"We are are not landowners, capitalists, owners of financial capital or rentiers. Almost all members of the government have spent their careers in public service as doctors, professors, diplomats or civil servants, making a living from their work. I certainly do understand their problems, but if there is no billion or two billion kuna, there is nowhere I can take it from," Milanovic said in an interview with the public broadcaster HTV in the evening.

Noting that the unions were threatening to bring the country to a standstill because of three per cent of their gross wages, the prime minister said he had nothing against the unions, but that their demand was unfeasible at the moment. "This is not a message to the union barons, but to tens of thousands of people in the public sector: we are working for you, have patience."

Milanovic said that the government and the unions would have to come to an agreement that the amount in question could be reinstated only after GDP reached pre-crisis levels. "All else is unrealistic. The opposition party can make such promises because they brought us to this situation in the first place," he added.

When asked by the interviewer if this was the last year of austerity, Milanovic said he believed so, adding that he expected sound progress in the economy, in energy, transport and the fiscal system, because of sound finances. "It's not like that at the moment. The burden of what was happening, which involved many people and ministers from the HDZ, is huge. We have to cope with several things simultaneously, but I will do it to the end. These local elections were a signal to me that we are on the right track."

Commenting on Sunday's vote, Milanovic said that the coalition led by his Social Democratic Party (SDP) had won in three of the four largest cities, reiterating that the election campaign had been "ugly and dirty", especially in Vukovar, Sisak and Split.

Speaking of the election victory of the SDP-led coalition in Vukovar, he said that the people of Vukovar, after all that had happened there and what their rivals had attempted to do, had chosen a path of ethnic co-existence by saying "no" to those who had tried to gain support by challenging the constitution and the minorities' right to use their alphabet.

When asked if he was disappointed by the defeat of SDP candidate Rajko Ostojic for Mayor of Zagreb, the PM said he was not disappointed but not pleased either.

"I wish Rajko had won. We thought Rajko Ostojic would be a strong and visible candidate, but he was overextended between his work in the Health Ministry, which is harder, and the mayoral race," Milanovic said.