Cablegate: Union Protest Seeks Higher Pay, General Economic

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PP RUEHAG RUEHAST RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA RUEHLN
RUEHLZ RUEHPOD RUEHROV RUEHSR RUEHVK RUEHYG
DE RUEHVB #0310 1070600
ZNR UUUUU ZZH
P 160600Z APR 08
FM AMEMBASSY ZAGREB
TO RUEHC/SECSTATE WASHDC PRIORITY 8819
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY
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UNCLAS ZAGREB 000310

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SIPDIS

DEPT FOR EUR/SCE, EUR/PPD, DRL; NSC FOR BRAUN

E.O. 12958: N/A
TAGS: ECON ELAB HR
SUBJECT: UNION PROTEST SEEKS HIGHER PAY, GENERAL ECONOMIC
IMPROVEMENT

1. On April 12, labor unions staged one of Croatia's
largest ever worker demonstrations on Zagreb's main square,
under the slogan "Together for Higher Pay." Police and
media estimated the turnout at 35,000-40,000 people, while
the Union of Autonomous Trade Unions of Croatia (UATUC),
the largest union and primary organizer of the protest,
claimed that over 50,000 people attended. Marina Kasunic
Peris, head of UATUC's industrial democracy department,
told us UATUC's primary goals are adoption of a minimum
wage law and changes to the labor law to make it more
favorable to workers, particularly through restrictions on
the use of temporary contracts. Many protesters, however,
raised more general demands, such as protection of
fundamental workers rights and a "competent" government to
solve the problems of the people. UATUC President Ana
Knezevic told the crowd, "Today we seek a change of policy;
next time we'll seek a change of government." Kresimir
Sever, president of the second largest union, Independent
Trade Unions of Croatia, argued Croatia had become a
society of castes, with only a few benefiting from
economic growth.

2. President Mesic was the only politician invited to the
event. He was not asked to speak, however, and did not
attend. In comments to the media, he said the protest
proved Croatia is a democracy and demonstrating is a
legitimate way of communicating with the government. In
regard to economic policy, he said Croatia should focus on
production and exports and increasing foreign greenfield
investment. PM Sanader said he also was not pleased with
the state of the economy, particularly regarding rising
prices and lack of exports. He said the government would
amend the minimum wage law in the coming weeks and work
with the trade unions and other social partners to address
other issues such as the grey-market economy and expansion
of workers' shares in enterprises.

3. COMMENT: The large turnout at the protest, despite heavy
rain, indicates the extent of people's anxiety about their
economic situation. The union's formal demands--setting a
minimum wage and revising labor laws--are in areas in which
the government can negotiate. The broader discontent over
economic conditions encouraged by the protesters' rhetoric
may be more difficult for the GOC to address, however,
particularly as it moves forward with the economic reforms
required for EU accession. Without noticeable improvements
elsewhere in the economy, the government will face strong
public opposition to reforms such as restructuring ailing
industries and cutting state subsidies that could result in
job losses. A major battle still looms over what to do
about Croatia's shipyards, large employers that are
generally unprofitable. END COMMENT.

Bradtke

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