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Bulgaria: Miners On Strike Reach Agreement

Sofia, 25 February 1998 (RFE/RL) -- The Bulgarian government and striking miners at the state-owned Gorubso mine have reached agreement ending an eight-day stoppage. Their agreement, reached on Sunday (Feb 22), is seen as an example of cooperation between the authorities and workers at a difficult time of transition in the Bulgarian economy.

Finance Minister Muravey Radev, who signed for the government side, said that by midweek (Feb 25) he will issue an order for the restructuring of Gorubso by breaking it up into eight separate companies. In each of these companies, the workers will have the right to determine the amount of their salaries, on the basis of realistic expectations. At the same time, the administrative personnel will be drastically reduced. In addition, the Ministry of Finance will grant to the new firms an interest-free credit as start-up capital.

As a gesture, the Gorubso miners said they will work overtime in order to compensate for the losses of 1.5 billion leva (About $8.3 million) which their protest inflicted on the budget.

Originally, when the strike started, the miners were seeking pay rises of up to 200 percent.

While the miners' strike was continuing, employees of the Bulgarian State Railroads (BDJ) planned also to go on strike. This action was however called off, after the Minister of Transport Velhelm Kraus fired the Director General of the BDJ, Jordan Mirchev, and the railwaymen's union agreed to accept the Minister's offer of a 20 percent payrise, backdated to January 1.

The problems at the state railways are the same as those which caused the miner's strike in Gorubso -- namely an over-large administrative apparatus and too many workers left idle because of unused production capacity. At the moment BDJ has 53 000 employees. The government's restructuring program however calls for staff by this year to be trimmed to just over 50 000 railmen and clerks. As in the case with Gorubso, the restructuring of BDJ will start immediately. The company will be dismantled into three separate firms -- namely Passenger Transport, Transport of Goods, and Infrastructure.

Because of the labor discontent at Gorubso and BDJ, politicians and analysts were pondering whether there is a trend emerging of industrial trouble as Bulgaria goes though the long-delayed and painful transition from a centrally-planned to a market economy. The general conclusion seems to be that there is no "wave" to be expected. "It is absolutely wrong to speak of a strike wave because there isn't a common underlying motive, valid for all branches of the economy", said the vice-president of Podkrepa trade union, one of the two largest union confederations in Bulgaria.

The common aspect in the cases of Gorubso and BDJ lies rather in the other direction, namely in the readiness of the workers to cooperate with the authorities in tackling painful structural reforms.

Prime-Minister Ivan Kostov last week issued a statement saying the necessary basic reform is the restructuring of the old state enterprises, inherited from the era of the centralized economy. Kostov said that in this respect the government has still not fulfilled expectations. He said one can understand the reluctance of managers of the state-owned companies to throw people out in the streets as unemployed, but it is also true that the painful transitional period can not be avoided. The sooner the measures are introduced, the sooner the normalization can be expected, he said.

His comments are reflected in a recent report by Moody's, the international credit-rating company. Moody's said that for the time being the Kostov government enjoys wide social support, but if the reforms are not carried through to an end, the consequences for the country will eventually be very serious.