"We don't believe in risky monetary experiments, we don't believe those who think we should not repay loans, we don't believe in prophets who say that all our problems would be solved if we laid off dozens of thousands of people in the state administration. Our general commitment is that the process of necessary reforms should keep up with a recovery and growth of the private economic sectors and with bringing order to the difficult situation in state finances," Milanovic said, presenting an annual report on the government's performance.
He said the government was fighting "within a reasonable limit" to keep every job in the private and public sectors, but that a labour legislation reform was imperative to slash the state's debt.
He said the consolidation of state finances was one of the directions for pulling out of the crisis, but conceded that it would be tough to keep the budget at the planned HRK 11 billion and that Croatia would enter the excessive deficit procedure.
The prime minister said economic growth was the only way to reduce the deficit and that in the short term this could be done by privatising or leasing state property. "Don't believe those who say we are selling the state. A company which has swallowed up billions of kuna from the state budget is no national treasure."
Milanovic said the government wanted to discuss how to preserve and increase workers' rights and further tax reliefs for citizens and businesses. "But as long as we are wrestling with a budget deficit and enormous credit liabilities, some demands to increase or retain material rights are simply not realistic."
He said social rights, the payment of pensions, and war veterans' entitlements would not come into question. "But we won't curry favour and delude. At the beginning of our term we rescinded officials' right to privileged pensions and now we will move reducing pensions that are higher than the average salary but were not earned through work."
Milanovic said the government's most important task was to define and pass economic recovery measures. He said that during the 21 months of his cabinet's term, twice as many projects within the IPA programme had been contracted than in the previous four years.
He called on MPs to leave a decision on the construction of the Peljesac bridge up to experts. "If you can say something good for the project in informal contacts, do so. Don't write letters, that's wrong," he said, referring to Dubrovnik county prefect Nikola Dobroslavic, who had sent a letter about the bridge to European Commission President Jose Manuel Barroso.