According to Public Administration Minister Boris Koprivnikar, the financial effect of the deal on next year's budget will be some EUR 56m. The deal is to be initialled this afternoon.

Koprivnikar said that both sides were happy with the agreement, as its financial effects were manageable for the state, while those in need would get more money and sooner than under the current system.

The deal also sets deadlines for tackling anomalies in the pay system, a key point for the trade unions.

This should cost the state EUR 70m annually, but not all of the anomalies will be fixed next year.

The anomalies affecting those with the lowest pay will be tackled in May and the rest in July, the minister explained.

Talks with doctors will run separately, but the deadlines should apply for their pay as well.

Head of the public sector trade union confederation KSJS Branimir Štrukelj said that most of austerity measures would be lifted next year.

In 2018, only restrictions for performance bonuses will still be in place and promotions will be pushed to December. The year 2019 has not be discussed yet.

Štrukelj highlighted a holiday allowance of EUR 1,000 for those in the 16th or lower pay brackets.

Those in the 40th or higher brackets will still get a holiday allowance that is lower than the minimum wage but it would rise compared to this year to EUR 600 and EUR 550 for those in the 50th bracket or higher.

Štrukelj said important progress had been made in terms of premiums for collective supplementary pension insurance.

The deal envisages the paying of 30% of the premiums the whole year through, 50% for those aged over 50 years as of March and 80% for those over 55.

The deal is to be finalised and initialled today and signed in the middle of next week.