"During the election process we promised nothing great, we did not make unrealistic promises, we only said that it would be difficult. The term (of government) formally lasts four years. We cannot solve things overnight," Milanovic said at a news conference in the coastal town of Umag on Saturday.

The results cannot be seen in two or three months but in a few years, PM Milanovic said.

Asked by reporters why the negotiations with public-sector trade unions failed, Milanovic replied that the negotiations had not failed but the public sector's unions had no clearly defined position.

"Once again I call, primarily, on trade union members, that is Croatian citizens who receive salaries on that basis... to be aware the current state of affairs in the country," Milanovic said adding that some of entitlements that were subject matter of elimination would be given back as soon as Croatia started earning more.

Europe is in a big crisis, Croatia is stagnating, everything has its price, he said in his conversation with reporters.

"This is my message to people and not to trade union leaders, who are also under big pressure, that this is not the moment for tensions and hard words. In order to have more in one or two years, we must today remember all those who are not working in Croatia or who are employed in the private sector where salaries have been cut," the premier said.

He reiterated that his government was bringing the state finance in order, and on the other hand, it was working on attracting more investments.

Cost cutting and investments are the solution for the recovery from the crisis, and it is not easy to apply, he added.

He said that Croatia's banking system was relatively stable but passive and inactive, emphasising once again the system's stability.

We are not in so bad position, we must be aware of our real strength which is smaller than four or five years ago, the premier added.

He said that the public finances were stable, however, "what Croatia needs is growth".