Finance Minister Slavko Linic and Deputy Prime Minister Branko Grcic said on Tuesday, in response to demands from trade unions representing public sector employees, that the government could not increase consumption without a prior economic growth, adding that the cuts of salaries in the public sector had been minimum so far.
The leaders of twelve public service unions on Tuesday announced that they would hold a referendum on May 17 on whether to block the entire public service sector in an effort to compel the government to change its policy or to step down. A reduction in budget deficit and foreign loans should only be approached when economic growth has been ensured and jobs opened, unionists said.
Linic said that public-sector workers' unions had the right to announce protests and strikes, but they could not expect expenses to go up unless an economic growth is recorded and new jobs created.
He recalled that through the entire 2012 the government and unionists had negotiated about collective agreements and branch agreements as the government clearly stated that overall salary budget should be reduced.
In order to reduce the wage budget by two billion kuna, we decided to cut the salaries in the public sector by three percent, Linic said adding that the government could not abandon its policy.
Linic told the press that the integrated salary calculation showed good results - between 40-45 million kuna have been saved on the monthly salaries of some 12,000 employees in ministries. There were many abuses in respecting the collective agreement, application of wage index, wage supplements, Linic said.
He announced that over the next month or two, the ministries of the interior and defence should be included in the integrated salary calculation system while employees in the health and education systems should be included by the year's end, so much more would be saved.
Deputy PM Grcic said unionists could not protest against austerity measures because the government cuts of their salaries were minimum.
He stressed that addition spending was not possible given the deficit and the amount of the public debt.
Grcic believes that a true recovery would take place in 2014 or 2015 when a "New Deal" will be launched to Croatia, owing to EU funds. He stressed that eight projects worth EUR 600 million would be agreed by the end of the year and recalled that the government had managed to salvage the shipbuilding industry and keep 10,000 jobs in it.
