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Viewing cable 08TELAVIV2578, HISTADRUT THREATENS NATIONAL STRIKE

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Reference ID Created Released Classification Origin
08TELAVIV2578 2008-11-20 14:05 2011-08-24 01:00 UNCLASSIFIED Embassy Tel Aviv
VZCZCXYZ0000
RR RUEHWEB

DE RUEHTV #2578 3251405
ZNR UUUUU ZZH
R 201405Z NOV 08
FM AMEMBASSY TEL AVIV
TO RUEHC/SECSTATE WASHDC 9231
INFO RUEHJM/AMCONSUL JERUSALEM 0830
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