BELGRADE, Yugoslavia -- Yugoslavia will become East Europe's first country with a convertible currency on Jan. 1 under a decree signed Wednesday allowing citizens to exchange dinars freely for Western 'hard currencies.'
The decree was part of a package of radical reforms Prime Minister Ante Markovic submitted Monday to the federal parliament for approval. The reforms aim to lead country of 23 million out of its worst economic and political crisis in 45 years.
Maverick Serbia, the most populous of Yugoslavia's six republics, organized strikes Wednesday rejecting the currency measure and demanding the resignation of Markovic and his cabinet. Slovenia, Croatia, Bosnia-Herzegovina, Montenegro and Macedonia have offered qualified support for the federal program.
About 650,000 workers in state-owned companies held a 30-minute general 'strike of warning' against the reforms Wednesday morning in the Belgrade, the national capital, which is in Serbia.
The federal parliament approved the decree declaring Yugoslavia's currency, the dinar, convertible as of Jan. 1, making it the only currency in rapidly reforming Eastern Europe to adopt free exchange. The dinar exchange rate will be pegged to the West German mark and will not be changed till June 30, 1990.
New banknotes and coins will be issued at a rate of one for every 10,000 old dinars and all prices must be displayed in convertible dinars after Jan. 1. One German will buy 7 dinars; $1 will buy 12 dinars.
Markovic and the new Yugoslav government took office in March with Serbia's full support.
One month later Serbian news media launched a smear campaign denouncing Markovic, a Croatian, alleging he planned to 'exploit' Serbia in favor of the industrialized states of Slovenia and Croatia. Serbia's government claims the reform programs place a major burden on its people and those in other less-developed southeastern regions.
Only Slovenia and Croatia have openly advocated radical economic and political reforms, including a multi-party system.
The Serbian Trade Unions organized the Wednesday's strike, claiming the federal government has failed to curb inflation, which spiraled to an annual rate of 2,500 percent this month from 300 percent in March. Strikers said they could not accept the government plan to freeze salaries for six months.
The Markovic program plans to freeze wages and salaries until June 30, 1990, while liberalizing prices, with only about 20 percent of prices kept under control. Imports have been left without significant restrictions.
The program aims to cap inflation at 13 percent in 1990.
The government Wednesday increased prices under its control by as much as 15 percent, including gasoline, electricity, coal, metals, postage and rail transport.