Банкеръ Weekly



Workers and trade-unions in Kremikovtsi have another reason to be happy. The managers of the iron and steel works declared they would raise the average monthly working salary by 17% and would make it BGN575. The raise will be due to optimization of the personnel and improved quality of both finished and new products. Everything would be just fine if Kremikovtsi was a profitable company with no unsettled debts. However, the company owes hundreds of millions of levs to the State budget, the social insurance, the National Electricity Company, Bulgargas, etc. The names of many other suppliers and creditors could be added to the list. The Privatisation Agency (PA) announced in turn that the owner of Kremikovtsi - Finmetals Holding, was not fulfilling its commitments under the USD300MN investment programme. The managers of the company frequently complain of the low prices of rolled metal. Moreover, the whole sector is about to fall in a crisis because of the decision of the US Government to impose protective duties on the import of foreign steel.In this extreme moment Kremikovtsi managers announced they would raise the salaries. The raise will cost some BGN800,000 a month. When social benefits are added, the amount will exceed BGN1MN. This is not a huge amount, considering how much the plant owes, but it will still help the managers gain the trade-unions' support. Union leaders made quite irrelevant statements a month ago by swearing by the plant's Executive Director Valentin Zahariev when he was in a conflict with the Government. In the meantime, it turned out that Kremikovtsi had not been paying pension insurance for its employees. Obviously, the managers appreciate a positive feeling from the trade-unions much more than they worry about the fiscal payments. They have a good reason to do so - workers are the only ones who are able to block the centre of the city in case the privatisation deal is revoked. Then the Government's chances to stay in power would be not greater than the possibility that Kremikovtsi pays off its debts.

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