Bus drivers from the urban transport company in Bulgaria's seaside city of Varna became the latest employees of a municipal company to negotiate wage hikes on Tuesday.
The size of the raise will be determined at a later time, when the municipal council will meet to vote on the proposal, Varna mayor Kiril Yordanov said.
Varna bus drivers followed the lead of their colleagues from capital Sofia, who threatened to go on strike earlier this month, unless their demands for a 50% raise were met.
Under pressure from trade unions, Bulgaria's Socialist-led cabinet repealed last month the cabinet ordinance that imposed harsh limits on wage hikes in loss-making state and municipal companies.
The payroll of Bulgarian state and municipal companies is 240,000 and most of them are employed in sectors like utilities, transport and mining, that badly need restructuring to become more efficient.
A wage hike of only 10% across the board would cost the Bulgarian budget BGN 190 M, but most of the demands range between 30%-50%, which would result in additional expenditures of BGN 570-950 M, according to calculations by Sofia-based think tank Industry Watch.
The Socialist-led government remains unwilling to privatise the loss-making companies, nor to restructure them, as both options would result in massive lay-offs that would cause social unrest.
Instead the cabinet is ready to cover the losses with state subsidies, repeating the pattern of the previous Socialist cabinet, which resulted in an economic crisis and street riots in January 1997.