If there is no agreement between trade unions and government by January, they will meet in court.
The new government, which is still a subject of coalition negotiations, will almost immediately have to make a number of tough financial decisions. In 2017, the country must refinance about 30 billion kuna in debts (excluding treasury bills) and it will also need to start negotiations with trade unions representing workers in public sector about pay raise which had been promised to them, reports Poslovni.hr on September 21, 2016.
If an agreement is not reached by the end of the year, the trade unions will take legal action and demand the payment of about seven billion kuna, says Vilim Ribić, president of the Association of Croatian Trade Unions. About 180,000 employees in public services and about 63,000 employees in the civil service have the right to an increase of base salary by six percent, since GDP has increased by at least two percent in two consecutive quarters. That was determined by an agreement signed in 2009, at the beginning of the financial crisis when the union accepted a delay in the pay raise they were promised earlier. In addition to the pay raise, the unions also demand holiday and Christmas bonuses to be paid as well. Although the government does not dispute their demands, the 2016 budget, as well as budget projections for 2017 and 2018, do not include money for this purpose.
“The latest meeting was held in July, when the government said they could not do anything since they were just a caretaker government. However, after that they made a number of other financial decisions which demonstrate they can do what they want”, says Ribić. But, the time is working in favour of the unions. “If we do not sign an agreement with the government by 1 January, we will sue them for seven billion kuna”, he adds. “The actual amount will depend on calculations and interpretations of whether the GDP has been growing by two percent starting from January or from April”, he says.
During the last government, they mostly negotiated with Deputy Prime Minister Božo Petrov, but now they want someone else. “We want to talk with someone who understands economy, such as Finance Minister Zdravko Marić or HDZ economic expert Tomislav Ćorić, and not with a psychiatrist who has no idea what we are talking about”, says Ribić.
Although the negotiations will have to wait for the new government to be formed, it is likely that any solution will again increase deficit and public debt. And, since interest rates are going up and the debt to public sector employees is growing, trade unions are in no rush to solve the problem.
