Bosnian region adopts labour law reform sought by EU, IMF

BANJA LUKA, Bosnia (Reuters) - Facing down trade unions and opposition lawmakers, Bosnia's autonomous Serb Republic on Tuesday adopted a new labour law sought by the International Monetary Fund in return for fresh funds for the cash-strapped country.

The new law introduces more flexible labour practices and underpins a raft of legislative changes to secure badly-needed funds from the IMF and the European Union, which has launched a new effort to encourage economic and political reform in Bosnia in exchange for closer ties with the bloc.

As lawmakers debated the bill, riot police stood guard outside the parliament of Bosnia's Serb Republic, one of two autonomous regions that make up Bosnia under a peace deal that ended a 1992-95 war in the former Yugoslav republic.

Trade unionists said the law would make it easier for firms to fire workers in a country already mired in high unemployment. They argued it would take away some of the benefits they enjoyed under previous legislation and give broader powers to employers.

A protest banner read: "We do not want to be 21st century slaves."

Serb Republic Prime Minister Zeljka Cvijanovic said failure to adopt the law would close the door on foreign investment and international funds. "We are all determined to develop a real economy. I feel sorry for the workers but we cannot give up this law," she said.

Bosnia's other half, the Bosniak-Croat Federation, adopted new labour legislation in July. Passage of the bills by both regions was the main condition set by the IMF to continue talks on a new loan deal for Bosnia, after the previous arrangement expired in June.

Trade unions president Ranka Misic was ejected from parliament by security guards for obstructing the debate, prompting a walkout by opposition lawmakers. "We will decide what to do next. The time ahead will be turbulent and painful," said Misic.

The bill, however, passed by 49 ruling coalition votes in the 83-seat chamber.

(Writing by Maja Zuvela; Editing by Matt Robinson)