Union federation leader Krešimir Sever (Photo: HRT) Union federation leader Krešimir Sever (Photo: HRT)

Addressing reporters after a meeting with trade union representatives and employers on the government's national reform plan, Pavić said the referendum could have very serious negative consequences.

"According to our calculations, if the referendum succeeds, it will cost the state budget 45 billion kuna in the period until 2040, which can result in lower pensions or new borrowing that could burden our children and grandchildren, namely a 5% drop in pensions and loans in the amount of 45 billion kuna," Pavić said.

Union leader Krešimir Sever said the Minister's remarks were just spin meant to scare people from signing the unions' referendum petition.

"Those calculations just don't add up. What we have been proposing has nothing to do with borrowing or with the collapse of the pension system," he said.

Unions want to stop the government from moving the retirement age from 65 to 67. The legislation has already passed but will take until 2033 to take full effect. Unions will begin collecting signatures for the referendum on April 27th. They said they are confident they will pick up more than enough support to put the issue to a national vote.