Tunisian union warns against government freeze to wages

The Tunisian General Labour Union said yesterday that it would “absolutely” reject any attempt by Prime Minister Youssef Chahed’s government to freeze public sector wage increases, saying any such measure would be a risk to social stability.

Chahed has said he will negotiate with unions over freezing public wage hikes and state hiring as part of a broad economic reform package to help the country’s budget, control the deficit and spur growth.

The statement from the UGTT union, a powerful and politically influential movement, came after a meeting with the government.

The North African state faces debt service payments of $3 billion next year, and the central bank has warned the government may struggle to come up with the $450 million a month it needs to pay public employees without reforms.

Public wages represents a large portion of Tunisia’s state spending. At 13.5 per cent of GDP, it is one of the highest in the world, a remnant of the system of high state employment and subsidies from before its 2011 revolution.