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29 Adar II 5763 - April 2, 2003 | Mordecai Plaut, director Published Weekly
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NEWS
Local Authority Workers Strike
by Yated Ne'eman Staff and M Plaut

On Tuesday morning strike actions increased as services delivered by local authorities were stopped. Garbage collection was halted, parking tickets were not handed out, municipal fee collections ceased, and kindergarten assistants stayed home from work. Local authority workers are going on a strike of unspecified duration. The workers are paralyzing the main computer in every office.

The Histadrut is threatening to call a complete, general strike over all of Israel if agreement is not reached. Talks conducted on Monday ended with no decisions reached.

Employees in national government ministries and agencies did not conduct office hours or answer telephones since Monday. These include the tax authorities, the Land Registry, the licensing authority, the Ministry of the Interior Population Administration, the National Insurance Institute, and the Israel National Employment Service (INES). Minister of Finance Benjamin Netanyahu will meet the local administration leaders to find ways to solve the crisis.

Among other things, passports cannot be issued or renewed, and ID cards, birth certificates, and death certificates cannot be issued. Driving examinations are not being administered, and Department of Motor Vehicles offices are providing no services.

The strike is a protest against parts of the economic plan that are said to contravene the Histadrut collective work agreements with the government. The government has threatened to change various provisions unilaterally, through legislation, despite the existence of signed contracts. However Ministry of Finance director of wages Yuval Rachlevsky warned the senior Ministry of Finance officials, Minister of Finance Benjamin Netanyahu, and Minister without portfolio Meir Sheetrit not to alter collective work agreements through legislation. According to Globes Rachlevsky said that such an attempt would lead to economic unrest, strikes, and petitions to the High Court of Justice.

Rachlevsky said that trying to use threats of legislation to reach new collective work agreements with the Histadrut (General Federation of Labor in Israel) could boomerang, and prevent the parties from achieving the consensus essential to the success of the plan.

Rachlevsky's view were only partially accepted. The eventual cabinet decision said that an attempt would be made to reach agreement with the Histadrut. Nonetheless, the threat of unilateral measures and legislation was not withdrawn.

The Ministry of Finance said that officials at all ministry levels had been consulted in the preparing of the plan, and more than one opinion heard on every issue. The eventual decision concerning wages gave priority to negotiations between the Ministry of Finance and the Histadrut.

The Ministry of Finance will not be able to reduce its borrowing in the near future, due to the need to finance the large 2003 budget deficit.

The Government Debt Management Unit said that the government would raise NIS 4 billion in marketable capital in April, and NIS 5 billion in both May and June. The government raised NIS 6 billion in January, and NIS 5 billion in both February and March. The government plans to raise a total of NIS 30 billion in the first half of 2003.

The Bank of Israel cautioned that external events and forces beyond Israel's control have considerable impact on the situation within Israel. "It will only be possible to fully benefit from Israel's growth potential when the security- political situation improves and there is significant improvement in the West that is expressed in renewed demand for output from the high-tech industry," said one of the opening remarks in the central bank's 2002 annual report which was released on Monday of this week.

Governor David Klein wrote that even if the Knesset passes all of the treasury's austerity programs, the budget deficit may reach or exceed 4 percent of GDP. Klein warned that unless the austerity plan is adopted in full, the deficit between 2004 to 2007 could climb to as much as 6 percent of GDP.

Klein explained that the high level of public expenditure, burgeoning public debt, and the heavy tax burden reflect impaired credibility of budgetary policy, as evinced by high yields on the bond market. The low credibility investors attach to government deficit targets demands operative changes in the deficit-reduction law, according to the governor. The changes should tighten discipline to prevent the government from constantly changing its deficit target, as it did in 2002. Initially it was set at 1.5 percent, but it was gradually raised by the government to 3.9 percent of GDP.

The government hopes to pass the plan within the two weeks that remain before Pesach. Netanyahu has worked vigorously for the plan and so far managed to push it through the Cabinet relatively quickly.

 

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