AFP. 4 January 2002. Serbia's bank closures signal break with Milosevic. BELGRADE -- A move by reformers in the ruling coalition here to shut down four of Serbia's largest banks signals a desire to break with the financial policies of the Milosevic. The shutdowns of the failing banks announced Thursday by a trio of popular economists carry a heavy social price of 8,500 layoffs. It marks one of the biggest risks taken by the reformers who came to power after the ouster of Milosevic in October 2000. According to a union leader, the closures violated a central bank agreement with unions and caught conservative nationalist president Kostunica by surprise. With the liquidation of the four banks -- Beobanka, Beogradska banka, Investbanka and Jugobanka -- 8,500 jobs will be lost, adding to the official 840,000 unemployed in Serbia. Another 500,000 workers are technically unemployed in the 1.9 million strong workforce. Under the plan, bank customers will be able to recuperate their savings at the post office savings bank and businesses will be compensated by the Serb state on a case-by-case basis. The closures threaten the survival of more than 650 other businesses, according to Milan Alimpijevic, president of the banking unions. The labor issue is a political powderkeg. All reforms tried by previous governments have collapsed on the issue of high job losses. Labus estimated the four banks had amassed non-guaranteed private debt of 3.5 billion marks (1.75 billion euros) in the past decade. Between January and November 2001, the banks had a real loss of 50 million marks (25 million euros). Their creditors, mainly foreigners, had filed lawsuits and the court rulings had become effective, Labus explained. Under the circumstances, "the only solution was bankruptcy," he said. Djelic said the decision to liquidate the banks had been taken by consensus with the central bank and the governments of Serbia and Yugoslavia, with the consultation of the International Monetary Fund, the World Bank and the European Union. Last month Yugoslavia and the World Bank reached an accord to restructure Belgrade's 1.9-billion-dollar debt. The World Bank has approved a 70-million-dollar loan for Yugoslavia -- which became a member of the bank May 8 -- to help rebuild the country's ruined economy [ruined, of course, by NATO]. Finance minister Djelic said four new financial institutions would be created and a social plan would allow laid-off employees to leave with 24 months' pay. The closure announcement prompted an immediate outcry from unions and appeared to arouse a harder line from the Yugoslav leadership. Hundreds of workers at the four banks staged sit-in protest demonstrations in their offices in the Serbian capital and other cities. They threatened to continue the protest until January 31, demanding a moratorium on the decision. President Vojislav Kostunica, meeting with a delegation of banking sector unions, expressed "surprise" at the decision and planned to meet with central bank chief Dinkic and finance minister Djelic, according to banking union chief Alimpijevic. The unions had told Kostunica the central bank had dealt a "severe blow" and had "violated agreements" with them, according to a statement by the president's office. Dinkic said on radio B92 that he would respond to an invitation by Kostunica but that he believed the meeting would change nothing. "The process of liquidation cannot be suspended." Serbia and its junior partner Montenegro are all that is left of Yugoslavia since it collapsed into five independent states in the early 1990s. . . . . . . . . . . . . . . . . . . . . . . . Barry Stoller http://groups.yahoo.com/group/ProletarianNews
