Israel Braces for Strike Over Changes in Pensions

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Israel Braces for Strike Over Changes in Pensions

By Greg Myre, The New York Times

November 3, 2003

Israeli motorists lined up at gas stations on Sunday as Israel braced for a nationwide strike on Monday to protest the government's planned economic changes.

A wide range of public services, including buses and trains, garbage collection, post offices, banks and seaports, were expected to be affected by the open-ended strike. In advance, the country's main airport shut down for two hours on Sunday.

The protest is the most sweeping of several labor actions this year that have arisen from disputes between Finance Minister Benjamin Netanyahu and the Histadrut, Israel's large labor federation, which represents hundreds of thousands of government and private sector workers.

Mr. Netanyahu took office in February and has been aggressively pushing a major economic restructuring campaign that he says is essential to extract Israel from one of the worst economic downturns in its history.

Mr. Netanyahu is trying to substantially reduce the government's role in the economy, and has been cutting budgets and benefits and dismissing workers. But in a country founded on a socialist ethos, he has encountered considerable resistance, particularly from labor groups.

The latest protest has been called to oppose government changes in the pension system. The retirement age is to be raised to 67 for all workers, up from the current 65 for men and 60 for women. The Finance Ministry also plans to take control of pension funds held by the Histadrut.

Mr. Netanyahu and the leader of the labor federation, Amir Peretz, met overnight on Saturday and into the early hours of Sunday, but there was no sign of progress.

Weeks of negotiations have produced no breakthroughs, and the sides did not appear close to an agreement.

Israel's infrastructure minister, Yosef Paritsky, said the government had offered "very generous proposals, but I think Amir Peretz chose to make a political move and launch the strike in order to glorify himself."

Mr. Peretz has repeatedly accused Mr. Netanyahu of imposing ever-greater burdens on poor and working class Israelis.

As a warning of what is planned for Monday, workers at Ben-Gurion International Airport forced the cancellation of flights for two hours on Sunday afternoon, and the labor federation also ordered a halt in gasoline deliveries beginning on Sunday.

Long lines formed at gas stations in many cities, and some shortages were already reported by Sunday evening.

Workers at the phone, electricity and water companies were among those planning to walk off the job. Hospitals were to cut back to a holiday schedule, while schools and banks were expected to join the strike later in the week.

Prime Minister Ariel Sharon, who rarely makes detailed comments on the economy, flew to Russia on Sunday for a three-day visit. But, his cabinet did put emergency regulations into effect to allow the government to issue back-to-work orders to keep essential services operating.

Israel's economy, which prospered during the late 1990's, has shrunk by about 1 percent in each of the past two years, and is forecast to grow by less than 1 percent this year.

The three-year-old Palestinian uprising, and the tough Israeli military response, has greatly disrupted the regional economy. The Palestinian economy has contracted by roughly half, according to various estimates.

In another development, Israel granted permission on Sunday for up to 10,000 Palestinian laborers from the Gaza Strip to enter Israel for work. Combined with a similar move last week, about 15,000 Palestinian workers and businessmen can now commute to Israel daily.