Union leaders Mladen Novosel and Kresimir Sever on Wednesday said that the government's measures to cushion energy price hikes are comprehensive and will lead to a milder blow to the wallets of citizens, pensioners, socially vulnerable citizens, as well as entrepreneurs and the economy overall.

President of the Union of Autonomous Trade Unions of Croatia (SSSH) Mladen Novosel said that the unions had met with Prime Minister Andrej Plenkovic just prior to the measures being presented along with representatives of pensioners and the Employers’ Association.

Too much left up to “good faith” of those who raised their prices

“The measures are comprehensive, just like the unions had called for. They foresee support for socially vulnerable citizens and enterprises… On the most part, the financial measures are directed at reducing VAT, tax reliefs on electricity, gas and some food products,” Novosel told Hina.

He warned that there was a “catch” in the entire story because too much has been left to the “good faith” of those who raised prices, that they might reduce some prices and not increase them any further.

Novosel believes that the government will partially reduce costs for citizens after 1 April, however, those costs that have accumulated due to price rises so far will not be reduced.

“Costs can be reduced only in the next period, perhaps through a lower annual price of electricity for citizens, a somewhat lower price for gas and cushioning additional price increases,” he said.

Novosel assessed that a lower VAT on gas and heating to 5% over the next year and then a permanent reduction to 13% is a good move.

“In that period we would expect distributors to reduce the price of gas. The expectation is that gas prices on the global market will stabilise,” Novosel added.

President of the Independent Trade Unions of Croatia Krešimir Sever believes that the measures will certainly lead to savings for citizens, pensioners, and entrepreneurs.

“That should all result in a much milder blow than we were afraid of and which occurred in most European countries at the end of last year,” Sever said.

He added that reduced VAT on some additional food products is good because that should result in less pressure on household budgets, but there is no guarantee that will in fact occur. We’ve seen this before where VAT was reduced but prices did not subsequently fall, said Sever.