The government of Social Democrat Prime Minister Zoran Milanovic decided to terminate the Basic Collective Agreement after the four unions refused to agree to cutbacks and a reduction of their entitlements without firm assurances that those entitlements would be reinstated once the country recovered from the crisis.

Union leader Vilim Ribic said at the beginning of the protest that they were demonstrating against the abolishment of social welfare and the policy that shed jobs. He accused the SDP-led government of pursuing a wrong policy with austerity measures affecting worst the education and health care sectors.

Ribic said the demonstrators were also raising their voice against the government's attempts to fragment the unions through the proposed law on union representativeness.

Some of the protesters then proceeded to St. Mark's Square, the seat of the government and parliament, while the rest remained in the city's main square, Trg Bana Jelacica, to follow developments on video walls. They were carrying banners with ironic comments on the government.

At the start of today's Cabinet meeting, Milanovic said that "protests with big words and clamour" would not pull Croatia out of the crisis. He urged the protesters to realise that the situation in the country was serious and to take their part of responsibility.

"The situation is serious but not dramatic. If we all approach this problem in the same way, there is a way out," Milanovic said.

He said that the government was making fiscal and budgetary adjustments to the reality.

"This is accepted by a great majority of people in Croatia, while a minority doesn't accept it. For now I believe that it's just that they don't understand, that they don't have other intentions," he said.