ECONOMY

Employees take over Belgrade banks in protest at sudden closure

BELGRADE (Reuters) – Hundreds of employees barricaded themselves inside four Yugoslav banks yesterday in protest at a government decision to shut them down in the country’s biggest-ever corporate closure operation. [The crisis sparked the resignation of Yugoslav Finance Minister Jovan Rankovic, late last night.] Around 200 staffers stormed the main office of Beogradska Banka in downtown Belgrade yesterday morning, Beta news agency said. Workers at the other banks to be closed have also locked themselves inside central offices, fearing for their future in a country which has an official jobless rate of 30 percent. Yugoslavia, breaking with socialist-era practices, on Thursday ordered the closure of Beogradska Banka, Beobanka, Investbanka and Jugobanka as part of World Bank-sponsored reforms of its fragile financial system. Some 8,500 employees are affected by the closures in the impoverished Balkan country, whose reformist leaders are struggling to introduce a Western-style market economy following the 2000 ouster of authoritarian leader Slobodan Milosevic. Employees who locked themselves in the Beogradska Banka office – refusing to let anyone in or out – said they would stay until the government reversed its decision. «We are not going to give up on our bank,» read a hand-written placard placed on the outside wall of the building. A few police officers stood outside in the winter cold while dozens of bank staff could be seen inside.Investbanka labor union official Gordana Djukelic told Tanjug news agency that 800 of the 1,300 employees in its central office had been on the premises since Thursday evening. She said staff in the bank’s branches in three other towns had announced a hunger strike. The Bank Rehabilitation Agency said it was not feasible to rescue the banks, plagued by a mountain of debt and low public confidence, as it would cost up to a third of the country’s gross domestic product. Government ministers said around half of all affected employees could find new jobs in one of four new financial institutions to be set up, including an investment bank. Yugoslav President Vojislav Kostunica was expected to meet Serbian Finance Minister Bozidar Djelic and Yugoslav Central Bank Governor Mladjan Dinkic late yesterday on the issue. Government officials said household depositors and other domestic creditors would be compensated fully, but not foreign creditors which had granted 3.5 billion marks ($1.7 billion) in loans to Yugoslav firms via the banks without state guarantees. They include Greek metallurgy and engineering group Mytilineos and Italy’s automotive giant Fiat. In Athens, Mytilineos said Serbia’s administrative court had earlier ruled in favor of the group, asking Jugobanka to honor a $49 million letter of guarantee, but the bank lacked the cash and talks were continuing to get hold of other assets.