Trade unions in Kosovo threatened on Friday to go out on strike after the impoverished Balkan country's new prime minister vetoed annual 25-percent public sector pay hikes promised by his predecessor.

Prime Minister Isa Mustafa told Reuters on Thursday a promise by his predecessor Hashim Thaci to raise wages by 25 percent per year over the next four years would be "impossible" to keep, but that they would rise in line with economic growth.
"You have started running the country very badly, Prime Minister Mustafa," the head of Kosovo's union of teachers, Rrahman Jasharaj, wrote in a public letter to the premier in response to his remarks. Jasharaj warned of "protests and other trade union action".

BSPK, the largest union in Kosovo, said in a statement it was "disappointed" by the comments. "If the promise is not kept, BSPK will examine lawful trade union options to exercise the rights that belong to us," it said.

Thaci, whose Democratic Party of Kosovo won a June election but ceded the post of prime minister under a coalition deal with Mustafa, hiked public sector salaries by 25 percent in March this year and promised to do the same for the next four years if elected. The pledge alarmed Kosovo's Western financial backers and the International Monetary Fund.
While Kosovo's economy is growing, it is driven mainly by state infrastructure projects, construction and remittances from Kosovars working abroad.

The private sector is weak, with Kosovo struggling to attract foreign investors wary of the young state's reputation for organised crime and corruption more than six years after it declared independence from Serbia. Around a third of the workforce is jobless.

In the interview with Reuters, his first to foreign media since being elected, Mustafa, a 63-year-old economist who served in an exile government during Kosovo's rebellion against Serbian rule in the 1990s, said he would slash taxes for businesses and offer some firms lengthy tax breaks if they create new jobs.
Asked about Thaci's pay promise, he said: "We will raise salaries in line with economic growth." Kosovo's economy is forecast to grow 3.5 percent this year and 4.1 percent in 2015.