Serb unions threaten protests over austerity plan

BELGRADE, April 2 (Reuters) - Serbian unions said on Thursday they would stage mass protests within the next two weeks unless government officials take their fair share of spending cuts agreed last week to secure an IMF loan.

Serbia plans to freeze wages and pensions for 18 months and impose a 6 percent income tax surcharge to achieve spending cuts of 1 billion euros, the conditions set by the International Monetary Fund on a two-year 3 billion euro loan.

"The austerity measures will not be accepted and trade unions refuse to be just bystanders any longer," said Slavica Zivanovic, representing the the judiciary workers' union.

"The least we can do is to stage a protest," said teachers' trade union leader Branislav Pavlovic.

Trade unions representing 530,000 teachers, judges, doctors and police, all paid out of the state budget, said their monthly income had already fallen by 20 percent due to the sinking dinar and that they would not shoulder any additional burden. One of two police unions, representing 10,000 officers, said they did not rule out taking part in the protests.

Trade unions want the government to almost double the minimum wage for state sector employees, cut spending on cars, phone bills, petrol consumption and business travel for government administrative workers, and reduce the number of government agencies and part-time administrative staff.

Following a public outcry, the Finance Ministry has held a series of meetings this week to rework the savings.

Belgrade daily Politika said on Thursday the government was likely to opt for a hike in petrol prices and mobile phone bills, lower public sector wages and a 25 percent cut in ministries' budgets. It also planned to sack 6,000 or almost 20 percent of administrative workers by January 2010. "The government has completed a detailed calculation of fiscal adjustment worth 100 billion dinars ($390 million), of which 89 billion will be saved through cuts in state spending and 11 billion dinars will be raised through some new taxes," Politika said.

The IMF loan deal was vital for Serbia to win a pledge from its top ten commercial creditors last Friday to roll over more than five billion euros in credit to Serbia's private sector banks and companies which mature in 2009.

The government agreed to the spending cuts to make sure its 2009 fiscal gap falls to 3 percent of GDP. The IMF sees Serbia's economy contracting 2 percent this year. (Editing by Louise Ireland)