“National Reconciliation” in Iceland in Jeopardy Skip to content

“National Reconciliation” in Iceland in Jeopardy

Representatives of the employment market were unable to reach a solution on salary increases despite extensive discussions on Friday so a so-called “national reconciliation” on economic, wage and social issues is in jeopardy.

President ASÍ Gylfi Arnbjörnsson. Copyright: Icelandic Photo Agency.

“It is clear that wage contracts are hanging by a thread,” president of the Confederation of Labor (ASÍ) Gylfi Arnbjörnsson told Fréttabladid. “Our intention was to find footing in our relations with employers in terms of salaries but we weren’t successful. There is disagreement in terms of timing.”

Arnbjörnsson added that the loose grip which the government and the Central Bank have on the management of economic issues is not helping negotiators reach an agreement. The representatives of ASÍ’s negotiation committee were going to use the weekend to review their position.

The Confederation of Employers (SA) suggested that the ISK 13,500 (USD 110, EUR 78) monthly increase of the lowest salaries, which was supposed to take effect on March 1 but postponed because of the economic situation, would be introduced with two equal payments on July 1 and November 1.

SA also suggested that the salary increase, which is scheduled to take place at the beginning of next year, be postponed until September 1, 2010. ASÍ has rejected both suggestions.

Managing director of SA Vilhjálmur Egilsson said it is impossible for employers to meet ASÍ’s demand of raising the monthly salaries by the entire amount on July 1. “It is evident that we can’t handle it. We are heading back to square one.”

Vilhjálmsson said that with the suggestion, SA had wanted to reach an agreement that everyone could be content with so that individuals and companies could look towards the future with optimism.

“It’s not just a question of salaries but also the entire economic framework. It is about companies having the nerve to hire people and invest,” Vilhjálmsson stated.

Vilhjálmsson explained that an agreement with the labor market on the salaries issue was considered a basis for the so-called “national reconciliation” and now the conditions necessary for reaching such a reconciliation are no longer at hand.

“All the stability that people were planning to attain with a reconciliation on the wage contract will not be achieved and therefore we won’t have the same power of the course of events as we otherwise would have had,” Vilhjálmsson said.

Click here to read more about the “national reconciliation” talks.

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