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The Government and trade unions

The behavior of Czech trade unions in the next few months may decide the fate of the country's besieged government. The coalition government is inherently unstable, lacking solid support in the parliament and being trusted by only some 20% of the Czechs. The coalition is disjointed, with Lux's Christian Democrats (KDU-CSL) increasingly positioning themselves to leave at new signs of trouble.

Such problems could emerge, should Czech trade unions decide to fight the government's recently announced package of austerity measures. Trade union leaders have so far been moderate in that they mostly agree the country has lived above its means and that budget cuts represent the necessary short-term solution to the current economic problems. What some trade unions and the government differ about is what should be cut.

The government has announced it wants to make by far the largest cuts in welfare and social payments. Some trade unions disagree. The umbrella Chamber of Czech and Moravian Trade Unions, led by moderate Richard Falbr, has tentatively agreed to tolerate the government's decisions. However, KOVO, a trade union representing steel workers--the second largest trade union organization in the country--has announced it will fight social and welfare payments cuts. KOVO leaders have announced they will wait for the government's concrete decisions but warn they may go on strike in the fall if the government's cuts displease them. If the government does not change its mind even after such a strike, a general strike will be called.

Virtually all trade unions in the country also disagree with the government's decision to go ahead with the planned liberalization of energy prices and rents at a time when the budget cuts have to be made. Should the combined impact of the austerity measures and the price liberalization prove to be too much for some social groups, trade unions may start protest actions.

In the last few weeks, the government has done its best to communicate with trade union leaders. It realizes that without at least tacit support from the biggest trade union organizations in the country, its stabilization program, relying on austerity measures, stands no chance. More important, the fragile government itself has a little chance of surviving, should a head-on collision with trade unions take place.

Czech trade unions--unlike some major trade union organizations in Poland and Hungary--are, in general,moderate. They have in most cases opted for negotiations rather than work stoppages and other protests. Some recent strikes organized by teachers' unions or unions representing railway workers were motivated as much by wage and working conditions demands as they were motivated by sincere attempts to protest the government's lack of resolve to introduce reforms in those areas.

Trade unionists--working in companies--seem to have been more aware of problems at the microecomic level than the government. Analysts working for Falbr's Czech and Moravian Trade Unions Chamber, warned of possible economic troubles already more than a year ago and propsed solutions. However, the Klaus government ignored such warnings, just like it for a long time ignored the unions themselves. The so-called tripartite talks--involving the government, employers, and trade unions--were abandoned several years ago, when the government was at the peak of its popularity. Now plans are under way to reinstitutionalize such talks.

Richard Falbr told government officials during the recent crown crisis that the main interest of Czech trade unions is the stability of the currency as well as the overall stability of the country. Given the government's past treatment of unions, Falbr could have clearly sought revenge. Instead, he decided to give the government one more chance.

But not all trade union leaders are as moderate as Falbr, who is said to control only one third of trade unions in the country. The limits of his power were apparent in February when railway workers went on strike. Falbr was only partly successful in his attempt to moderate between the government and radical leaders of the railway workers' unions.

The February strike offers some other lessons to the government. First, the government's initial rejections of negotiating with railway workers' leaders backfired in that they radicalized the unions. Second, the government miscalculated in its estimates of what economic loses it can afford. Third, it misjudged the public's reaction to the strike. Most people were angry at railway workers for going on strike over demands that could have been settled by negotiating but, in the end, most people were also critical of the government for its inability to negotiate and end the strike quickly.

Clearly, the Klaus government will need to change its style radically, to succeed this time. Some unions are certain to go on strike over social payments cuts. Should the government be unable to seriously discuss concessions, it may easily alienate the entire trade union movement. Any such development would push the country one step closer to early elections.

Reuters - 23. 6. 1997