PREMIER RACAN: GOVERNMENT HASN'T LOST SOCIAL PARTNERS' TRUST

ZAGREB, Jan 8 (Hina) - Croatian Prime Minister Ivica Racan said reforms were a 'question of fate' and the government would persevere in implementing them or resign. Addressing a regular press conference on Monday, Racan said there was a high degree of agreement on the necessity of reforms, but added that any announcement of restrictions, reforms or cuts in the number of employees in the public sector was being opposed. He reiterated that 2001 was a year of reforms both in the police and army forces, where reform interventions had already started with the reduction of the duration of military service. Speaking about the relationship between the government and its social partners - employers and unions, Racan said the government could not have yielded to demands which seriously jeopardised the set reform course, but added the government had not lost the trust of its social partners because of that. Asked what the government intended to do regarding the union ultimatum for it to revoke its decision on freezing salaries, Racan reiterated the government was ready for talks but not for ultimatums. The government did not freeze salaries, he said, adding that lower income tax rates alone would result in higher salaries of employees and that other measures this year would go in that direction as well. The prime minister announced new talks with unions, adding the government would propose a three-year agreement on the wage policy under which salaries in the public sector would depend on the growth of Gross Domestic Product. Speaking about the problem of maternity allowances, Racan said that legal rights exceeded the current potential and added the government was ready to consider any proposal on increasing the allowances on condition it was accompanied by a clearly defined source of funds from which the increase would be covered. Racan also announced a proposal on a 10% cut of the salaries of state officials and recalled that their salaries had already been reduced by some 30 percent, although today's officials, unlike the former ones, lived exclusively off their salaries. Asked whether the government had adopted a political decision on the further privatisation of Croatian Telekom (HT) and what its response to Deutsche Telekom's offer would be, Racan said the government, as HT's owner, was not satisfied with the concept of development and investment of HT. "Because of this, we are looking for better solutions. I believe (we will find one) with our current partner," Racan said without disclosing details of the talks. The prime minister firmly believes that Croatia can respond adequately to attempts aimed at jeopardise the country's national security through terrorism and similar acts. He did not want to draw a parallel between the situation on the Czech television and Croatian Radio Television (HRT), hoping HRT would not see a rerun of the Czech situation. A new bill on HRT has been sent into parliamentary procedure and is open for discussion, he recalled. The government will insist in the debate on its proposal that the Transmitter and Communications Section be separated from HRT, that the public television have two instead of three channels and that the parliament, rather than 'operative politicians', make decisions about HRT Council members, he said. These are the questions, as well as the question of whether HRT will be a public institution or a company, which will be discussed, he said among else. (hina) sb rml