The negative growth was caused by a sharp drop in the economic activity in the industry, mining and energy, transport and construction. On the other hand, a small rise was registered in agriculture, forestry and fisheries, trade, hotels and restaurants, financial transactions and real estate lease but it was not sufficient to offset this sharp drop, Milanovic said.

All of this indicates that much work is ahead of us, he added.

The fact that a majority of Europe re-entered recession, with exceptions of Baltic countries and Slovakia, can console us but cannot satisfy us, the Croatian premier said.

"The situation is not easy and we will have to provide for ourselves, naturally, expecting a wave of recovery in Europe on which we depend in some our dominant economic branches," he added.

We will do it by kick-starting an investment cycle, Milanovic said adding that "we can criticise public companies, but we are their owner and if they fail to carry out plans, it is our fault." Milanovic alluded thus to Finance Minister Slavko Linic's statement about responsibility of the HEP power provider, the INA oil company and shipbuilding industry for a 9.4% decline in the industrial output in April.

Milanovic called on the Croatians to show "sensible patience" as his cabinet had just started tackling the crisis.