ZAGREB, October 15, 2019 - Finance Minister Zdravko Marić said on Tuesday that the government is continuing its policy of increasing wages and improving the financial status of all state administration and public-sector employees.

"Each day we are monitoring what is happening and I do not have anything new to say at the moment. I can just reiterate everything that has been done until now through increases of the base wage and tax reliefs. I repeat, we do not plan to stop here. Our idea is to continue the policy of increasing wages and improving the financial status and conditions for all state administration and public-sector employees," Marić said.

Marić attended a conference organised by the Hanza Media group entitled Quality Corporate Management. He commented on the strike in the education sector and added that the dialogue would continue.

"It is our responsibility to look at the system in its entirety. I am certain that in the end we will recommend something on the back of what we have been doing all along. Wages are not at the bottom of our list of priorities but in fact at the very top," he said.

He underscored that the government, acting within budget, was appropriately rewarding work and creating prospects for everyone entering the labour market.

"We are trying not to distinguish between individual sectors. All state administration and public-sector employees contribute to our society, and we want to improve the quality and efficiency of all services," he added.

Asked whether the state budget would collapse if union demands were met, Marić reiterated that public finances have to be regarded as a whole.

"We are looking at it as a whole. Every portfolio has a defined limit. We increased the base wage by 3% at the beginning of the year and by an additional 2% that entered into force on 1 September. That additional 2% was not planned in the budget but we will secure these funds through savings in various budget items during the year," he noted.

"Everything will be clearer when next year's budget is presented," he said, and because the budget was planned well this year there will be no need for a revision.

He commented on increasingly calls from the opposition for union demands to be met. "The leaders of the parliamentary majority and coalition partners will talk. For me it is important that public finances and the economy are executed without any obstacles," Marić said.

When it comes to a possible snap election, Marić said that he wasn't the person to comment on that, however he commented on Zagreb Mayor Milan Bandić's statements that he would only support a government that worked for the benefit of the people.

"The government is working for the benefit of the people. We all have our ideas but we have to draw the line somewhere. With due respect, I don't think that the solution is always of a financial nature," he said.

More news about Finance Ministry can be found in the Politics section.

ZAGREB, October 11, 2019 - The leader of the Association of Croatian Trade Unions (MHS), Vilim Ribić, said on Friday that a radical, double-digit wage increase in public services was a first-class national interest, assessing that there was 4.7 billion kuna available for that in the state budget.

"Our children are leaving the country, 400,000 have left. In that situation all dogmas about financial consolidation, public debt and deficit need to be put aside. We have to use our last internal reserves," Ribić said after the start of negotiations on an annex to the basic collective agreement for public sector employees.

Ribić recalled that Finance Minister Zdravko Marić had forecast a deficit of 0.9% of GDP yet a surplus was generated. That means that there is about 4.7 billion kuna available for a possible wage increase, he said.

"That leaves room for a double-digit wage increase. That is a psychological message to the people that things are changing for the better, that they need to stay in Croatia and that not everything is hopeless. We should not be bailing out companies before we save the people," said Ribić.

"We constantly have situations like the one in Uljanik and it is time for citizens of this country to have their turn," he added.

The government's negotiation team, Ribić said, insists that there is a lack of money due to financial consolidation, however, public sector unions have pointed out that the enormous number of people emigrating, low wages and the dissatisfaction of the people are a much more important problem.

"We believe that considering the current budget potential, the government can meet union demands without any problems. We expect a significant step forward regarding wage increases because wages are growing much faster in neighbouring countries. Of all eastern European countries, Croatia has been at the bottom of the ladder regarding wage increases over the past five years," Ribić underscored.

Negotiations on the collective agreement for public services will continue over the next ten days, with Ribić underscoring that there is a lot to be discussed, however, raising the base pay is a priority.

Commenting on Prime Minister Andrej Plenković's message that the strike in schools was absurd, Ribić said that the message is irresponsible. The prime minister is a diplomat who is not familiar with economic processes, he said. "People have the right to strike and he has to re-examine his starting position," Ribić added.

More news about trade union in Croatia can be found in the Business section.

ZAGREB, September 13, 2019 - The government and trade unions in the healthcare sector on Friday initialled an annex to the branch collective agreement whereby additions to salaries in this sector are regulated.

The document was inked in Government House after the two sides agreed on a 7-percent rise in wages of the healthcare sector as of 1 September.

The agreement reached on Friday morning envisages a 3% increase on working conditions for all employees in the sector plus 4% for responsible duties performed by those included in the process of diseases diagnosis and treatment.

