Costa Rica: Workers, Gov’t Dialogue on Fiscal Reform Ends in Deadlock

The fifth round of dialogue between Costa Rica’s workers’ unions and the government of President Carlos Alvarado has come to an end Tuesday without an agreement on proposed fiscal reforms, which had triggered the country's current 15-day-long national strike.

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The strike began on Sept. 10 to pressure the government into withdrawing the Law on Strengthening Public Finance currently under debate in the legislature.

The Costa Rican government has insisted that unions must suspend the strike as a pre-condition for negotiations while refusing to temporarily withdraw the bill in order to negotiate its contents with them.

Unions have argued the law will affect the middle and working classes by introducing a value-added tax that would affect the service sector and by limiting salary increases, bonus payments and severance packages in the public sector.

The unions insist that there are alternatives for strengthening public finance. In July, they sent 38 proposals in an alternative bill named the Just and Solidary Tax Reform, which focuses on ways to combat tax evasion and fraud, as well as increased or introduces more taxes on companies and banks that generate extraordinary profits, eliminating "luxury" pensions for former presidents, and reducing state financial support for political parties.

Labor minister Steven Nuñez announced the government “will not close the opportunities for dialogue.”

The National Union Alliance lamented that the government rejected the three proposals they presented during five meetings. “After five days of conversations and three proposals presented by the Social and Workers Unity, the government was incapable, until today, of reaching an agreement.”

The Union Alliance said the lack of agreement is the result of a “lack of political will” and announced they will now target the heads of each party with congressional representation, “who are the decisive actors to build the just and solidary fiscal reform Costa Rica demands.”

Union representatives also issued a call to continue the indefinite strike until there is a positive answer to their demands.