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The Government Would Postpone Salary Increases for Public Sector Employees Due to Lack of Funds

It is still unknown whether around 240,000 public sector employees will have higher salaries since 2016. The Government lacks funds for the agreement that is activated by GDP growth.

According to Jutarnji List, the Government does not have money for a six percent salary increase if GDP grows by an average of two percent over two quarters. According to such an agreement, signed by the HDZ government, the budget would lose 1.8 billion kuna annually. However, that money is currently unavailable.

– The agreement should be respected, but the real question is whether GDP has indeed grown by an average of two percent, or is it somewhat less. If it is less, then the provision from that agreement cannot be activated, a Government source stated.

He added that in the Banski Dvori, in the event of a dispute with the unions regarding the dynamics of economic growth, they are also ready for arbitration. The arbitrator would then need to determine whether GDP achieved a growth of two percent or is somewhat lower. However, even if it did, there is no money in the budget, so the Government would prefer to postpone the implementation of the agreement.

The unions are currently reacting cautiously to such a development. They state that the Government can propose whatever it thinks is necessary, and should present its proposals. With arguments.

We remind you that the State Bureau of Statistics will publish the estimate of the quarterly calculation of gross domestic product for 2015 on Friday. The first estimate showed that GDP grew by 2.8 percent in the third quarter. If the State Bureau of Statistics confirms the first estimate, it will mean that GDP grew by more than two percent in two consecutive quarters. This means that, according to the aforementioned agreement, the salary base in public services would have to increase by an average of six percent.