For this purpose, the government is supposed to set aside 400 million kuna (54 million euro) annually.

After the initialling of the document, Prime Minister Andrej Plenković said that the sides had tried to reach a solution that was realistic and best in the current circumstances.

He underscores that during the term of his cabinet the wage base for state employees and public servants increased by 11.5%.

Plenković said that the seven percent increase was viable in the fiscal sense for this and next year.

Health Minister Milan Kujundžić said that the agreement was a possible compromise.

Unionist Brankica Grgurić said that they were given guarantees that the annex to the collective agreement would be signed after it had been initialled.

Unionist Stjepan Topolnjak said that all workers in the healthcare sector would not be satisfied, however, under the existing circumstances, this increase was the highest they could achieve at the negotiations.

More health news can be found in the Lifestyle section.

ZAGREB, September 11, 2019 - In negotiations on wage increases for healthcare workers the government is not neglecting teachers or other public-sector workers, Finance Minister Zdravko Marić told reporters ahead of an inner-cabinet meeting on Wednesday.

"We are not neglecting teachers or other services. We will continue talks. The situation is specific in that the collective agreement for teachers lasts for another three years while that for healthcare workers has expired. I should recall that ten days ago the base wage was increased for all by an additional two percent. We are ready for further dialogue," Marić said.

He said that all demands for wage hikes were challenging. "We cannot ignore not just the challenges but also our priorities and the possibilities that we have. It is not good to jeopardise public finance with a measure, and these individual matters should not lead to such circumstances."

Asked if wages would be eventually increased for all public-sector employees because of the forthcoming elections, Marić said he did not know. "We are pursuing a good dialogue and policy that is ultimately trying to detect challenges and problems and we are trying to rectify certain things. If someone thinks that everything is down to the lack of finance, that's not true."

Marić said that the government needed to ensure that all financing was in line with the budget and that that was its obligation to taxpayers.

More economic news can be found in the Business section.

ZAGREB, September 5, 2019 - Labour and Pension System Minister Josip Aladrović said on Thursday the government advocated a horizontal pay rise for everyone and not just some groups.

Speaking to the press before a cabinet meeting, he said there had been several horizontal corrections, with a 11.5% pay rise for everyone over the past two years. "We expect, with a further pay rise and positive economic trends, to correct (wages) for everyone, not just some selected groups."

As for teachers' demands for higher wages, Aladrović said he would hear their demands today and see if any talks were necessary given that branch collective agreements were signed last year and the demands were not related to collective negotiations.

Commenting on healthcare workers' demands for higher wages, he said their branch collective agreement expired on October 31. "We will do our best to arrive at a solution. I think we are close to a solution," he said, adding that what had been initialled would cost 395 million kuna.

Speaking of a national pension, the minister said it would be fully implemented in 2021 and that the legislative framework would be ready by autumn 2020. He said the national pension "will become an element within the pension and welfare systems" and that it was too early to say how much it would cost the state.

There is a group of 53,000 people who will be over 65 in 2021 and have no income, he added.

Education Minister Blaženka Divjak, who approved teacher unions' demands for a 6% wage index increase, before today's cabinet meeting said that it was necessary to open a dialogue between the government and unions.

She said investing in education was an investment, not an expense, adding that the teachers' wage index lagged behind the wage index of other public sector workers and that this "injustice" has to be resolved.

About 1,500 teachers are protesting today outside Government House, demanding a 6% wage index increase.

Finance Minister Zdravko Marić on Thursday said that funds for additional demands by health and education unions had not been foreseen in the sate budget and called for patience until negotiations were concluded.

"We will be asking for some savings to be made during the year on the expenditure side of the state budget in order to secure those funds. There are some ministries that do not have the funds to cover even the 3% base wage increase, while the unions' additional demands weren't planned," Marić said ahead of the cabinet meeting on Thursday.

He added that the health sector was a current topic because the collective agreement had expired. "As of 1 September, the base wage for all public servants was increased by 2%. These are all matters that we are taking into account so that employees can be satisfied," he said, adding that the government was "working so that we all as citizens and taxpayers have a better and efficient service."

He underscored that there are some sections of public administration that have to be re-analysed but "we all need to work on creating positive pressure and a positive environment" and to head in that direction.

Reporters asked if that means that workers in the education sector were the last on the list for their base wage to increase. "No, if anything needs to be changed, we have to advocate a horizontal approach because we cannot neglect any sector of the state administration but look at everything together. No one is first or last," he explained.

He added that negotiations and talks were being held with all sections of state public administration regarding the base wage.

