By Gordana Katana
BANJA LUKA, Bosnia (Reuters) - Thousands of teachers and policemen demonstrated across Bosnia's Serb Republic on Friday against a 10 percent pay cut planned for non-government public workers next year, the first major protest in years against government spending cutbacks.
The government has drafted an austerity budget for 2013 of 1.94 billion marka ($1.3 billion), a 7 percent rise on the current year's spending only because of the costs of its growing foreign debt.
The budget, set to be debated next week by the parliament, cuts the public sector wage bill by 56.5 million marka, a move that trade unions say is unacceptable.
"The workers will not accept the announced cuts in wages and will use all available methods ... to save their rights," Dusan Jandric, the president of the Serb Republic's trade unions, said during the protest in the regional capital of Banja Luka.
Some 40,000 public sector employees joined a one-hour strike on Friday.
"This is more than enough," declared Jandric, applauded by around 5,000 protesters gathered near the government building. Some carried placards reading "Cut Yours, Not Our Rights" and "No Retreat, No Surrender".
The average monthly pay of teachers and policemen in the Serb Republic ranges between 800 and 1,100 marka (400-550 euros).
But the adoption of tight spending budgets by Bosnia's two autonomous regions by next week is the main condition set by the International Monetary Fund for releasing another tranche from its new two-year 405 million-euro ($523 million) stand-by loan facility.
The two regions, linked via a weak umbrella central government, need the IMF cash to plug their budget deficits.
The Serb Republic's prime minister Aleksandar Dzombic said the government would not give in to social pressures and that its priority was to save jobs and secure fiscal stability.
"We must bear in mind that all wages will be paid and that most wages in the public sector are still higher than the average," Dzombic was quoted as saying on Friday by the Banja Luka-based newspaper Nezavisne Novine.
Bosnia has not officially entered recession but the IMF sees the country's gross domestic product contracting by 0.7 percent this year because of the impact of the euro zone crisis, and growing by only 0.5 percent next year.
($1=1.505 Bosnian marka)
(Corrects typographical error in by-line)
(Writing by Daria Sito-Sucic and Maja Zuvela; Editing by Greg Mahlich)