After the law on transparency of public funding is adopted and once Croatia joins the European Union, the state will no longer pay salaries in public companies from state budgetary funds that had been earmarked for other purposes and public companies will have to earn sufficient funds to cover their own salaries, Economy Minister Ivan Vrdoljak and Finance Minister Slavko Linic confirmed on Wednesday.
The bill on public funding transparency which the government sent into parliamentary procedure introduces European Commission directives that manage the transparency of financial relations in public bodies and companies or majority state-owned companies.
Reporters questioned what the new bill meant for poor companies like the national railway operator HZ or Croatia Airlines as they did not earn enough to cover salary payments. Minister Vrdoljak said that "according to European and now Croatian rules there is a methodology that stipulates how to fund public companies".
If funds are earmarked for restructuring then they will only be able to be used for this purpose, he explained.
Employees in public companies will be paid from funds they earn just like any other company and the state can help them to raise their competitiveness but will no longer pay their salaries from the budget, Vrdoljak added.
Finance Minister Slavko Linic said on Croatian Radio that as of July 1 it would not be possible to transfer funds earmarked for the restructure of public companies as had been the case until now in HZ and Croatia Airlines.
The government would transfer some public company debts to public debts but that as of July 1, public companies would have to pay costs and salaries from their earnings.
He added that rights and allowances stipulated in collective agreements had to be reduced as tax payers would no longer be paying salaries of those employed in public companies. If collective agreements are not amended there is no hope for companies, Linic said.
