Commenting on state finances, Prime Minister Zoran Milanovic said in an interview for Saturday's issue of Novi List daily that Croatia must change its budget policy and that cutting budget spending was the only possible solution.
Such a decision is a political one, sensitive, but necessary, Milanovic said, adding that the government was ready for a turnaround.
Asked if the previous government, led by the Croatian Democratic Union, had left a worse situation than expected, Milanovic said there was no use in complaining and shifting responsibility to the previous governments, but added, "We would not have to cut budget spending had the necessary measures been implemented."
Asked about ways to solve existing problems in the public administration, the PM said changes were necessary if the public administration was to be efficient. He stressed that this year there would be no lay-offs in the state administration, but that public companies would have to be restructured.
Commenting on reports that 24,000 public administration workers with fixed-term employment contracts would be laid off, Milanovic said there had been too many fixed-term employment contracts and overtime hours, resulting in the "excessive spending of money that was not earned."
Speaking of proposed amendments to the Labour Act, the PM said they were about necessary changes to the part of the legislation referring to the extended application of collective agreements and not about radical changes to the Labour Act. "The trade unions have shown readiness to discuss the disputed regulation on the duration and extended application of collective agreements which had almost led to a referendum," he said, adding that the trade unions were showing a sensible approach and that the issue should be discussed.
Asked about efforts to deal with the economic crisis and the government's relationship to the trade unions as social partners, Milanovic said that all were expected to agree to certain restrictions and participation in those efforts, and that the budget was realistic, humane and feasible.
The overall tax burden will not be increased, those who have more will have to carry more burden, those who have less will be protected, the tax burden on the business sector will be reduced, and the health system will not be jeopardised by reductions of health insurance contributions, he said.
Asked about Croatia's credit rating, he said that the government was doing its best to maintain it, but that drastic cuts would bring the country to a halt entirely. The IMF's assessment that the government's course is good gives reason for optimism, he said.
Asked about possible reductions of budget funds intended for the Church, the PM said that obligations that had been assumed had to be honoured.
Speaking of the construction of a new railway, Milanovic said it was one of the projects that had been waiting to be implemented for years and for which funding could have been secured. He added that the government was considering a possible concession, a public-private partnership, and international sources of financing for the railway.
Asked about relations in the ruling coalition, Milanovic said that he was satisfied with them and hoped the government would meet the public's expectations.
He stressed the government would do its best to protect the most vulnerable social categories and pensioners, that it was working on providing for those to be laid off, and that funds had been ensured for the business sector to be used for protecting existing jobs and creating new ones.
Asked about relations with President Ivo Josipovic, the PM described them as very good.
