Lebanese Cabinet to look at ways to fund public sector pay rise

Prime Minister Saad Al-Hariri’s government in Lebanon in March agreed the first state budget in 12 years, but economists are worried about the impact of new taxes. (Reuters)
Updated 26 September 2017
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Lebanese Cabinet to look at ways to fund public sector pay rise

BEIRUT: Lebanon experienced a nationwide strike involving all public sector institutions as well as both public and private schools on Monday, with those on strike demanding a public sector pay rise.
A new salary scale was approved by Parliament only for the constitutional council to revoke it on Friday. The government then failed in its emergency session on Sunday night to agree on a plan to fund the salary scale law.
The one-day strike affected key sectors across the country such as courts, government hospitals’ administration, educational institutions and official government departments.
The cabinet held another session late last night in an effort to work out a way to fund $917 million public sector pay rise. The majority of ministers have agreed that the salaries should be paid according to the new law.
Economic expert, Ghazi Wazni said: “If September’s salaries are not paid in accordance with the salary scale law, the resulting unpaid additions will be considered as debt.”
He said that the government had three choices.
“(It could) issue a new law revoking the old salary scale law; issue a new law to suspend the old law; or postpone it with a ministerial decree,” Wazni added.
The salaries for the first month according to the salary scale law amount to more than 110 billion Lebanese lira ($73.3 million). Wazni said that the government could cope with that amount, adding that “the government can present a draft law within a month, with new tax items that can be added to the draft budget of 2017.”
Lebanese President Michel Aoun, who is in Paris on a state visit, said that he “had personally highlighted the reasons why the constitutional council revoked the law of financing the salary scale law.”
He confirmed that the salary scale law “will be implemented and in the event of any technical delay it will be recovered later through the Ministry of Finance’s available funds.”
Ali Hassan Khalil, the minister of finance, said: “The ministry has prepared the payment of salaries according to the new law in force; however, it is still to be confirmed during Tuesday’s cabinet meeting.”
He also pointed that the ministry had amended taxes, “as referred to by the constitutional council’s decision.”
Melhem Riachi, the information minister, stressed that taxes were of vital importance if the country was going to responsibly finance the public sector pay rise.
“The implementation of the salary scale law without taxes will turn Lebanon into (another) Greece,” he warned.
The Association of Public Administration Employees and other unions called for a rally on Tuesday in Riad al-Solh Square in Beirut, near the Grand Serail, where the cabinet session will take place.
Beshara Asmar, president of the Confederation of Lebanese Workers, said that the salary scale must be immediately implemented, condemning the tax hikes on employees with limited incomes, especially the VAT increase.
The MPs who signed the tax law appeal said that the government proposes very expensive projects without controlling the spread of corruption in state institutions.
In a statement read out by MP Boutros Harb following a meeting, the MPs stressed the beneficiaries’ right to the pay scale approved by Parliament.
He added that the MPs will suggest “amendments to the budget by increasing taxes on banks, increasing fines on maritime violations, as well as proposing other reforms.”


VW to stop doing business in Iran: Bloomberg

Updated 20 September 2018
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VW to stop doing business in Iran: Bloomberg

  • VW will still be able to do some business in Iran under a humanitarian exception
  • VW has scrapped plans it announced in July last year to sell cars in Iran for the first time in 17 years

WASHINGTON: Volkswagen has bowed to American pressure stemming from the US rejection of the multi-party nuclear deal and will end almost all business in Iran, Bloomberg News reported Wednesday.
The accord was reached Tuesday after weeks of talks between the German auto giant and the administration of President Donald Trump, said Richard Grenell, the US Ambassador to Germany, according to Bloomberg.
VW will still be able to do some business in Iran under a humanitarian exception, Bloomberg added.
In May, Trump pulled the US out of the deal it reached with Iran and five other countries in 2015. That accord lifted sanctions against Tehran in exchange for restrictions on its nuclear program.
Now, the US is reimposing those sanctions.
Bloomberg said VW has scrapped plans it announced in July last year to sell cars in Iran for the first time in 17 years.