Tens of thousands of Croatia's poorest citizens could have their debts wiped out under a new government scheme which came into effect today. 

Dubbed "fresh start", the one-time scheme,  adopted by Prime Minister Zoran Milanovic's centre-left government last month, affects some 60,000 people in the country of 4.2 million. 

The measure concerns Croats whose bank accounts have been blocked for more than a year and whose debt is lower than €4,500. 

Under the deal, debts will be written off by telecoms operators, major banks, the country's four main cities, several public firms, such as HEP electricity company, and tax authorities.

"This is a social measure of which we are proud," Milanovic, who faces general elections later this year amid major discontent with his government, said earlier. 

"This is an emergency measure, the system cannot rely constantly on such moves, but we are doing everything possible to facilitate the lives of people affected by this long and exhausting crisis," he added.

To be eligible, citizens should be either receiving social welfare or have a monthly income of no more than €166. They must also have no savings or second home. Applications must be submitted by the end of June.

In December more than 322,000 Croatians had their bank accounts blocked due to unpaid bill while their debts amounted to €4.1 billion. The new measure could cost up to €46m, according to official figures. 

Croatia joined the Europan Union in 2013, but initial hopes that membership would boost its economy have faded. 

The Adriatic nation's economy remains among the 28-nation bloc's weakest. Unemployment stands at almost 20%, the average monthly salary is €737 and the government forecasts a meagre 0.5% growth this year. 

Analysts say the government should reform the country's huge and inefficient public sector and improve the overall business climate.