IMF: reversals in the public sector pass bill of € 1,400 million – Jornal de Negócios – Portugal

The International Monetary Fund (IMF) conforms with the reversals of various measures adopted during the years of the troika, because of them stem from decisions of the Constitutional Court, but note that there arise risks for the public accounts: in cause are more 1,400 million expense euros, conclude the institution’s economists in a report published Thursday, June 9, on employment management and wages in general government.

After praising the savings with wages resulting restraint in admissions of workers, increasing the number of hours worked 35 to 40 hours, and measures such as the increase in contributions to ADSE, the IMF is a negative assessment of the effects associated with wage cuts defended and warns of the fiscal risks the reversal of several measures of the past.

“the Salarias cuts were less effective [other measures] to contain expenditure on salaries, due to successive decisions of the Constitutional Court and the recent reversal of reforms. ” . “The suspension of holiday pay and Christmas was rejected by the courts The second wave of wage cuts was also canceled and will be fully reversed in 2016, with a total cost of 0.3% of GDP,” it adds in the report – which, considering the 2015 GDP, equivalent to around EUR 540 million.

then there is the effect of “rollback or freeze” several measures of the past that so “will not generate the expected savings” the economists of the Fund, listing: a single salary scale would generate “significant savings” estimated at 0.4% of GDP (EUR 717 million); the only supplements table would yield “about 0.1% of GDP”, or EUR 179 million; to which also joins the return of 35 hours of work in the state “that will lead to an increase in overtime in some sectors, particularly in health.” Accounts made 1,435 million euros savings are at risk.

In view of these effects, and given that the decisions of the Constitutional Court “imply that consolidation should occur through structural reform of public employment,” the IMF economists argue the need for a comprehensive reform, but this time must have “a multi-year horizon, in order to better plan wage developments and to identify structural measures that can guarantee lasting savings.”