Janša criticised public sector trade unions for clinging to old mentality and refusing to accept the reality, saying the economy shed 60,000 jobs since the beginning of the crisis while the public sector unions complained about government cost-cutting measures as being "unfair".

The public sector today employs three times as many people as it did in 1994 and performs many "duplicate tasks", Janša said. An audit is currently under way and it might happen next year than many funds and agencies will be abolished, he stressed.

Janša moreover reiterated the need for a swift implementation of key structural reforms, with the primary goal of making up for the delay of the past three years and sorting out the public finances.

Should key measures fail to be implemented in time, the next years will see budgets similar to those recently adopted in Latvia and Portugal, Janša warned.

He also highlighted the importance of the labour reform in order to remedy the "unconstitutional situation" in the labour market with "wild flexibility" on one side and excessive security on the other.

With regards to the announced VAT hike, Janša said the government decided for a selective raising of taxes it believes would not present a significant hurdle to economic growth.

Nobody thinks that the VAT rise will not mean higher costs, but it is the lesser evil, Janša said. The government cannot increase the budget deficit and neither can it cut on investments which are largely tied to European funds, the prime minister explained.

Janša made the comments at a speech as part of the Academy of Active Citizenship and Entrepreneurship held in the seaside town of Piran. Running until Sunday, the event features a number of panels and lectures dedicated to business, politics, law and diplomacy.