(Podgorica, 13 June 2013) – Yesterday, the Confederation of Trade Unions of Montenegro (SSCG) once again proved that it is the government’s best ‘Ministry.’ During a sitting of the Social Council it helped the government secure enough votes to ensure that this body would pass a resolution supporting the VAT hike.
Even though the SSCG is well aware that the hike will have a disastrous impact primarily on the impoverished working classes whose interests they supposedly represent, out of loyalty to the government, its leadership nevertheless raised their hands in support of yet another brutal imposition on Montenegro’s citizens since last year.
It is troubling to know that the support of the Social Council will now be used by Finance Minister Radoje Žugić to argue for the VAT hike before Parliament. In voting for the increase, the SSCG leadership essentially gave legitimacy to current government policy, which can now claim that the working class supports a 2% increase in the VAT (in spite of the mass opposition from the trade-unions rank-and-file membership).
Unfortunately, the vote was to be expected given the long history of support (or at best lukewarm opposition) by this union to government reforms that have negatively impacted workers in the past. This has included support for last years ‘euro for euro’ tax, the recent crisis tax on the earnings of employees, as well as the current “KAP tax” (i.e. the VAT hike). This latest measure aims to displace the burden of repaying the debts of KAP’s Russian owners onto the shoulders of the working class. Such support is not surprising bearing in mind that during the privatization of KAP, the SSCG sat at the table in the Privatization Council to ostensibly represent the interests of workers.
Furthermore, MANS’ Research Centre has found that the SSCG’s support to the government over the years has not been limited solely policy matters, but also extends to businesses linked to the ruling Đukanović family, including the family’s bank.
A 2008 report by the Central Bank of Montenegro concerning the operations of the First Bank indicates that the SSCG deposited considerable sums in the bank, ranking it among its largest depositors. Information gathered from the aforementioned reports demonstrate that the SSCG held €8.12-million in the First Bank in October 2008 (deposited for three years, with an 8% interest rate). Only two months later, the deposit had shrunk to €5-million.
Since only a fraction of this information was available to MANS researchers, it is unknown when the SSCG deposited these millions in the First Bank, how much was earned on interest through these timed deposits, or whether the SSCG still holds deposits with the bank and in what amounts. The source of these funds also remains unknown.
What is indisputable, however, is that the unions millions helped sustain the First Bank’s liquidity at a crucial moment, since the SSCG was one of its largest depositors. Data from the Central Bank’s report show that even Aco Đukanović, the bank’s owner, had less funds deposited than the SSCG.
Because of such actions and the continual support of the SSCG for the Government of Montenegro, it is impossible for the Social Council to truly represent the attitudes of the working class, nor can the SSCG adequately represent their interests in any context.
Therefore, the support of workers and “their union” for the VAT hike, which the Finance Minister will triumphantly wave in Parliament tomorrow, is nothing more than an interest-based agreement between the government and the SSCG as long-time partners. It has nothing to do with the actual opinion of workers on this matter.
MANS once again calls on all MPs to reject the proposed “Law on the VAT” and avoid the illusion that anyone but the Russian and domestic tycoons whom it benefits, including their supporters in the Government of Montenegro, are in support of this law.
