August 29, 2012 / 6:37 PM / 7 years ago

Most Brazil public workers to end strike on Monday

* 90 pct of striking employees to resume work

* Fiscal discipline puts Rousseff at odds with base

* Central bank, tax authority workers holding out

BRASILIA, Aug 29 (Reuters) - Unions representing 90 percent of Brazil’s striking public workers have agreed to return to work on Monday, accepting tough terms set by President Dilma Rousseff, who insisted on putting fiscal discipline over the demands of her own political base.

While most of the public sector has been functioning normally, strikes by federal police and other workers demanding better working conditions and raises ranging from 4 percent to 150 percent have sporadically crippled operations at airports and some key ministries since May.

Rousseff, whose Workers’ Party began as a union movement, offered a 15.8 percent wage increase over three years, barely covering inflation expected for the period. Unions for 18 categories of public employee accepted the terms Tuesday.

Rousseff’s administration feared any raise beyond that could imperil several policy goals, including her quest to drive down interest rates. The central bank’s most recent inflation report, published in June, identified wage negotiations as “an important risk” to future price movements.

Pay raises in Brazil’s public sector often set a baseline for the private sector, where unions in the oil, automobile and other sectors are also engaged in contentious wage talks.

Not all striking federal workers have agreed to the terms. Brazil’s Planning Ministry said Tuesday it had received signals the federal police would not accept the proposal, while central bank and tax authority workers have rejected the deal.

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