Transport workers protest against the regulation of wages in companiew with majority state or municipal interest

Waving trade union flags, thousand transport workers rallied outside the government building in central Sofia Thursday to protest the regulation of wages in companies with majority state or municipal interest.

The Finance Minister warned that deregulation of these wages will be the biggest threat to macroeconomic stability this country has seen in the past 10 years, and the Prime Minister said that the government would not act under pressure and would have a different approach to the different types of companies.

The organizers of the Confederation of Independent Trade Unions in Bulgaria and the Podkrepa Labour Confederation set the number of protesters at some 4,500. Among them were railway workers, workers of the public transport companies in Sofia, Bourgas and Varna, Sofia Airport and other aviation workers, miners and workers in the energy industry.

The speeches of the trade union leaders at the rally were frequently broken by calls of „Mafia!“ and „Resignation!“. The protesters turned to the President’s Office - right across the street from the government building with the words, „We’ve run out of patience!“

The area around the government building was closed to traffic because of the protests. The whole city centre was severely congested and public transport was disrupted. A bus driver told an angry crowd waiting for their long overdue bus at a bus stop that they should be happy there was still any public transport because soon they might have to walk.

The rally ended after adopting an appeal for a nation-wide transport strike. The protesters submitted a formal declaration with their demands: scrapping a government ordinance that restricts the wage bill increase in companies with over 50 per cent of state and municipal participation, by binding it to financial performance; and changing provisions in the corporate income tax legislation, that govern non-wage benefits to workers such as for food and clothes.

The ralliers also called for the resignation of State Administration Minister Nikolai Vassilev for his remarks earlier this day against the protesters’ demands.

On his way into a regular government meeting, Finance Minister Plamen Oresharski said that the possible revoking of the ordinance on the wage bill in public-sector companies will be the biggest threat to macroeconomic stability in Bulgaria in the past 10 years.

Commenting the protests before the news media, Prime Minister Sergei Stanishev said that a purely market approach would close down some of the companies affected by the controversial ordinance. The approach of the government would be different for the dufferent types of companies but in any way the government would not act under pressure, he said.

The government has already discussed the ordinance at a special meeting, said the Prime Minister. He noted that the document has been effective for 15 years and the unions have never had any objections to this moment.

Some companies, such as in the energy sector, are making a profit and they can raise wages without restrictions but other companies, including rail company BDZ, are loss-makers and they provide public services, said also the Prime Minister. „This is why the position of the government is that the ordinance needs to get a thorough analysis.“

As for the non-wage benefits, such payments have been rapidly increasing which leads to the formation of quasi-wages, commented the Prime Minister Stanishev. He said this calls for a careful look into the various types of companies and only then a final decision can be made.

The benefits for clothes and food, among other non-wage benefits, were not taxed until recently when Parliament amended the Corporate Income Tax Act to change that.

A working group has been set up with the participation of government ministers and experts to propose a reaction to the demands for scrapping the ordinance, said State Administration Minister Vassilev, one of the most outspoken advocates of the rules for keeping in check wages in loss-making companies. His own opinion is that the ordinance has done a good job over the years.

He recalled that the problem started several months ago when non-wage benefits started to be taxed. He also said that this tax was not his idea, or of the Simeon II National Movement, one of the partners in the government coalition, to which he belongs, and that they did not object to the idea of adjusting the incomes of employees to compensate them for the new tax.

He hypothesized on a scenario in which monopolists such as the companies in the communications, the energy industry or transport, increase significantly the wages of their workers despuite the losses they suffer. „Where would the money for the higher wages come from and how would it affect the prices their users pay?“.

Sofia Mayor Boiko Borissov disagrees with Vassilev and said he supports the protesters „because scrapping the ordinance would allow a number of companies to up the wages they pay“.

Also on Thursday, it emerged that the Sofia district heating utility company has agreed to increase the wages of its workers by 50 per cent. An agreement on the wage increase was signed a day earlier between the trade unions and the company management, Bozhidar Mitev of the Independent Trade Union Federation of Energy Workers in Bulgaria told BTA. Wages will be increased in several stages, starting with 20 per cent, retroactively from January 1, followed by 15 per cent from July 1 and another 15 per cent by October 1.

The workers in the cash-strapped Sofia heating utility last had their wages increased in 1999.

According to Mitev, the rates which the company charges its users will be unaffected by the wage increase.

He warned that the workers would immediately go on strike if the government steps down on any of the promises it made.

Despite the agreement, representatives of the unions at the Sofia heating utility were at the rally outside the government building.

BTA