So Lula da Silva's government did, after all, have to retreat on some of the provisions of its draft pensions reform. Despite the affectation of dismay by a chorus of 'market-shapers', it was well-known from the outset that the government expected to have to negotiate some things away. What is yet unclear, amid all the hubbub, is what the concessions add up to, how they affect the main purpose of the reform -and, indeed, if the concessions seen so far are not to be followed by others.
The planned reform is a large, complex piece of legislation, and virtually nobody has produced detailed arithmetic on each of its components.
What does seem to emerge from the events of the past week-and-a-half is evidence suggesting that the government miscalculated, perhaps driven by the loud encouragement received from the 'markets' and opinion-poll results showing widespread public approval for the reform.
As the two main labour organisations, Central Unica dos Trabalhadores (CUT) and Força Sindical (FS), chose to negotiate rather than engage in industrial action, the government felt confident that the strike called by the more radical government employees would fail.
It did not. Support actually grew throughout the week, peaking at close to 50% of the public-sector workforce. Moreover, there was a clear threat that the judiciary -from law clerks to judges- might join in as well, bringing the court system to a halt.
The concessions. Many analysts say that it was that last threat that most influenced the government's midweek climbdown. Among the things it conceded were:
To maintain parity of pay adjustment between active officials and their retired counterparts.
To maintain the equivalence of pensions at the last salary earned for all those earning up to R$1,058 (US$370) a month. Pensions above that level would make a contribution to social security funds.
Exemption of the judiciary from the pension ceiling of R$2,400 (US$840) imposed on their peers in the executive and legislative branches.
The modified government proposal kept entitlement requirements for age (60 for men, 55 for women), years of contribution to social security (35 and 30, respectively) and years of public service (10).
Unsatisfied. As the weekend arrived, though, it became clear that not all the strikers were satisfied. The leader of the confederation of public employees, José Domingues Godoi Filho, said the amendments 'are far from what we wanted'. He vowed to continue the strike action indefinitely until the government abandoned its 'intransigence'.
The main sticking-points are: retirement age, the ceiling on pensions, and the mandatory contributions by higher-earning pensioners.
Most irksome for the government: on 21 July the union representing the country's 15,000 judges and court officials decided to join the strike. They have their own unsatisfied claims: full retirement benefits for future judges and maintenance of the current indexing system for judges' pay.
The deputy leader of the ruling Partido dos Trabalhadores (PT) in the lower chamber, Luiz Carlos da Silva, known as Professor Luizinho, remained conciliatory, saying that the government was never shut off from dialogue. Another key government whip in the lower chamber, Beto Albuquerque, was more outspoken, saying that the government would not respond to threats.
Currently, the pension reform is at the committee stage in the lower chamber: formal discussions on the reform are scheduled to start on 23 July and the voting to begin before the end of the week. The reform is not expected, in the best of cases, to get through both chambers of congress until October.
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