January 15, 2019 / 7:37 PM / a year ago

Tunisia govt, union fail to agree pay deal, strike likely

TUNIS, Jan 15 (Reuters) - Tunisia’s government and the powerful UGTT union failed on Tuesday to reach a deal to raise the wages for about 670,000 civil servants, union and government officials said, making a nationwide strike this week likely.

A strike would include all airports, ports and government offices.

Tunisia is under pressure from the International Monetary Fund to freeze public sector wages to help reduce the country’s budget deficit.

“The negotiations with the government ended without any result, and we will go on strike on Thursday,” Hafedh Hfaidh, an UGTT official, said.

A government source told Reuters the negotiations had failed despite a new proposal from the government, without providing any details.

It was not immediately clear whether more talks would be held Wednesday — sometimes strikes get averted at the last minute.

Tunisia’s economy has been in crisis since the toppling of autocrat Zine al-Abidine Ben Ali in 2011 threw it into turmoil, with unemployment and inflation shooting up.

About 670,000 public sector workers went on strike and thousands protested across Tunisia last November to press the government to raise wages.

The government aims to cut the public sector wage bill to 12.5 percent of gross domestic product (GDP) in 2020 from the current 15.5 percent, one of the world’s highest levels according to the International Monetary Fund.

The public sector wage bill had doubled to about 16 billion dinars ($5.5 billion) in 2018 from 7.6 billion in 2010.

Tunisia struck a deal with the IMF in December 2016 for a loan programme worth around $2.8 billion to overhaul its ailing economy with steps to cut chronic deficits and trim bloated public services, but progress has been slow.

The government wants to cut the budget deficit to about 3.9 percent of GDP this year from about 5 percent last year and 6.2 percent in 2017. (Reporting By Tarek Amara Editing by Ulf Laessing and Gareth Jones)

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