05BUCHAREST1478 / 2005-07-01 11:51:00
Embassy Bucharest
                UNCLAS SECTION 01 OF 02 BUCHAREST 001478 
E.O. 12958: N/A 
TAGS: ELAB, PGOV, ECON, RO, finacial control, Strike 
1. (SBU) SUMMARY: Following 80 days of negotiations, railway 
workers went on a general strike on June 8 which lasted for 
23 days.  The GOR, with IMF-monitored fiscal restraints this 
year, had little flexibility in meeting the strikers' 
demands.  The strike ended with the unions obtaining only 
additional funds to improve working conditions, but no 
salary increase.  END SUMMARY. 
GOR: No Salary Increase, But How About Free Meals? 
--------------------------------------------- ----- 
2. (U) The collective labor contract with the railway unions 
expired on March 17.  In setting the stage for 
negotiations, Transportation Minister Gheorghe Dobre 
insisted to the railway unions that since the Romanian 
railway companies are on IMF's monitored company list, the 
unions' demands for salary increases cannot be met without 
the Fund's consent 
3. (U) The Transportation Ministry (MTCT) rejected demands 
for a salary increase, but proposed increasing the number of 
meal vouchers from 5 per month to 15, a proposal which only 
one of the union federations accepted. (The last salary 
increase paid to railway workers was 12% in March 2004.) 
The Ministry then opted out of negotiations, leaving the 
unions to negotiate with the National Railway 
4. (U) The railway unions and the National Railway 
Administration failed to make any progress after eighty days 
of negotiations.  Following a two-hour warning strike, three 
railway union federations began a general strike on June 8, 
demanding a 10.7% salary increase on the an average monthly 
wage of 7 million lei (about $235), 20 meal vouchers per 
month (meal vouchers are non-taxable, and can be used to 
purchase items in food stores) and better working 
conditions.  According to law, one third of the trains must 
remain in operation during a strike. 
Court Declares Strike Legal 
5. (U) The railway administration took the unions to court, 
requesting a 30 day postponement of the strike on the 
premises that the Romanian infrastructure is affected by 
floods and the union's actions jeopardizes travelers.  On 
June 8 the Bucharest Court of Appeals rejected the request 
and, in an unprecedented move on June 13, the Bucharest 
Court of Justice ruled the strike legal, the first time this 
has happened in the history of the Romanian labor movement. 
6. (U) Encouraged by the court's ruling, railway workers 
from the infrastructure union joined the strike, announcing 
that beginning June 20, all railway activity would cease 
between the hours of 7:00 and 11:00 A.M.  Transportation 
Minister Dobre warned the stoppage risked the strike being 
declared illegal, given that the mandatory one third of 
trains would no longer remain operational.  He further 
declared that the Ministry would sue the unions for damages. 
Nevertheless, on the morning of June 20, all railway 
employees went on general strike and train traffic ceased 
between these hours. 
7. (U) Railways management and the MTCT appealed the court's 
decision.  On June 22, a Bucharest tribunal affirmed the 
strike was legal, provided the unions ensured the compulsory 
one third of trains remained operational.  On the same day, 
the Bucharest Appellate Court suspended the railway 
infrastructure union's strike for 30 days, which resulted in 
the resumption of train traffic between 7 and 11 A.M. 
However, under Romanian law, the union can resume its 
protest after one month.  For the rest of the railway 
unions, the strike continued. 
Unions Request High-Level GOR Intervention 
8. (U) Union leaders requested the intervention of the Prime 
Minister and/or President Basescu.  Prime Minister Tariceanu 
explained that the only way the Government could accept the 
unions' salary demand was for passengers to accept a tariff 
increase "without criticizing it."  The union responded that 
using the strike to justify an increase in train fares 
distorts the truth, as the Government had already decided to 
raise ticket prices prior to the strike. 
Estimated Losses: $1.3 million Per Day 
9. (U) On a normal work day, the railroads transport 
approximately 250,000 passengers.  With only one third of 
trains in circulation, the MTCT estimated nearly 150,000 
people daily were affected.  The Railway Administration 
estimated losses of ROL 500 billion ($16 million) due to 
suspension of operations during the 23 day strike. 
10. (U) Besides this announced loss, other economic effects 
included delays in deliveries of products in general. 
Thermal power plants awaited deliveries of thousands of tons 
of coal from the National Brown Coal Company in Petrosani. 
A Jiu Valley mining union leader informed that before the 
strike 12-13 trains of coal departed every day, while during 
the strike, only three trains per day transported coal. 
Tourism was also affected, as out of the 20 seasonal trains 
scheduled to operate this summer to the Black Sea Coast, 
only six were in circulation.  Media reported increased road 
traffic due to businesses shifting freight to trucks and 
passengers using the ubiquitous long-haul passenger vans 
know as "Maxi-Taxis."  The proprietors of the passenger vans 
also reportedly increased fares. 
Court Action Ends Strike 
11. (U) In a final ruling on June 30, the Bucharest Court of 
Appeals declared the railway strike illegal, as it 
endangered railway safety and did not observe the legal 
requirement of insuring one third of trains remain 
operational.  The court's decision ended the strike, and 
train traffic returned to near normal in the evening.  The 
strikers obtained only some additional funds to improve 
their working conditions, but no salary increase.  Whether 
or not the unions will receive the ten additional meal 
vouchers initially offered by the MTCT is uncertain. 
Transportation Minister Dobre stated he would sue the unions 
to recover losses incurred from suspension of service, while 
union leaders responded that no damages could be recovered, 
as the losses occurred while the strike was declared legal. 
12. (SBU) The majority of Romanians were very unhappy with 
the strike, with many irritated over long train schedule 
delays and resentful of having their vacation plans 
disrupted.  Nightly news programs showed thousand of 
commuters waiting for hours in railway stations across the 
country.  The Prime Minister's smart move in advising the 
public that the only way the Government can agree to the 
unions' demand for higher salaries is to increase train 
fares created a new wave of discontent and virtually eroded 
any popular support the unions may have had. 
13. (SBU) Early in the dispute, the GOR recognized that wage 
increases, if granted in one sector of the economy, could 
possibly cause a ripple effect and lead to demands for wage 
increases in other sectors.  With the IMF team in town 
reviewing Romania's standby agreement during most of the 
strike and adamant that public sector salaries be frozen, 
the GOR was more or less required to "hold the line," a 
strategy which proved successful, at least for now. 
14. (U) AmEmbassy Bucharest's reporting telegrams are 
available on the Bucharest SIPRNET website: 

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