"I would be happy if I could say and believe that this small economic progress of 0.2 per cent is the announcement of some trend, some economic storm that will lift the country out of lethargy. However, it is not. Croatia is still in a deep recession bordering on depression," Milanovic said at an election convention of the SDP women's forum.

Industrial output contracted a further 4.5 per cent last month, which proves that Croatia is stopping to produce, is not competitive, and that a tourism-influenced 0.2 per cent growth will not take it out of the crisis, he said. "The first to overcome the crisis were the countries that produce, that do something."

Milanovic said the European Union should not be seen as a mantle under which everything would be great for Croatia as well, "because there, too, there are competent and incompetent ones, responsible and irresponsible ones, successful ones and failures."

The SDP wants a successful Croatia, a country that works and produces, a Croatia with a moral policy, he said.

"What we are looking at today is a social and moral disaster... But we also see that those who were closing their eyes to it for years, are proposing laws that only yesterday you couldn't even have forced them to consider."

In this sense, Milanovic welcomed the government's announcement that it would lower the upper limit for donations in election campaigns, saying that as far as the SDP was concerned, they could even be abolished. He called on the government, however, to also propose new control rules for the spending of that money, on the model of European Union countries.

He criticised the government's decision, ratified by parliament yesterday, that a referendum on Croatia's EU accession should be held 30 days before next year's parliamentary elections.

"It's not good for the referendum to be contaminated by elections which, in our opinion, should have been held already. A referendum a month before parliamentary elections isn't a good or a sound decision. It will be marked by pre-election competition, criticism, attacks and accusations. No matter how fair and transparent the campaign, those two things shouldn't go together."

Milanovic said it was in the national interest to hold the referendum immediately after the election, when citizens would make the most honest and most rational decision about EU accession.

He announced the SDP would make new steps forward in gender equality, reiterating that, although the party respected the decision of the Constitutional Court, it was against equalising retirement age for men and women.