Croatia Austerity Measures Cause Discontent


By Drazen Remikovic

Croatia’s new government must implement unpopular austerity measures to stop the impact of the new wave of economic crisis which may sink the economy.

“There’s a big job ahead of us. The first important message is we need to send the public a budget projection. … We need to put under the control our public spending,” Milanovic said.

The country faces a deficit of nearly 3 billion euros, and has a debt of 47 billion euros.

Croatia’s Central Bank Governor Zeljko Rohatinski said Croatia faces a “very, very tough year ahead” and specified 1.2 billion euros needs to be cut.

Analysts say the government must continue the trend of cutting cost in the coming years, but also of economic growth — if Croatia is to avoid a Greek scenario.

But Croatian Union of Workers President Mladen Novosel told SETimes the authorities are already announcing poor economic forecasts for next year, making many workers anticipate a bleak future.

“An American company that owns the iron factory Zeljezara in Sisak fired more than 900 workers on Thursday. Now it is the government turn to move and buy the plant and re-hire the workers or to assist a strategic partner,” Novosel said.

The unions announced they are determined to fight wages reductions. Currently, 200 workers at the Jadran Kamen factory in Split are on strike. The workers of the beverage factory DalmacijaVino announced a new strike next week.

“Since its beginning, the crisis has mostly affected the private sector as thousands upon thousands of workers remained without jobs. The state apparatus and administration is huge, they need to make cuts also in places like that,” Novosel said.

Mitrovic hinted that the worst hit will be in public sector which comprises 65,000 workers, an estimated 30% of which are redundant. The metal and food industry are also expected to be hit hard.

Former Zeljezara employee Antonio Lazovic, 55, told SETimes he recently lost his job.

“After 35 years, instead of the management and colleagues seeing to it that I get my pension as a man, I was fired and kicked out from the factory like a dog. … I now have to go to my relatives and friends and ask them for charity so I can bring home food for my child to eat,” Lazovic said.

Analyst Damir Novotny told SETimes that while public spending must urgently be reduced and every public reconsidered, the dangerous part is that there will be no economic recovery next year.

“The new government must make a basic plan for economic growth but I emphasize that this process can not be implemented in one year,” Novotny said.

Economist Gordana Ljesar, who works in a private accounting firm in Zagreb, told SETimes that business owners closely listen to officials’ statements related to savings and abuse them.

“The employer reduced my salary last year by ten percent due to anti-crisis measures, [money] which he took. The workers expect salary cut by another 10%,” she said.

The government has hinted of introducing a special tax on financial transactions and financial industry, and a possible review of veterans’ pensions.


The Southeast European Times Web site is a central source of news and information about Southeastern Europe in ten languages: Albanian, Bosnian, Bulgarian, Croatian, English, Greek, Macedonian, Romanian, Serbian and Turkish. The Southeast European Times is sponsored by the US European Command, the joint military command responsible for US operations in 52 countries. EUCOM is committed to promoting stability, co-operation and prosperity in the region.

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