After the “good news” that public sector salaries will be gradually returned to pre-troika levels, Portugal’s PS government has had to reveal the flip-side result: there can be no increases in 2017.
Already under fire in Brussels for policies aimed to “turn the page on austerity”, the government is now well and truly wedged between a rock and a hard place.
It has to show European leaders that it is serious about ‘playing by the rules’, but this is taking it ever closer towards conflicts with the unions.
The reality is that public sector salaries have not increased since 2009. After the cuts imposed in 2010, the PS’ decision to restore workers’ pay still sees families on what unions see as reduced levels.
Said Arménio Carlos of the country’s largest CGTP confederation of Portuguese workers: “Salaries need to go up in order to motivate the public sector and increase people’s spending power.”
It is the same argument used by the government when it reversed many of the last administration’s policies, but one which opponents argue is fundamentally flawed.
Nonetheless, José Abraão of Sintap, the syndicate of public sector workers, say his members feel “defrauded” by the government’s position – while, for the moment, reaction from left-wingers supporting the PS remains muted.
What is certain is that the whys and wherefores of public sector salaries are overshadowed by the threat of fallout from the parlous state of the country’s banking sector.
President Marcelo said on Monday that the most pressing issue on the economic horizon is “to conclude negotiations between Portugal and the European Commission on Caixa Geral de Depósitos – the State bank in need of at least €5 billion in recapitalisation (click here).
“We are all aware of the urgency,” he told reporters, “and hope that in the next few days there will be knowledge of the conclusion of negotiations between Portugal and the European institutions.”
Expresso points out that President Marcelo expected negotiations to be completed within 10-15 days on July 5, and the “truth is that time limit has already expired”.
Photo: ANTÓNIO COTRIM/LUSA