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NEWS
Histadrut General Strike Near Settlement
by Yated Ne'eman Staff
A final agreement to end the week long Histadrut general strike was
reached. There are last minute problems with financing it but
it should be signed soon. A 3.6 percent wage increase was decided
on. The negotiators said there was pressure from the prime minister's
office, but Finance Minister Shochat insisted that the elections
did not play a role, even though the amount of the wage increase was
higher than expected.
The Director-General of the Finance Ministry, Avi Ben
Bassat, said yesterday that the Histadrut negotiators
finally presented realistic demands. With zero inflation and a
broad recognition of the importance of living within the
budget, there was no possibility of a major wage increase
for workers. Ben Bassat estimated that each one percent wage
increase adds NIS 700 million to the budget. Thus the agreement
will cost about NIS 3 billion.
Some estimate that the strike has cost the Israeli economy
NIS 3 billion.
In other economic news, on Monday the Bank of Israel reduced
the interest rate by another 0.3 percent leaving it at 7.7
percent. Though the interest rate has fallen steadily over
the past years, it is still high considering that Israel had
no inflation last year. Historically, the interest rate in
stable economies is 2-3 percent above the inflation. For
2001, inflation in Israel is estimated to be 1.5-2
percent.
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