"In Europe, it is the Fitch rating agency that downgraded the ratings of many (countries). Looking at last year's results, our rating really should have been downgraded because the deficits are enormous," he told reporters, but added that the new government's first messages of fiscal responsibility had led Fitch to wait two more months for additional answers, "which is more than commendable and good for us."

"Still, we were intimidated by their downgrading of high-ranking countries, and this is a sign that if we are responsible and if we realise that we can no longer live on foreign debt, we can start thinking about lower interest rates and a better position for Croatia."

Linic said an investment plan and a reform programme must be an integral part of the 2012 state budget, adding that the government would define them at one of its next sessions and that only then would the budget be complete.

He said that after today's Economic and Social Council session, there was willingness for talks with unions about contracts in cases when the state was the employer and about Labour Act changes. "All those messages will be important for Fitch's final assessment."

Asked how income tax revenues would be reallocated to the benefit of local self-government units, Linic said this would occur as of March 1 "because we don't want local self-government to bear the brunt of increased non-taxable income."

Asked if the decision to liquidate the Vjesnik daily was final, Linic said the paper had neither a product nor a market, so there was no reason for the government to bail it out.

He said the government could not think about Vjesnik's journalists while at the same time downsizing staff in the HZ railway operator. "There can be no exceptions."

"If Vjesnik was a newspaper that can operate on the market, we would all fight for it," he said, accusing the previous government of the daily's situation.