Up to 6000 surplus employees in Zagreb city companies

After Zagreb Mayor Milan Bandić announced shock therapy in Zagreb Holding, including salary cuts or a reduction in the number of employees by one-fifth, this could be just the beginning of what awaits employees in municipal companies in Croatia in the coming months.

Municipal companies in Croatia have long been places for “employment” of friends, relatives, and the politically connected, which is why the number of employees in them, according to data from the Institute of Public Finance (IJF), had already risen to around 30,000 before the crisis, writes Jutarnji list. However, increasingly thin city and municipal budgets, as well as increasingly impoverished users of their services, can no longer afford this.

– The situation with surplus employees in municipal companies and the way they are employed varies from region to region and cannot be generalized. Municipal companies in Istria and the north of the country operate more rationally than those in other parts. However, realistic estimates suggest that there are 15 to 20 percent surplus people in our municipal companies – says Ante Babić, an independent economist.

Municipal companies in Croatia, as one analysis by the IJF shows, employ nearly 30,000 people, and some of them, like Zagreb Holding, with more than 12,000 employees, rank among the largest employers in the country. However, this is not the final number of employees in the municipal economy sector in Croatia since this data does not include workers in technology parks, commodity terminals, fairs, gas trading, real estate, and advertising space rental, as well as local radio and television stations.

When local government institutions are included in the calculation, as well as the number of employees in local self-government and the municipal sector, the number rose to nearly 67,000 by the end of 2008. The average municipality in Croatia, as calculated by the IJF, has between three and eight employees, while the average city has between 30 and 50. However, employment at the local level continued even during the crisis – according to some estimates, it is increasing by about 2,000 per year – so today no one can say with certainty how many people the local sector in Croatia actually employs. Authorities change at the local level, but the employment pattern remains the same: each new administration brings in its own personnel while mostly retaining the old ones.

If the estimates of 15 to 20 percent surplus employees in municipal companies are accepted, this would mean that the jobs of between 4,500 and 6,000 current workers are in question. Of this, according to Bandić’s calculations, around 2,500 employees could be found in the surplus category within Zagreb Holding.