Icelandic cabinet advances plan to protect wage agreements

Prime Minister Kristrún Frostadóttir says a government action plan to protect collective wage agreements will be announced soon with labour-market representatives, Morgunblaðið reports. The proposals were presented at a cabinet meeting yesterday.

The government has been in active dialogue with labour-market representatives since May, Frostadóttir told the newspaper, adding that the discussions had produced several things beyond the proposals.

She said lowering increases in fixed-amount taxes and fees to 2.5% had always been under consideration, although doing so would require sacrifices from the Treasury. “I think it is also right for people to understand that this is money, and giving it up is not automatic,” she said. Fixed-amount taxes and fees have historically followed the previous year’s inflation.

Asked what would happen if the proposals were not enough, Frostadóttir said the government would have to assess the situation if collective agreements did not hold. She said the government hopes the measures will be sufficient to avoid disruption this autumn.