Government seeks to send project in July; formula includes state guarantee, increase in retirement age, tax on liabilities and contribution from banks
The Bank Retirement and Pension Fund (CJPB) requires, before October, to achieve a formula to approve a rescue for more than US$660 million.
The total amount would be covered with the contribution of the Executive Branch as guarantor, another part from contributions of workers and liabilities, and another part with resources from financial institutions, they explained to Montevideo Portal Sources familiar with the deal.
The rescue must be approved by law before the end of October. The idea of the Executive Branch is to be able to present the bill to Parliament in mid-July, they told Montevideo Portal government sources.
In the midst of the negotiation, the bank union (AEBU) ordered the start of a round of strikes, which began on Tuesday with the closing of cashiers starting at 3:30 p.m. at Bandes Casa Central, Banco Nación, República Afisa, Nixus Ciudad Vieja , Indumex Headquarters. Also in the branches of Banco República in Punta de Rieles, Piedras Blancas, Paso de la Arena, Cerro, Paso Molino and Colón, as well as in all the companies of the financial system in Colonia, San José, and Maldonado.
From the Executive Power they understand that these stoppages do not imply an obstacle to the negotiations, but are part of a matter that is complex and has consequences that are assumed to be negative by the union, the sources said. Therefore, in the government they hope to reach an agreement.
The formula and the negotiation
The Executive Power negotiates with the union and the banks a formula that touches different edges.
On the one hand, there will be an economic part that will be carried out by the State.
One of the ideas on the table is to include a CJPB bond with a state guarantee, reported the weekly Search last week. The sources consulted by Montevideo Portal They said that the mechanism for the contribution of the Executive Branch has not yet been defined. Another possibility is to define some type of loan to the box, which should be paid once it achieves the sustainability of its finances.
On the side of workers’ contributions, the increase in the retirement age from 60 to 65 years is on the table, something already applied at the level of the general reform of social security. But in addition to those years of more activity, and a faster transition than the general regime, to cover the required amount, changes in the replacement rates would be required, in addition to a possible new tax on liabilities retired after 2008.
The negotiation takes place in a group that meets every week. The commission is made up of the Ministry of Labor and Social Security, the Ministry of Economy and Finance, the Planning and Budget Office, the Association of Private Banks (ABPU) and the Association of Bank Employees (AEBU).
consulted by Montevideo Portal, the president of AEBU, Elbio Monegal, said that the negotiation is “very blocked”. Although he assumed that there is a fluid dialogue, the trade unionist pointed out that at the moment there is no concrete progress. However, he assumed that the solution will involve contributions from all parties.
“We are playing a race against the clock because the reserves are running out,” Monegal said.
The executive director of the ABPU, Bárbara Mainzer, said in first morning from El Espectador that “a solution will be found” between assets, liabilities and companies. “The banks are going to contribute,” he said. In any case, he said that “it is not easy” to find a solution, and that, from the point of view of the companies, due to the size of the deficit, an increase in the Employers’ Complementary Party (PCP) is not enough, as proposed the Union.
Regarding the increase in the retirement age, the representative of the union admitted that a faster transition for the increase in the retirement age is on the table, but did not give details about deadlines.
Mainzer also said that the projected shortfall for the next 10 years is about $660 million. (Montevideo Portal)
