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Cablegate: Histadrut Threatens National Strike

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

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