August 27, 2018 / 11:03 AM / a year ago

Croatia shipyard workers protest, seek government help over late salaries

ZAGREB (Reuters) - Around a thousand striking workers from Croatia’s largest shipbuilding group Uljanik protested in the capital on Monday, appealing to the government to help secure late salary payments and the long-term future of the business.

Workers from shipyards "3. May" and "Uljanik" protest in front of government building in Zagreb, Croatia, August 27, 2018. REUTERS/Antonio Bronic

The workers, who have been on strike for the last week, arrived in Zagreb on a fleet of about 20 buses and marched through town to the office of Prime Minister Andrej Plenkovic.

“Plenki, save us”, said one of the banners carried by the workers, referring to the Prime Minister’s nickname.

Economy Minister Darko Horvat said after a meeting between workers’ representatives and government officials that funds to pay July and August’s salaries could be secured by the end of the week.

“Today I will have information about which banks are ready to provide a loan. After that we’ll focus on restructuring as this is the last chance to help Uljanik become sustainable,” Horvat told reporters.

Djani Sverko, a union leader from Uljanik, said the strike will stop once July salaries have been paid. After that the workers expect new management to be appointed to restructure the business.

Croatia’s once prosperous shipbuilding industry has been struggling to survive since the country’s independence from Yugoslavia in the early 1990s. It has gradually lost business to Asian shipbuilders, such as South Korea, missing opportunities to modernise and produce more sophisticated vessels.

Loss-making Uljanik’s problems are also a potential threat to state coffers as the government has extended guarantees worth several hundred million euros for loans to the shipbuilder.

The company controls two docks in the northern Adriatic, in the cities of Pula and Rijeka.

Some 4,500 Uljanik workers who did not come to Zagreb continued with their daily protest marches through the streets of Pula.

European Union rules do not allow direct state financial help but last January the European Commission cleared Croatia’s state guarantee for a loan worth 96 million euros (£86.7 million) to help the shipyard stay afloat.

Earlier this year Uljanik chose local firm Kermas Energijaas its strategic partner and submitted a restructuring plan which was forwarded to Brussels for approval, which is still pending.

Privatisation and restructuring of its docks was a key requirement for Croatia’s accession to the EU in 2013 as the government had to stop providing subsidies and prepare its shipyards to survive on the market.

Uljanik was the only dock which did not restructure at the time as its business was seen as sound.

Workers control less than 50 percent of the company, with the state also being a minority shareholder. Other owners include several local banks and the country’s top insurer, Croatia Osiguranje.

In the past Croatia spent more than 30 billion kuna (£3.6 billion) to save its four shipyards, according to some estimates.

Reporting by Igor Ilic; Editing by Kirsten Donovan

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