Speaking in an interview with Croatian Radio, Linic said that it was necessary to remove all those who were hired because they were politically suitable to the previous government, in order to invest in job creation.

"Simply put, we expect next year to be much harder, which means that life will be expensive and very hard," Linic said, announcing plans to reduce the number of employees in state-owned companies and to cut costs at all levels in the state budget.

He stressed that, despite the difficulties, the government would not give up its plan to put public finances in order, cut costs and strengthen tax discipline in order to avoid the country's rating being downgraded to junk status, which would make the already difficult situation even more difficult.

Linic said he was confident that Croatia did not need the International Monetary Fund's (IMF) assistance at the moment. "If you ask me, we don't need the IMF, I don't see any need for it, because the government of Prime Minister Zoran Milanovic is acting responsibly and it won't allow any irresponsible behaviour to stand in its way. We have the courage to carry through what we have agreed with the trade unions and to enforce discipline among taxpayers, especially among irresponsible businesses. We won't be intimidated by anyone."

When asked if a request for the IMF's assistance would mean that the government failed, Linic said that he would consider the government to have failed only if state investments did not proceed as planned. "In that case we would be to blame for the economic downturn. But if we talk about why employers are not launching investment projects, while we have created favourable conditions for doing business, then we really have to see if it is the government's responsibility or the economy is not strong enough and survives on loans and not paying taxes."

"But if the question is when the government might call the IMF, then I say very clearly that it's possible that we will lose the rating and at that moment it will be very difficult to service our debts without the IMF. If we don't service our debts, we will have problems both with domestic consumption and with budget performance," the minister said.

Linic partly blamed the absence of investment results on former management boards of state-owned companies, adding that new management boards were now trying to make up for the lost time.

Linic rejected speculations that the ministries were lacking money for salaries, stressing that budget payments were not late either to the ministries or the creditors. He said that his ministry had given clear instructions to the other government departments on how to implement the restrictions and keep their operations within the budget.