Public Administration Minister Boris Koprivnikar was happy after the signing attended by representatives of 26 trade unions, saying that this would ensure a stable budget on the one side and improve the employee's income on the other.

He also expressed satisfaction that the deal was agreed on by a high number of trade unions - for the agreement to go through it needs the support of a majority of the 40 public sector trade unions.

Koprivnikar also thanked the negotiators of trade unions for "constructive, tough and fair talks".

Finance Minister Dušan Mramor said today in Brussels that the agreement will demand additional measures, as the 2016 draft budget foresaw a 2.8% increase in the wage bill, while the sides agreed on a 3.47% increase.

Mramor added that the gap would be covered by cutting other costs in the private sector "so that the increase would not go beyond the 2.8% planned in the budget".

Branimir Štrukelj, the head of the Public Sector Trade Unions' Confederation, said that the deal meant the end to austerity, as it improves the employee's income for the first time in years.

"This is the first step. It may not be as big as it seemed to be at the start but it is probably more important than it seems at this moment," said Štrukelj. He believes that private sector employees will follow and demand higher pay.

Drago Ščernjavič, who heads the second of the two main groups of trade unions involved in the negotiations, pointed out that the public sector helped save the state EUR 1.8bn in eight years. At the end of next year, the figure will have reached nearly EUR 2bn, he added.

Several unions object the agreement and the Confederation of Slovenian Trade Unions, which has only recently met the representation criteria, plans to challenge the deal in court.

The deal stipulates that wages will return to the level of 2013, while the annual holiday allowance will increase.

Promotions, which have been more or less frozen for years, will be partially relaxed.

The gradual suspension of the remaining austerity measures for the period 2017-2019 will be agreed in new talks set to begin early next year.