The Economic and Social Council (GSV) on Wednesday took note of a budget proposal for this year, to be forwarded by the government to the parliament on Thursday, with GSV chair and union leader Mladen Novosel describing it as not too much development-oriented and employers' representative Damir Kustrak saying that it was "relatively conservative" and noting that reforms would probably ensue in the coming months within the European Semester.

"The budget has been taken note of, that is the conclusion of the session," Novosel, who heads the SSSH trade union federation, said after the GSV's 200th session, which was the first in the term of Prime Minister Tihomir Oreskovic, who attended its introductory part.

Novosel said he considered the PM's presence at the session as a "strong message regarding the development of the tripartite social dialogue in Croatia."

The budget proposal was presented to the social partners by Finance Minister Zdravko Maric, and Novosel noted that the budget "definitely does not answer the question in which segment the government, as the biggest investor, would have a development role at the moment."

The second topic of the session was the European Semester and it was agreed that the government and the social partners would meet  once a week to discuss everything related to the reforms Croatia had to implement.

Kustrak said that the state budget for 2016 was "relatively conservative, focusing on reducing public debt growth."

"As for reforms that we are expecting, we will have to wait for them for a while. They will apparently be implemented in the second stage. The discussion we will have regarding the European Semester is actually connected with some reform moves and the government has the obligation to deliver on them by the end of April in relation to the European Commission," said Kustrak.

If reforms are implemented, they will positively affect the budget "as the execution of the 2015 budget did - the revenue was higher, the expenditure lower, resulting in a lower deficit," he said.

Both Kustrak and Novosel confirmed that there would be no cuts in salaries and pensions.

Negotiations will be held with public sector workers because they are not backing down on their demand for a six-percent pay rise, based on an agreement providing for such an increase if GDP grows by two percent or more for two consecutive quarters, because the budget proposal does not envisage the HRK 1.8 billion needed for that purpose.

On the other hand, the budget envisages funds for thousands of workers who have been waiting for their minimum wages to be paid under legislation regulating the settlement of claims in case of employer bankruptcy. We expect those workers to receive their wages immediately after the budget is adopted, said Novosel.

Labour and Pension System Minister Nada Sikic described the session as constructive, saying that her ministry would be allocated the same amount of budget funds as last year and that no ministry programme would be cancelled.

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