Union leaders feel the claims of the Croatian Deputy Prime Minister, Mr. Damir Polančec, on the need to increase the state budget by increasing VAT (PDV) and reducing expenses are just an argument in favor of “freezing” the current salaries of state employees.

The Government still strongly stands behind this proposal as an important part of rebalancing this year’s budget. Our Government contacts believe that the Government cannot give in on this issue, as they did last year. If the base salary is not changed within one year, the salary expenditures will reach 23.48 billion kn. This is an increase by 8.2% from 2008.
(AmCham)