After more than a decade of discussions, the new Bank of Israel bill was submitted to the Knesset today, despite bitter objections by the Bank of Israel workers committee and the Histadrut (General Federation of Labor in Israel). The Bank of Israel's employees have declared all-out war against the compromise announced by the Prime Minister's Office, which sets up an external mechanism for settling salary disputes.
Until now, the bill was held up by disagreements between the Bank of Israel and the Ministry of Finance; now it is an internal group at the central bank that opposes it.
This afternoon, the Bank of Israel's management and workers committee held an urgent meeting at the request of the Histadrut. At the meeting, the employees intend to warn of a series of severe protest actions that they will take in the near future.
The Knesset is scheduled to hold the first reading of the Bank of Israel bill next week, after which it will be sent to the Knesset Finance Committee. The bill will likely undergo major changes, sine the Finance Committee is determined to influence the final version. Finance Committee chairman MK Moshe Gafni (United Torah Judaism) said today, "My feeling is that the bill will pass, but it's important to note: I believe that there will be changes in it, including in the sections relating to the setting of salaries at the bank."
The new Bank of Israel bill includes a number of new arrangements. It stipulates, among other things, that reining in inflation will be the central bank's primary objective, an administrative council will be established to decide on budget and salary issues at the bank, and a monetary council will be established to jointly decide the interest rate with the governor.
The main change, which delayed the bill, is the granting of veto rights to the Bank of Israel's management on decisions by the Ministry of Finance Director of Wages, a right that no other public agency has.
Published by Globes [online], Israel business news - www.globes-online.com - on February 3, 2010
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