Earlier in the day the HNS stated it objected to the imposition of real estate tax but that in principle it supported the Finance Ministry's effort to follow the best European practice with regard to this tax. However, in an open public debate it is necessary to retain the positions agreed with the coalition partners, especially the principle that no property which the owner uses to live in can be taxed, the HNS said statement. Croatia does not need another debate on taxes, while at the same time the government should adopt measures to back the economy in times of crisis and of a drop in spending and private investments, the statement said, adding that in such conditions the HNS was against the imposition of a new tax, the HNS said.

"I have read the HNS statement and actually I agree with the bulk of its content. So, we have never considered the introduction of a tax on real estate in which someone lives. This is also opposed by the partners. I am also against increasing the tax burden in its entirety, but I am not against new taxes," Milanovic said.

Asked whether the HNS statement could be interpreted as a herald of rifts in the coalition, Milanovic said that his Social Democratic Party (SDP) "has no problems with itself" but that he could not comment on other parties.

"The fact is that the entire European Union has this type of tax, this means bringing the country in order and countering the grey economy. The fact is that the new tax will not increase the entire tax burden," Milanovic said defending the new proposed tax and recalling that his cabinet had already revoked a series of contributions to reduce the labour cost.

Emphasising that a real estate tax was a part of the ruling coalition's election agenda, he also said that "circumstances can change, and we can talk about everything".