Aladrović answered journalists’ questions after a contract on the informatization and digitalization of the operations of the Croatian Employment Service was signed at the Ministry of Labor.
When asked whether it is normal that seven out of ten companies receiving support for workers had a higher profit in March than the amount the state provided for support, Aladrović said he did not have that data, but that the measure ‘definitely makes sense in increasing the liquidity of entrepreneurs and preserving employment.’ He emphasized that all granted support will be subject to thorough controls.
– If you ask whether it is normal to make a profit and expect support from the state, I believe that we will also take certain steps in a very short period to limit the amounts of support for all those who used support, and it eventually turns out that they can make a profit, and that we will treat such cases differently – said Aladrović, adding that it is not natural to pay dividends while simultaneously seeking state aid.
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When asked whether restrictions should have been implemented earlier, Aladrović noted that decisions on support were made based on a short and limited time frame.
– But that does not limit us from defining additional criteria in the short or medium term on how further support will be allocated and defining criteria so that we help those most vulnerable, not companies that may not need that assistance at this moment – says Aladrović.
We will bring solutions and acts and all other legal formulations in which we will redefine that relationship towards those companies that can achieve profit without state subsidies, announced Aladrović, adding that this will happen very soon.
For April, we expect more applications for support, for May less
Considering that support for job preservation will still be paid for April and May, and when asked what happens after that and whether the state has money for further support, Aladrović replied that the measure is currently envisioned for the period from March 1 to May 31, so the last payments will be in June for May.
– We must be aware that the payment of only the second third of the support is now following, so by May 20, the payment of support for April is expected, and we still have support for May in June, and we will definitely know in those deadlines how to substitute everything we have done so far, and how to adequately control the spending of funds – adds Aladrović.
Considering that in April the economy was largely exposed to restrictions, Aladrović expects a somewhat higher number of applications for job preservation support, between 570 and 600 thousand, while in May he expects a somewhat lower number of requests, given that for some parts of the economy, business is fully open, and for some partially.
– First, the effects of what is happening with the economy in May will be observed, when there is a possibility of work, and measures aimed at maintaining business and economic activity and preserving jobs will be adopted by the end of this month – says Aladrović.
When asked to specifically answer whether there is money or not, Aladrović said that ‘definitely a certain amount of funds for assistance to entrepreneurs and workers will be found.’
He also stated that the increase in unemployment due to the coronavirus pandemic cannot be avoided, but that the number of unemployed has been stagnating for some time, which means that the measures have had an effect, Aladrović assesses, adding that the number of insured persons, which is linked to the number of employed, has recorded an increase in the last ten days.
Continuation of negotiations with unions next week
Minister Aladrović stated that negotiations with the unions of public and state services regarding the Government’s proposal to suspend wage increases this year will continue next week.
The government has asked the unions to give up Christmas bonuses, vacation pay, and jubilee awards and to accept the suspension of the increase in the base on which salaries in public and state services were supposed to increase by another 4 percent in 2020. After last week’s first round of negotiations, the unions have a deadline of 15 days to respond to this proposal.
– It has been agreed that we will continue negotiations next Monday or Tuesday. The government has a very clear position on this – in order for the economy to recover and for us to have room in public finances to assist the most vulnerable part of the economy, we all must be solidary and give up certain rights – said Aladrović at a press conference.
He reiterated that the government’s proposal does not include a reduction in salaries and rights, but a suspension of salary increases until the end of this year.
– A very reasonable proposal, which makes sense from both an economic and social perspective, in terms of solidarity and public finances – he stated.
By accepting the proposal, fiscal capacity will be freed up for further increases in the long term, which will occur after the exit from the crisis, as it is predicted that Croatia will economically exit the crisis as early as next year. On the other hand, this would show empathy towards employees in the private sector, whose jobs are currently more insecure and endangered than in the public sector.
The first round of negotiations was held last week with representatives of public service unions, then with representatives of science and higher education unions, teachers, and employees in secondary schools, and finally with representatives of state services.
The unions unanimously rejected the government’s request at that time, stating that it is absolutely unacceptable to them.
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