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vr union iceland, Ragnar Þór Ingólfsson
Photo: Ragnar Þór Ingólfsson.

Collective Agreement Negotiations Suspended

The labour movement cannot drive down inflation alone, the chairman of Iceland’s largest labour union told Vísir. He says wage negotiations have been put on hold due to announced municipal fee hikes as well as what he calls the government’s inaction. Inflation has measured 8% over the past 12 months in Iceland and rose by 0.1% last month.

The aim of labour and business representatives was to complete a new collective agreement by January 31, when the current short-term agreement expires. It is customary for Icelandic municipalities to announce changes to their fees annually, and these changes normally take effect on January 1. VR Union Chairman Ragnar Þór Ingólfsson says unions will have to re-examine the situation once these fee changes have been confirmed, but say that municipalities have proposed fee hikes between 5-30%.

“It’s just a grave situation,” Ragnar Þór stated. “We are going backwards. The government regarding housing issues, regarding fee hikes. We are seeing the cost of living index rise and prices rise. There is upward pressure everywhere. That all somehow works against a good result being reached in the wage negotiations. So all we can do is wait. We can’t be trying to do something alone on some boat in the middle of the ocean when no one is going to participate.”

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