September 21, 2010 / 11:06 AM / 9 years ago

Czech workers protest wage cuts, cabinet holds firm

* Biggest protest in years

* Government determined to push through wage cuts

By Roman Gazdik

PRAGUE, Sept 21 (Reuters) - Thousands of policemen, nurses and clerks marched through Prague on Tuesday to protest against a plan to slash public sector wages, but the Czech government remained determined to push ahead with cutting the deficit. The labour protest, the biggest in years, is the first test of the new centre-right cabinet’s resolve to narrow the budget gap to 4.6 percent of gross domestic product next year from 5.3 percent this year.

The protest is part of wider discontent across Europe where unions have started a drive against austerity measures.

More than 10,000 public sector union members joined the march, according to police estimates. They blew whistles and carried banners saying “We are no slaves” and “Minister, no one will wipe your bottom in hospital for this pay”.

“I am scared I will lose my job. They are firing people where I work. (The government) should cut their own wages, not those of us, the poor people,” said Iva, a 44-year old caretaker at a state dormitory.

Union leaders said they expected the protest to grow to 20,000 people later on Tuesday.

The Czech Republic has enjoyed years of social peace between unions and companies, even during last year’s recession that eliminated tens of thousands of jobs in the private sector.

The Czech Republic’s public debt at 37.5 percent of GDP this year is at about half of the EU average and investors see the country as a safer bet than some euro zone countries including Italy, but the debt load has begun to rise fast.

The new centre-right government led by conservative Petr Necas made reduction of the deficit to 3 percent by 2013 and deep reforms of the pensions, welfare and health systems the main campaign agenda ahead of the main election.

“The reduction in the overall wage volume in the public administration by 10 percent is the fundamental point in the government’s agenda,” Labour and Social Affairs Minister Jaromir Drabek said in response to the Tuesday protest.

The unions have said they may accept some cuts if the Labour Ministry gives up its plan to reduce the fixed part of public sector workers’ pay, called tariffs, and increase the flexible portion of pay.

They claimed this may lead to much larger cuts than 10 percent, an argument the Labour Ministry has rejected as flawed.

The cabinet, which is united on the need to cut but not on the changes to the wage structure, was due to discuss the various proposals on Wednesday. (Writing by Jan Lopatka)

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