Only those willing to work more and better will manage in the next two years, he said in Koprivnica at an election convention of the SDP's local county branch.
"The old model is no longer working. We have seen this in these last few years. Croatia has exhausted its so-called development model. There have been many mistakes, many unlawful things, and if we continue like this, we are doomed to being a barely average and unsuccessful European state."
Milanovic said that in the two years of his government's term, more order had been restored but there was still no economic growth and unemployment was too high.
"Unemployment is a structural issue. If the economy grew five per cent next year, which won't happen but there will be growth, unemployment would still remain more or less high, because such is the structure of Croatia's labour market. Creating the illusion that we will solve the structural problems of the Croatian economy... with temporary employment in tourism, isn't realistic or fair. Only more serious change will make Croatia competitive and strong when the next crisis comes, and it will come. Not soon, I hope."
The PM said Croatia had a government that worked by high European standards. "Unfortunately, this doesn't mean that our rivals play by the same rules. They often play by the rules of a third Balkan league. In normal circumstances, this would carry some sort of penalty, but politics isn't a football league. Politics is life and there is no room for despairing, complaining and crying for help."
At the request of the press, Milanovic commented on President Ivo Josipovic's statement that secret services should have done more in their security estimate of last Monday's marking of Vukovar Remembrance Day and that he would discuss this with the PM.
"I don't comment on secret services and agencies in public, which is this government's policy. That's how it's done in Western liberal democracies. Nonetheless, this doesn't mean that those services aren't subject to democratic and civilian control. I can't be specific, but I can politically say that, other than Croatian culture and good manners, no law was broken in Vukovar. I hope the whole Croatia saw that."
Milanovic also called on citizens, saying he was doing saw personally and as party president, to go to a December 1 marriage referendum and vote for everyone's right to be happy and to choose, that is against the referendum initiative which is threatening that right.
The referendum has not been provoked by the government's activity or policy. It is pointless but, unfortunately, under the Croatian Constitution it is possible, he said, hopeful that such referendums would soon no longer be possible.
At the referendum, to be held based on signatures collected by the "In the Name of the Family" initiative, citizens will decide whether they want the Constitution to define marriage as a union between a man and a woman.