(Adds comment from union head, estimated cost of deal)
TUNIS Dec 7 Tunisia's powerful UGTT union has
cancelled a planned public- sector general strike after reaching
an agreement with the government on salary increases covering
the next two years, officials said on Wednesday.
The agreement reduces the prospect of widespread social
unrest over austerity measures proposed in the 2017 draft
budget, though the government still faces protests and
industrial action from several sectors.
The UGTT had called a strike for Thursday over a proposed
freeze on public-sector wage increases. Under a compromise deal
signed on Wednesday, the government will spread wage rises over
the next two years, government and union officials told Reuters.
"This agreement will allow the country more social stability
and let it avoid any social tension," said UGTT head Hussein
Abassi. Civil service minister Abid Briki said the deal would
cost the government 963 million dinars ($418 million) in 2017.
The UGTT also said it had also cancelled a private-sector
strike after entering salary negotiations with the UTICA
industry and business employers' association.
Tunisia has been praised as a rare Arab example of moderate
politics and democratic transition since the overthrow of
autocrat Zine El-Abidine Ben Ali in a 2011 uprising. But its
economy has struggled and it faces pressure from international
lenders to reduce public spending and cut the deficit.
The International Monetary Fund says public-sector pay in
the North African state accounts for about 13.5 percent of gross
domestic product, one of the highest rates in the world.
Many Tunisians are concerned about the rising cost of
living, unemployment and the continued marginalisation of rural
areas - factors that helped fuel the country's uprising and,
more recently, Islamist militancy among some disaffected youth.
(Reporting by Tarek Amara; Editing by Aidan Lewis and Larry