UNREST IN EASTERN EUROPE. Yugoslavia modifies stand on nationwide wage freeze
Yugoslavia made a concession yesterday on wages and prices in a bid to stem an unprecedented wave of strikes. At the same time, however, Prime Minister Branko Mikulic said there would be no compromise in the essential goal of curbing inflation by realistically relating wages to productivity.Skip to next paragraph
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The strikes were spawned by the government's decision on March 1 to freeze wages at their average level for the last quarter of 1986. The action was to be retroactive, imposing cuts in paychecks until further notice this year.
In an immediate gesture to consumers yesterday, 1,350 inspectors were being dispatched around the country to ensure that traders observe new government fair-practice rulings. Although there are no current shortages, additional supplies of goods are to be channeled into the market. This move is intended to prevent merchants from holding back goods until the freeze is over, when they could charge higher prices.
Over the next 15 days, Mikulic said, a series of ``economic coercion laws'' will be prepared to control prices, under the close observation of the inspectorate.
And the wage freeze itself will be applied flexibly, in order to assist enterprises which had ``not awarded themselves unreasonable wage increases'' in recent months, he said.
Last year, productivity in Yugoslavia was less than half of 1 percent, inflation ran to three digits, and there was a further spurt in the country's Western debt liabilities.
Mikulic condemned critics who denounced the wage freeze as an attack on Yugoslavia's unique self-management system, in which workers have a voice in the disposal of profits but frequently vote for increases inconsistent with the economic performance of their enterprises.
``We have to ask ourselves,'' he told them, ``what will be the prospects for self-management if inflation is left rampant and uncontrolled?''
The new moves were the prime minister's first public comment to Yugoslavs since the work stoppages began two weeks ago. His actions indicate that the government wants to head off any recurrence of strikes that many believe will come at the end of March, when more paychecks are expected to be hit by the freeze.
Mikulic's reference Sunday to calling out the Army, made in an interview with the West German newsweekly Der Spiegel shortly before he visits Bonn, was not made in the strike context. But it is not altogether irrelevant. He was answering questions about dealing with internal political opposition, and his replies on the Army's role in any threat to the (socialist) Constitution followed standard lines of such utterances since the death of President Josip Broz Tito seven years ago. The interview allowed Mikulic to bring home to Yugoslavs that a breakdown of the economy can constitute as serious a threat as any political problem.