The public employees’ union [in Lebanon] promised to call off their threatened strike after Prime Minister Najib Mikati agreed Friday to forward the salary scale hike to Parliament on Monday, a day earlier than planned.
Mikati told reporters that the Cabinet would approve the salary hike for civil servants and public school teachers after securing funds for this project.
But the prime minister gave no hint how he would secure the projected $1.2 billion annual cost of the hike.
Mikati repeated that there wouldn’t be any new taxes to finance the raises.
The news was hailed by the leaders of the Union Coordination Committee, which promised to call off the open-ended strike scheduled to start Feb. 19 if the bill was sent to the parliament Monday.
Observers said that Mikati wanted to embarrass the divided parliament, which has not held any sessions since a high-ranking security official was assassinated last October.
They added that Mikati realized the salary scale had no chance of being approved by the Parliament and he was only buying time until a new Cabinet is formed after the June elections.
However, Mikati’s latest move is expected to infuriate the private sector, which has warned that raising salaries would cause inflation to soar and further exacerbate the budget deficit.
One possible scenario for the government is to borrow money to cover the cost of the salary scale for at least the first year.
But borrowing money amid declining revenues and rising expenditures could put more pressure on the treasury, which is expected to report the first primary deficit since 2001.
Proposals to raise the VAT and income taxes were rejected by most Cabinet members.
