PDVSA Begins Labor Talks

PDVSA and oil unions are about to start negotiations on a new collective labor agreement, a PDVSA spokeswoman said. Oil unions will present their proposal to the company board later this week. The proposal is likely to cost the state-run oil company between $4 billion and $4.5 billion, as the unions press for a wage hike of around $15 a day, a bonus of $1,500 for each worker and several other salary obligations under previous labor agreements that haven't yet been met by the government of President Hugo Chavez, representatives of several unions were quoted as saying in local papers Wednesday.

PDVSA will start talks with four different unions, the spokeswoman said. The most powerful union, Fedepetrol, has brought PDVSA to its knees several times over the past three years. It is likely to press ahead, as Chavez is already coming under severe pressure from different civil, political and economic sectors.

Venezuela is facing a serious fiscal crisis that threatens to aggravate volatile political, social and economic crises as political opposition calls upon Chavez to step down or hold early elections after events April 11 that led to his temporarily being forced out. Many private analysts say tax hikes, a reduction in the fiscal deficit and public spending, and raising capital on international markets would be necessary to keep the nation afloat. Finance Minister Tobias Nobrega has already acknowledged that he doesn't expect growth in the first economic quarter.