Zagreb, 17 November 2009 - Eduard Andrić, President of the Trade Union of Tourism and Services of Croatia (STUH), affiliated to the UATUC, sent an open letter to Prime Minister Jadranka Kosor with the demand to exclude tourist companies in the portfolio of the Croatian Privatisation Fund from the reduction of wages in public and state companies:

Even though the Trade Union of Tourism and Services sent an open letter to the Croatian Government at the beginning of August this year after the press conference regarding the Government’s Decision as of 22 July 2009, published in the Official Gazette no. 88, which proposes to companies partially or fully owned by the state 10 percent wage reduction (which is later explained as 10 percent reduction of gross wage at the annual level) which should be agreed between trade unions and employers till 15 September, we received no answer and the pressures at the directors of those companies continued from three sides: directly from you through the media, letters from the Croatian Privatisation Fund and through presidents of supervisory boards.

Our demand is that tourist companies in the portfolio of the Croatian Privatisation Fund are excluded from the reduction of wages in public and state companies.

We dispute this Decision by the Government due to the following reasons:

There is a large difference between public companies, monopolistic companies and public institutions on one side and companies which according to all elements operate at the regular market and are only by a combination of circumstances in the portfolio of the Croatian Privatisation Fond. The implementation of your Decision can lead to their ruin.

These tourist companies do not have legal possibilities or the monopoly to charge for their services, as is the case with for example HEP (electricity company), HRT (national television), HAC (Croatian highways), but their turnover is the sole result of their business at the market.

There is also another “not so irrelevant” difference.

Namely, the wages in the tourist sector are far below the wages in state and public companies. To reduce the wages and their growth in companies which are significantly lower than the average wage in Croatia and to do the same in the sector of tourism is not the same thing. In these companies, for the wages which are closer to the minimum wage, this means making the minimum subsistence to the people impossible.

The reduction of wages in the sector of tourism sends the signal to stop the investment in the most important development factor of the tourist sector - its people. This decision would make the subsistence of a large number of people employed in tourist sector impossible. Those people are not just oppressed but also systematically underpaid when compared to the average wage in Croatia and especially when compared to other public and state companies such as INA (oil company), JANAF (oil pipelines), Croatia osiguranje (insurance company). The non-selective enforcement of this measure to hotel and nautical companies puts pressure on the best staff of those companies what can lead to the ruin of those companies. We believe that this is not in the interest of Croatia or the Croatian Privatisation Fond, especially in the current economic situation which obliges us to protect every single job. The limitation of consumption in the public sector creates a space for the development of private sector. These companies already operate in the conflict with private competition. The fact that they have not been privatized in a good way is not their problem.

The companies we talk about are in the sector of tourism, still the only safe Croatian export sector which not only creates new value in Croatian economy, gains foreign currency and has its market but is also one of the rare bright lights in the economic trends in 2009. They should be used instead of “freezing” and reducing wages, to increase the quality of services, quality of human resources and quality of staff. This is the kind of service the market needs. The company itself will bear the consequences at the market if it did not know how to do that.

The situation is completely different in state and public companies where the wage system is determined through collective bargaining and the income is increased through price policy or change of regulations by the state which then has to be financed by citizens or co-financed by the state.

Tourist companies which are, not by their fault, still in state ownership, should be given the possibility to have business models which are present in their competitors in the private sector or abroad. State, monopolistic and quasi-monopolistic companies do not have such competition.

Taking into consideration the disproportion of wages among companies in the scope of the Decision to be adopted by the Croatian Government, the specific features of business and the fact that this is the strategic sector which safeguards jobs in the time of recession, we expect from you to make the exemption in the implementation of this Decision for tourist companies in the portfolio of the Croatian Privatisation Fund.

We believe that you will not make us start striking in state-owned tourist companies, in accordance with legal regulations and after the unilateral decision of employers and evident collective labour disputes, at the beginning of tourist season 2010.