YUGOSLAV WORKERS MAY BE ANGERED BY LOST SUBSIDIES
Yugoslav government plans to stop
subsidising loss-making firms will anger hundreds of thousands
of workers, Western diplomats said.
    The law, proposed by Prime Minister Branko Mikulic, goes
into effect on July 1 and aims to end a long-standing practice
of supporting unprofitable companies. Under the law, wage cuts
will be imposed on losing enterprises, while those failing to
recover within a six-month grace period will face liquidation.
    The diplomats said Mikulic's attempt to create a market
economy is inevitable, but has still come as a shock to those
accustomed to government subsidies.
    "It was a bitter pill which had to be swallowed, but if an
overdose is taken too abruptly, it may have adverse effects on
the system," a Western diplomat said.
    He said if the law was applied too strictly it would
probably provoke a new wave of strikes and unrest.
    Yugoslavia was swept by strikes last month following the
introduction of a wage-freeze law, later amended to allow more
flexibility and some exemptions in what some political analysts
saw as a retreat by Mikulic.
    But with inflation moving towards 100 pct, trade union
leaders have asked how much more deprivation workers can take.
    The union leaders said workers thoughout the country are
already receiving salaries below limits set under existing law,
while others have received no wages at all this year because
their employers are unable to pay them.
    Workers also complain much of their income is taken in
local, state and federal taxes.
    Many others are losing their motivation to work and
confidence in government as they feel their decision-making
powers are being eroded, trade union officials said.
    Meanwhile, the official Tanjug news agency reported a paper
and cellulose factory at Ivangrad in the Montenegro republic
closed yesterday and 2,000 of its workers were given "temporary
leave."
    Tanjug said the plant had been running at a loss for the 24
years it had been in operation, and its closure was the result
of "economic necessity" rather than bankruptcy.
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