Labour minister: Government will react to energy price rises ‘if needed’

NEWS 10.01.2022 20:33
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Source: N1

Labour Minister Josip Aladrovic said on Monday that if necessary, the government would react to energy price rises and see what should be done right away and what based on trends, depending on whether the rises were short term or a result of market disruptions.

The government can and will react when the need arises, and at the moment we are considering different scenarios, primarily the Economy Ministry, and we will adopt the necessary measures, he told the press after an Economic and Social Council meeting.

But first, it’s necessary to see the indicators and discuss them first at the economic and then the political level, he added.

As for a possible gas shortage due to the big disproportion between the procurement and sales price, which threatens distributors, Aladrovic said there would be no shortage.

Salaries should keep increasing faster than inflation

He went on to say that it was key for salaries to grow faster than inflation. In the last five years, prices increased nominally 28 percent and prices 11 percent, the difference representing real pay growth.

Aladrovic announced for tomorrow the continuation of collective negotiations with public sector unions at which, he said, the government will present its offer to their demand for a base pay rise.

He reiterated that the unions’ demand for a 13th-month pay was unrealistic.

However, the negotiations are not just about the base pay but many entitlements also, and the government is open to that as the envisaged salary budget is not a limiting factor, he said.

The president of the NHS union federation, Kresimir Sever, said pay growth was necessary due to higher living costs, and that it was necessary to keep up citizens’ purchasing power.

There are models and methods, one being the French model of capping price growth. It is also possible to cut excise taxes and VAT on food.

It’s important that prices don’t surge, Sever said, adding that the government must protect citizens and the central bank oversee prices and their stability.

Time of cheap energy is over

Croatian Employers Association director-general Damir Zoric said there were many levies on energy manufacturing prices. According to him, the time of cheap energy is over and it is necessary to adapt.

He said some monopolistic companies had increased prices unrealistically for years and that it was the state’s responsibility to look into that.

The state should intervene when necessary and this time, given the inflation, has come, Zoric said, but is against restricting the business of companies willing to take the risk.

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