While the trio representing the International Monetary Fund, the European Commission and the European Central Bank continue to remain tight-lipped on the progress of bailout negotiations with the Government, it has once again emerged this week that economists representing these international bodies have repeated calls to facilitate the sacking of workers and reduce dole payments.
Reports this week in the Portuguese financial press are pointing towards increased tension between Lisbon and the ‘Troika’ of international experts over introducing new liberal labour laws.
While the government has shown an openness to debate certain stipulations of Portugal’s strict labour legislation, it is reportedly not ready to accept demands by the IMF, EC and ECB to streamline the labour market any further.
Seen as counterproductive to boosting the country’s competitiveness, international experts have reportedly tabled a labour law reform similar to that which was introduced in Germany in the 1990s.
According to Diário Económico, Portugal is being told that it should allow for more circumstances in which workers can be told that their services are no longer required without the need to pay stiff penalties.
The German model facilitates the sacking of workers, especially in smaller companies, with the criteria becoming more restrictive in proportion to the number of workers employed.
Another area being targeted by international officials is the payment of unemployment benefits, which allows some jobless workers to receive state funding to stay at home for over three years should they claim they cannot find employment.
The ‘Troika’ argue that subsides paid to the unemployed should be reduced with every passing month as a means to act as an incentive for the jobless to actively seek re-employment.
In 2010, the government made minor alterations to labour legislation, forcing workers on the dole to be less demanding in accepting job offers, while limiting subsidies to 75% of their earnings prior to losing their jobs.
Meanwhile, unconfirmed reports have suggested that the government could however be willing to accept suggestions that civil servants receive their leave pay and Christmas bonuses in treasury bonds and not in cash, as is currently the case.
Currently, the state spends close to €1.8 billion each year in order to pay state-employed workers their 13th and 14th pay cheques.
Brendan de Beer