The Prime Minister and head of the Social Democratic Party (SDP), Zoran Milanovic, on Saturday commented on the International Monetary Fund's (IMF) recommendation to extend the working age from 65 to 67 years, saying that the government would not be forcing anyone "to die at their workplace", but would make it possible for those who so wished to continue working until they turned 70.
"We will have to be flexible. If someone has put in 40 years of service, why wouldn't they retire a little sooner? We don't want labour legislation that would allow workers to be pushed around, but one that would enable new forms. But there is no such job anymore that will last from graduation to the age of 65," Milanovic said at a meeting of the Social Democratic Forum of Women.
Milanovic elaborated on his statement of Friday that the possible positive effects of cost cutting and fiscal consolidation had been more or less exhausted and that the continuation of such a policy would be counterproductive, saying that he was not calling for extravagance or for people to borrow and spend beyond their means.
Milanovic said that in countries where most of their social income goes towards public expenditure heavy cuts have led to a further economic decline. "We are walking a thin line and need to keep our balance. We need to spend and invest wisely, without wasting our money, and we must be aware that we can pay only what we can actually afford. The public sector cannot be dominant and untouchable in relation to the private sector where people are being laid off, because without their work we will have nothing to eat," he said.
"We can't go back to the old ways, but we cannot work under the dictate of international financial institutions and rating agencies either. We are not working for our creditors or for the IMF, as some fear, it's not dictating, but if we go back to the old ways we won't be able to repay our loans. The only way out for us is economic growth," Milanovic said.
"Croatia can still control the portion of its public debt in GDP, but if it exceeds 60, 70 or 80 per cent, we have seen what happens then. There is a lot of room for us to decide on our own destiny and not be a colonial market for some of the big neighbouring countries, but we will always be dependent on the state of the economies of Italy, Austria and Germany, but not totally and not to an extent to which some new democracies are," Milanovic concluded.