There is no cause for panic but we have to be responsible toward public finances, Marić said.

He added that the base wage had increased by 11% over the past three years and that the government is prepared for further talks.

Asked whether a horizontal wage increase would prevent the strikes that have been announced, Marić said that that decision was not up to him and added that negotiations with the health sector were continuing.

He informed reporters that the three percent base wage increase would cost the government 900 million kuna annually, while an additional 2% would cost an additional 600 million kuna. Anything else above that is a topic for talks and analysis, he added.

More news about the public sector can be found in the Business section.

ZAGREB, August 28, 2019 - Social Democratic Party (SDP) president Davor Bernardić said on Tuesday there was money to raise salaries of healthcare workers, teachers, police officers and firefighters but that the government does not have the political will to do so.

Addressing a press conference, he wondered why the finance minister said there was no money to raise salaries in the public sector if the economy and tourism were growing and the deficit was decreasing.

Bernardić said that according to fiscal policy guidelines for 2020, the government predicted 3 billion kuna higher tax revenues and that they were predicted to rise this year by 5.3 billion kuna. He said this meant there was money and the only question was where it was going.

He said the annual cost of raising salaries in line with current union demands was 800 million kuna and that this was only 2% of the amount annually set aside for public employees.

The SDP supported the union demands for higher salaries and reiterated its proposal to raise the non-taxable income from 3,800 to 5,000 kuna, saying this would mean 350-500 kuna higher salaries for 700,000 people.

Bernardić said the SDP's proposal and the union demands would result in 13% higher salaries for teachers, healthcare workers, police and firefighters and 10% higher salaries for doctors. He underlined the need to raise salaries for doctors, nurses and teachers, "or the whole system will collapse."

He went on to say there was a bad inter-ethnic climate in the country and that this suited the right-wing members of the ruling HDZ party ahead of the presidential election "in order to avoid talking about poverty in Croatia and emigration."

More SDP news can be found in the Politics section.

ZAGREB, August 27, 2019 - The Trade Union of State and Local Government Employees of Croatia said on Tuesday that raising the base pay would not equate salaries between public and government employees, and that the only solution was for the government and social partners to agree on a long term and consistent pay policy.

The announced 2% base pay rise as of September 1 will keep the status quo at the level above 2%, while pay rises by sector and activity will only deepen the existing pay differences between public and government employees, the union said.

Employees in comparable categories in state administration, public services and local government will continue to have different salaries, the union said.

Salaries in comparable categories should be equated as much as possible so that some rise slower while others increase faster, which is only possible in conditions of economic growth, the union added.

More news about public sector in Croatia can be found in the Business section.

ZAGREB, August 15, 2019 - The government will secure funds for a previously agreed 2% increase in the base pay of civil servants and public service employees, to go into force on September 1, Finance Minister Zdravko Marić told Hina on Wednesday, stressing that the government had a horizontal approach to civil servants and public service employees and treated them equally.

The minister recalled an agreement with trade unions from 2017 when the base pay was increased in three rounds by slightly more than 6%.

That dialogue continued and in 2018 and 2019 an additional increase of 3% was agreed for January 1, 2019, he said, adding that unions also asked for an additional, 2% increase as of September 1. The government said at the time that it did not have the necessary funds but that it was willing to accept the unions' demand if savings were made on other budget items, said Marić.

"That is what we have been working on, what we accepted as an obligation and we will honour it," he said, adding that most ministries did not have funds for a 2% increase in the base pay of their employees but that the government would honour the deal with trade unions and increase the base pay by 2% for all civil servants and public service workers.

Marić underlined that the government treated all civil servants and public service employees in the same way.

"With all due respect, but employees in the health and education sectors cannot be singled out from other services," he said.

Asked to comment on media reports that he was angry because doctors and teachers were promised a salary increase without consultations with him, Marić said that his communication with former labour and pension system minister Marko Pavić and his successor Josip Aladrović had been very clear and that all ministers should be involved in talks on raising the salaries of civil servants and public service workers.

More economy news can be found in the Business section.

ZAGREB, November 27, 2018 - After the government and public sector unions agreed a 3% pay rise as of January 1 and a 2% pay rise as of September 1, 2019, the same pay rise was agreed later on Tuesday with state administration unions.

The government equally appreciates and respects both public sector and state administration unions, Labour Minister Marko Pavić said after the negotiations, adding that the ministry made the state administration unions the same offer it made the public sector unions earlier today.

The unions and the ministry also agreed to resume talks next year for a rise in 2020.

