimism is all the prime minister has at this moment. There are no results," Linic told the press.

"The prime minister has been trying to say for a whole year now that the measures she has are producing results, but those results aren't good," he added.

Linic said the answer was what central bank governor Zeljko Rohatinski was predicting - that 2011 would be very difficult for both citizens and the economy, with a decline in activity and an increase in illiquidity and the number of both the unemployed and those who would not get a salary.

Linic said there were no investments or economic activity, that illiquidity was growing and that there was no anticipated seasonal employment.

Josip Friscic, president of the Croatian Peasant Party (HSS), a junior member of the ruling coalition, said at another press conference that Rohatinski, apart from presenting the state of affairs, should contribute to improving the situation.

Asked by the press if he believed Kosor when she said that the government's measures were yielding results, or Rohatinski, who said yesterday that Croatia's economic recovery would be long and slow, Friscic said he was optimistic and that the goals that had been set would not be achieved without optimism and contribution from everyone.

Friscic said Rohatinski could contribute by settling the issue of foreign exchange clauses and loans pegged to the Swiss franc, and ensuring coordination among banks in order to explain the risk of investing in Croatia.

The president of the opposition People's Party (HNS), Radimir Cacic, issued a statement following Kosor's press conference, saying that all economic parameters were poor and that Kosor had no reason for optimism.

Cacic said Kosor was not considering a budget revision despite a 30 per cent deficit growth. He said that 56,000 jobs had been lost over the past year, that illiquidity soared from HRK 28 billion to 36 billion, external debt increased by EUR 2.7 billion, GDP declined 1.4 per cent, and industrial output fell 4.4 per cent this month alone.

Cacic said it was necessary to balance expenditures and revenues and revise the budget, adding that this year alone Croatia would have to borrow EUR 18 billion for debt repayment.

He said the most important thing was to stop borrowing, but added that Croatia's biggest problem was not the external debt but the fact that its creditors thought the government was not doing its job and that it was going in the wrong direction.

Cacic said the government should step down and that Rohatinski had only "confirmed the facts and said everything that had been said by international financial factors."