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Shutting Down of Serbian Banks Sparks Peaceful Employee Protests - 2002-01-05


For the second day Saturday, employees at four state-run banks in Serbia that are scheduled for liquidation are continuing protests against the government move.

Sit-ins continue at offices of several banks that the government has declared insolvent and plans to close. Up to 8,000 workers could lose their jobs in what is Serbia's biggest corporate closure.

So far, the protests have been peaceful as trade unions try to rally public support against the government action. While the protest action was smaller Saturday, a day earlier 1,000 bank workers participated in the sit-ins.

The banks to be closed include the country's biggest Beogradska and Beobanka. The Finance Ministry says the closures are necessary, as the government doesn't have enough money to keep the money losing banks alive.

The four banks which operate throughout Serbia spent $7 million of government money in the past 10 days. All of the institutions are linked to former Yugoslav president Slobodan Milosevic. Analysts say the banks' cash resources were long ago plundered by Milosevic cronies, leaving only empty shells in operation.

While the bank closure is applauded as necessary and courageous by advocates of market-based reform, it threatens to become a divisive issue between reformist Prime Minister Zoran Djindjic and federal President Vojislav Kostunica.

The federal finance minister, a Kostunica ally whose job is subordinate to Serbia's finance minister, resigned in protest on Friday, and trade unions are seeking the president's help in reversing the closure.

Economists warn of many more enterprise closures as Serbia seeks to bring its finances into balance and overcome the legacy of communist economics where profit and loss had little significance.

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