Croatia Government and Unions Clash Over Budget and Wage Demands

The Croatian government is facing significant tension with public sector unions regarding wage increases and budget stability. Public service unions have requested a 9 percent increase in base salaries starting January 1, 2027, alongside a monthly 65 euro meal allowance to combat inflation and rising living costs. Finance Minister Tomislav Ćorić has rejected these demands, stating they are "not acceptable" and would jeopardize the country's financial stability.

In a budget rebalance presented to the Croatian Parliament, Minister Ćorić announced that planned expenditures will exceed projected revenues by four billion euros by the end of the year. Despite this deficit, the government plans to increase total expenditures to 40.6 billion euros, primarily to fund pensions, salaries, social benefits, and strategic projects in defense, energy, and railway infrastructure. Total revenues are projected to rise to 36.6 billion euros due to increased tax and contribution income.

Negotiations are expected to continue next week as both sides attempt to find a sustainable model for the new Basic Collective Agreement while maintaining fiscal responsibility.