March 29, 2023



VR Leaves Negotiating Desk, Finance Minister Denies Blame

4 min read

The Prime Minister has expressed disappointment in VR’s decision to interrupt off wage negotiations with SA Thursday evening. The Minister of Finance doesn’t take into account his suggestions on the Central Financial institution’s interest-rate hike had been “the deciding issue,” RÚV studies.

Blended messaging amongst ministers

This morning, Ragnar Þór Ingólfsson, Chair of VR (the Retailer and Workplace Employees’ Union) confirmed to RÚV that he had walked out of negotiations with SA (the Confederation of Icelandic Enterprise) last night, which had these days been referred to the state mediator.

The causes, Ragnar acknowledged, have been “quite a few,” though the incongruous messaging of Prime Minister Katrín Jakobsdóttir and Finance Minister Bjarni Benediktson regarding the Central Financial institution’s interest-rate hikes “performed a job.”

Previous to the Central Financial institution asserting that it could be elevating rates of interest, VR and SA had been aiming in direction of an settlement predicated on a lot much less inflation and a lower fee of curiosity:

“However then the Central Financial institution introduced a hike, which, in actuality, altered the premises from which we had hoped to proceed,” Ragnar Þór instructed RÚV. “The PM subsequently invited us to a gathering yesterday morning, by which she tried to reset the events’ expectations. It was a reasonably good assembly.”

Ragnar seen that the occasions proceeded to Karphúsið (the facilities of the state negotiator) the place they hoped to proceed their negotiations at noon.

“We’ve hardly taken our seats when an announcement is made by the Minister of Finance by which he echoes the Governor’s (the Central Financial institution) message, which is totally at odds with what the PM had advised us. After that, the negotiations turned fairly troublesome. And when it turned clear the type of concepts that SA have been entertaining relating to a 14-month contract, which we had been discussing, it was apparent that there was no floor to proceed negotiating.”

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An interest-rate hike of some consequence

Following a cabinet meeting this morning, Katrín Jakobsdóttir talked about Thursday’s wage-negotiation collapse with RÚV. Requested if she had wished that the Central Financial institution had not raised charges of curiosity, Katrín responded thusly:

“The Central Financial institution makes its personal choices in accordance with the statutory goals underneath which it operates. It’s not my place to touch upon these choices, nevertheless it is clear that this determination led to the collapse of negotiations.”

“I remorse the truth that VR determined that it was acceptable to go away the negotiating desk right now, however I hope that we are able to discover some type of opening,” Katrín added.

“Greatest to talk actually”

This morning, Bjarni Benediktsson was requested to reply Ragnar Þór’s declare that his suggestions, justifying the Central Financial institution’s actions, had been a deciding subject throughout the collapse of negotiations.

“No, I believe it’s at all times finest to be utterly trustworthy about issues,” Bjarni remarked. “And I simply noticed an announcement from VR the place no point out is manufactured from my feedback; it’s possible that the premises had modified following the Central Financial institution’s choices, premises which possible have been the premise for the events’ negotiations.”

Bjarni instructed RÚV that it was clear that inflation would rise and that it was solely pure for the Central Financial institution to make use of those devices at its disposal to keep up inflation in confirm:

“However the reality is that the inflation forecasts have worsened, and the ghost of inflation is ready to observe us a bit longer, and inflation might be larger subsequent 12 months than we had hoped just some months in the past. The strain within the financial system runs excessive. We’re nearing most manufacturing capability and the extent of employment could be very excessive. Consumption is excessive, which is without doubt one of the components to which the Central Financial institution has pointed. It doesn’t actually shock me that the Central Financial institution continues to ship these clear messages, that it’s going to proceed to combat inflation, and it’s fascinating that each one of us cooperate to do the identical.”

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VR is Iceland’s largest commerce union, representing some 40,000 workers.


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