Govt and Unions Sign Pay Deal

The deal was reached on Tuesday last week, while the signing comes only hours after a key trade union approved the deal.

Its provisions will enter into effect in June if parliament passes a bill to the effect at its session on Tuesday.

The savings will be reached through a mix of progressive cuts in base pay, a cut in government contributions for the top-up pension plan, and cuts in certain bonuses and sickness benefits.

Another EUR 99.3m and EUR 25.3m are to be saved in the two years respectively through redistribution of material costs.

Interior Affairs and Public Administration Minister Gregor Virant and trade union representatives taking part in the signing hailed the outcome as a win for social dialogue on Monday.

Both sides have demonstrated that they can agree on difficult and unpopular issues that cannot be avoided in time of crisis, Virant said.

"There is no real reason for celebration, as we have cut our pay," he said, adding that this was "the right thing to do".

Only hours before the signing, the influential teachers' union SVIZ endorsed the deal with around 78% support to ensure sufficient support among public sector trade unions for the deal to be valid.

After the internal vote, SVIZ Secretary General Branimir Štrukelj said that the cuts have now hit the last still-acceptable level.

Štrukelj assessed that there was little difference between the policies of the current government and its predecessor. "It's still all about austerity, which is the wrong logic."

But at the signing he commended the government's readiness for proper dialogue and willingness to look for compromises, which he said was the main difference between the current outfit and its predecessor.

Yet he also warned that his union would defend educational standards, including class size rules, with all available means if the government was to reopen the issue.

Virant said that under current budgetary presumptions, another cut in pay for public sector workers would not be needed, although he admitted that the situation could change. The government is doing everything to restart the economy, he added.

Finance Minister Uroš Čufer also welcomed the deal as a step in the right direction. Asked if it would be enough for the EU, Čufer said that Slovenia was making the cuts because of itself and not Brussels, while adding that it would by all means be a positive message.

With the backing of 24 of 34 public sector trade unions, the newest deal enjoys the broadest support among trade unions of all cuts implemented since the crisis began.

Along with the agreement on pay cuts, the trade unions also signed an agreement to halt a strike started last April and resumed this January after the previous government reoopened talks on pay cuts.

Despite the broad support, at least eight trade unions have declined to sign up to the deal, including both police trade unions, the doctors' union FIDES, the Journalists' Union and the cultural workers' union GLOSA.