Police Union president Dubravko Jagić said the public sector unions had "tied" the hands of the state administration unions because, had they continued to negotiate as intended and as discussed with the government, the rise could have been 3% plus 3% or 3% plus 4%, rather than 3% plus 2%,.

The president of one state administration union, Boris Pleša, said he hoped the negotiations were concluded with the same conditions agreed with the public sector unions.

Earlier today, the government and public sector unions brought the conciliation process to a successful conclusion after agreeing a base pay rise of 3% as of January 1 and of 2% as of September 1 next year, as a result of which the unions scrapped their plan to begin a strike on November 28.

Speaking to the press after the meeting, Labour and Pension System Minister Marko Pavić said that the extra 2% would require 150 million kuna, which he said would be secured through budget savings.

The leader of the Independent Union of Secondary School Teachers, Branimir Mihalinec, said that the eight unions were suspending all activities regarding a strike planned for November 28.

The agreement will be signed on Wednesday. The decision to accept the government's "three plus two percent" proposal was not unanimous, "but we have got closer, to some extent, to our demands being met," Mihalinec said.

For more on the Croatian public sector, click here.

ZAGREB, November 26, 2018 - Negotiations between the government and public sector unions on a base pay increase resumed on Monday, with unionist Stjepan Topolnjak saying before the meeting at the Labour Ministry they expected from the government a decent offer which would not be lower than the unions' minimum demands.

Asked by reporters if the unions would agree to the payment of an increased base pay in two installments, Topolnjak said they would. We realise the government can't offer more as of January 1, so we would agree to a 3% rise as of January 1 and to another rise, another 3% minimum, as of July 1, he added.

Asked about preparations for a strike, he said they were under way but that nothing would be said publicly until after the negotiations.

Another unionist, Branimir Mihalinec, said they expected the government's final offer and that, if the union demands were fully or partly adopted, the matter would be left to union bodies to consider and endorse.

Finance Minister Zdravko Marić is attending the meeting, as requested by the unions.

Labour Minister and representatives of public sector unions began negotiations last Thursday, saying after the meeting they would reconvene today.

The unions demand a 5.8% base pay rise in 2019 but the government is offering 3%, saying it is the maximum it can do under the budget. The unions have turned this down, announcing a strike in all public services as of November 28 and from then on every week until their demands are met.

After the meeting on Monday, Labour and Pension System Minister Marko Pavić said that the final negotiating round would be held on Tuesday morning, while the president of a school employees' union, Branimir Mihalinec, said that the unions would advise their employers of a strike that is to be held on Wednesday.

The conciliation process is unfolding in good faith. However, in accordance with the law we cannot release any details to the public and more will be known tomorrow, Pavić told reporters after the meeting.

Asked whether that meant that an agreement was not achieved, Pavić said that it was agreed to continue the conciliation process early Tuesday morning.

Asked what will happen with the strike announced for Wednesday, considering that strikes have to be announced 48 hours earlier, Mihalinec said that following today's meeting the unions would advise employers of the strike set for Wednesday.

That strike can be stopped only if we come to a satisfactory agreement tomorrow, Mihalinec underscored. Asked whether that meant that they did not believe an agreement would be reached, Mihalinec said that it was necessary to undertake all the necessary steps so that the strike can be lawful and that is exactly what they are doing.

We accepted the government's proposal to try and resolve the dispute tomorrow. We have time for consultations and I believe that tomorrow we will have a final answer, he said, adding that he could not go into any detail.

"The strike is planned for Wednesday, 28 November. The next one, if we don't reach an agreement in the meantime, is scheduled for December 4 and then December 13 and so on until we reach a satisfactory agreement or agreement on the wage policy in the public sector," Mihalinec said.

Asked whether his impressions were a little more positive following today's meeting compared to last week, Mihalinec said that it is necessary to always think positive and to work toward reaching a compromise and a solution that could at least temporarily satisfy everyone.

Asked whether the fact that Finance Minister Zdravko Marić came to today's meeting was a step in that direction, Mihalinec said that the finance minister has participated in the conciliation process from the start. With regard to the upcoming consultations, Mihalinec believes that the government is taking the current situation seriously.

Public sector unions are seeking a 5.8% base pay rise next year, yet the government has offered an increase of 3%, claiming that's the most the budget can afford.

Speculation emerged during the conciliation process that wages could increase a little more but in two phases. The unions have confirmed that they would agree to a 3% increase of the base pay as of January 1 and an additional 3% as of July 1.

For more on Croatia’s public sector, click here.