ZAGREB, Oct. 16 (Xinhua) -- Croatian Prime Minister Andrej Plenkovic said in an annual report submitted to parliament on Wednesday that his government had made significant progress in all areas in the third year of his cabinet.

Plenkovic said that the government had maintained political stability, consolidated economic growth, reduced taxes and continued structural reforms. This is the year, he said, when numerous infrastructure projects have been launched, when the use of European funds has significantly increased and when strong growth in employment, wages, pensions and social benefits has been achieved.

He said that Croatia has solved all strategic tasks in the last 30 years: it is an internationally recognized country that has liberated its territory and is now a part of the North Atlantic Treaty Organization (NATO) and the European Union.

"Croatia is not going back in any segment," the prime minister said, noting that polarization in society should be reduced and people should be more tolerant. He said that negativism and pessimism prevail in the country. "I'm not saying everything is in the pink but is everything negative? I don't think so," Plenkovic said, calling on all political parties to be more positive.

Plenkovic became the country's 12th prime minister in October 2016.

He announced that his government will offer a 6.12 percent pay increase next year to all public and civil servants. The increase would be completed in three steps, each by a two percent raise. Because of the pay increase, the government will delay the already planned one percentage point reduction of the value-added tax (VAT), which was originally scheduled for Jan. 1, 2020.

Plenkovic also announced that non-taxable income will be increased from 3,800 kuna (566 U.S. dollars) to 4,000 kuna (595 U.S. dollars) per month and that the minimum wage will also be significantly increased after consultations with the social partners.

His announcement came against the backdrop of a teachers' strike here over low wages. Teachers and other employees in Croatia's schools started a strike last week demanding a six percent pay rise. The government initially offered a four percent wage increase in two steps, but the unions declined the offer.

The liberal HNS party, a junior partner in the government, supports the strike and has threatened to leave the ruling coalition unless teachers' wages are raised. On Wednesday, after the prime minister's speech in parliament, the party said that they are satisfied with the proposal and that they would support next year's state budget.

However, teachers' unions are not happy with the prime minister's offer. They said on Wednesday that the offer is not fair and that the strike will continue.

"None of his sentences solves the problem of teachers, who have been striking for five days now," said Branimir Mihalinec from the secondary school teachers' union on Wednesday at the press conference. He argued that the problem of job complexity indexes, which are, in the teachers' case, lagging behind other public servants, cannot be solved by increasing everyone's pay because the injustice would remain. Enditem

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