Croatia Promises to Slash Cost of State Bodies

Croatia's government on Thursday vowed to cut the cost of the state administration by some 130 million euro a year, to meet a set of reforms and measures needed to correct macroeconomic imbalances.

The measures and reforms are described in a draft sent on Monday to the European Commission, which in May will decide on EU measures to be taken in Croatia.

Croatia will cut wages and benefits in state agencies, institutes and other state bodies that have over 26,000 employees and that spend around 9.2 billion euro annually.

The decision follows an analysis conducted by a special committee of economic experts.

Out of the total sum, around 65 million euro will be saved by reducing wages and by merging institutions.

Another 12.7 million euro will come from salary cuts in 27 bodies, including the water company, Hrvatske vode.

Additional cuts will be made by suspending all salary supplements, such as Christmas and summer bonuses, additional fees for working on holidays and overtime pay.

Croatian Radio-Television, HRT, the state broadcaster, has been identified as spending too much cash on such perks.

The committee also identified a disproportionate number of management positions in some bodies, which will also reduced.

Additional savings of 14 million euro will be made by cutting general material expenditure, especially by reducing external intellectual services, such as translation, expert analysis and security services.

The Commission warned the government in Zagreb in February of excessive macroeconomic imbalances that required resolute political action and specific monitoring.

Cited indicators of Croatia's economic imbalances include: subdued growth, delays to restructuring state firms, high unemployment,...