The government's austerity policy and the cost-cutting policy in the public sector is wrong and has failed and is not helping the country to recover from the crisis, a trade union leader Vilim Ribic told a news conference in Zagreb on Wednesday.
Ribic convened today's news conference following the release of a document in which International Monetary Fund's chief economist Olivier Bianchard and researcher Daniel Leigh that the Fund had considerably underestimated the negative effects of the austerity on European economies. According to a working version of their report, Bianchard and Leigh admitted that IMF forecasters had underestimated the possibility of rising unemployment and declining domestic demand in correlation to fiscal consolidation.
The unionist accused the current and former Croatian governments of pursuing the "neo-liberal fundamentalism of the IMF"
He warned that excessive consumption contraction caused counter-effects and failed to pull the country out of the crisis. The result of reduced consumption had lead to a contraction in production and trade, leading to a rising jobless rate, he explained.
Ribic said that the Matica federation of public-sector trade unions has been persistently warned against excessive austerity.
The government's measures has fiercely hit the living standards of public-sector employees, being unaware that in this way society on the whole is being weakened, he added.
