Uruguay unions warn of 'zero cost' budget, plan June 10 protest

Uruguayan state employee unions are gearing up for renewed conflict with the government, citing concerns over the upcoming budget's "zero cost" principle. The Confederation of State Employee Organizations (COFE) and the Pit-cnt union confederation are set to discuss the impact of the Ministry of Economy and Finance's guidelines. A meeting on June 3rd will propose an urgent session of the Public Sector Collective Bargaining Superior Council to analyze the situation and plan actions, including a protest on June 10th.

The Ministry of Economy initially asked government departments to draft proposals under a "zero cost" criterion to maintain fiscal responsibility. While the government clarified that resources would be available for specific areas through "internal reallocations of funds", moving money between agencies without increasing overall spending, this has sparked worry among public sector unions. They fear a hidden budget cut.

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The situation generates “a lot of concern,” not only in COFE but in all the unions included in the National Budget.

José Lorenzo López, the general secretary of Pit-cnt and COFE, expressed significant concern, not only within COFE but across all unions included in the National Budget. He highlighted that the upcoming budget review will not only be "zero cost" but will also only authorize credits executed in the previous year. This, he warned, means that if some agencies or ministries did not fully utilize their allocations, their available funds for the next fiscal year will effectively be reduced, constituting a budget adjustment.

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It will not only be zero cost, meaning it will not have an increase in the budget, but only executed credits from the previous year will be authorized.

López pointed out that this effect was not clearly communicated after the Council of Ministers meeting, although Economy Minister Gabriel Oddone hinted at "reallocations of spending." López criticized this approach, stating that if there's no budget increase for policy development, funds will inevitably be moved from one area to another. He questioned how the logic of fiscal balance would impact areas that couldn't fully execute their credits.

COFE believes that if the budget increase is adjusted through the "zero cost" logic and by only authorizing amounts actually executed, the situation will closely resemble the previous period. López indicated that this will be a central point of contention for the Pit-cnt during the planned protest and mobilization on June 10th, as the confederation aims to make budgetary issues a key focus of its platform.

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Reallocations of spending means that if there is no budget increase for the development of some policies, they will obviously take from one place to put in another.