HISTADRUT THREATENS NATIONAL STRIKE

UNCLAS TEL AVIV 002578 SIPDIS E.O. 12958: N/A TAGS: ELAB IS PGOV SOCI SUBJECT: HISTADRUT THREATENS NATIONAL STRIKE ¶1. Summary. The Histadrut Labor Federation threatened November 19 to call a national strike to protest the lack of a pension safety net in the economic stimulus plan (Septel) the Government announced earlier that day. Histadrut Chairman Ofer Eini, who did not announce a specific strike date, called the Government's proposal a "cover-your-ass plan" that provides no job or pension protection. Pensions in ISRAEL have been taking a hit recently as the ISRAEL economy struggles with the global economic crisis. A number of critics point to the deregulation of pension funds in 2003 and 2005 as the culprit. The reforms allowed pensions to make large gains, which have now been reversed, with some funds suffering large losses. One of the leaders in the push for deregulation was then-Finance Minister Benjamin Netanyahu (Likud) who, according to public opinion polls, leads in the race to become Prime Minister in the February 2009 elections. End Summary. ¶2. The Histadrut Labor Federation threatened November 19 to call a national strike to protest the lack of pension and job protection in the economic stimulus package the Government announced earlier that day. The $5 billion stimulus is the GOI's response to the ongoing damage to the Israeli economy caused by the global economic crisis, and reportedly includes the creation of 10,000 jobs. The problem, according to Histadrut Chairman Ofer Eini, is that it does not include measures to avert layoffs, or provide a safety net for employees who are reaching retirement age and seeing their pension savings threatened. Eini called the proposal "not an economic emergency plan, but a 'cover-your-ass' economic plan" that fails to secure Israeli pensions. Finance Minister Ronni Bar-On said the Government was "not excluding intervention in the financial market ... over the long term." Histadrut has demanded a safety net for pension funds as a condition for supporting the overall stimulus package. The labor federation did not announce a specific strike date. ¶3. Israeli pension funds did in fact increase substantially in value following de-regulation, as they rode the wave of the rising Israeli economy. The decline in the value of the pension funds is the first palpable manifestation of the faltering of the Israeli economy in the face of the global economic crsis to directly affect the general public. Thatpublic will be going to the polls in February 2009to elect a new Prime Minister and Government, an speculation has begun as to who might be blamed for the pension woes. ¶4. One possible target is ormer, and would be, Prime Minister Benjamin Netnyahu. Some commentators place at least part ofthe blame for the threatened pensions on Netanyau, who was a leader in the deregulation efforts while he was Finance Minister from 2003 to 2005. In September, Netanyahu said that his pension reforms had "ushered in five years of impressive profits for the pension fund," a quote that does not look as helpful politically now as it did at the time. Nevertheless, Netanyahu's numbers continue to rise in public opinion polls, which show his Likud Party with a growing lead over Foreign Minister Tzipi Livni's Kadima Party. ********************************************* ******************** Visit Embassy Tel Aviv's Classified Website: http://www.state.sgov.gov/p/nea/telaviv You can also access this site through the State Department's Classified SIPRNET website. ********************************************* ******************** CUNNINGHAM