The government will soon revise the budget and its growth projection for this year from 1.8% to 0.7%, which means that budget revenues will be lower by about 1.2 billion kuna while expenses will also be cut to maintain the budget deficit at about 3% of GDP as planned, Finance Minister Slavko Linic said in an interview with Croatian Radio on Wednesday morning.
Linic said that this also meant cuts in salaries of civil servants, adding that their next salary would be calculated based on a pay scale reduced by 3%.
"Obviously everyone thinks that the government's projection of economic growth of 1.8% is unrealistic and needs to be reduced, because it is evident that we will be able to rely on government investments alone, since the private sector has assessed that it cannot make a considerable contribution to growth. This is the reason why the growth projection for this year will be revised down from 1.8% to 0.7%," Linic said.
"We have concluded that salaries should be somewhat lower in 2013 than in 2012. We have introduced a centralised calculation of salaries to ensure more order and greater control, and we expect to make savings. Earlier we agreed with the trade unions on Christmas bonuses, holiday cash grants, transport allowances and so on, but all that was not enough, which is why we have decided to reduce the pay scale by 3%," he said.
"This is yet another measure that goes against public-sector employees and it will certainly not be well received. This decision is a very clear message from the government that we are overindebted, that we are not managing to get the economy going, and under such circumstances we cannot spend money on borrowing. Our debt has reached 180 billion kuna and we are getting close to 60 per cent of GDP, which is why we have to cut salaries, but not pensions," Linic said, adding that salary cuts are not a matter for negotiation with the trade unions but a government decision that is non-negotiable.
