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(photo credit: Ariel Jerozolimski)
The Bank of Israel, its workers union and the Finance Ministry have until Wednesday to hammer out an agreement on salaries and benefits after employees walked off their jobs Monday, sparking a series of events that raised speculation that Bank of Israel Governor Stanley Fischer would resign.
The strike move by employees, who commenced a work "slowdown" last week followed a letter from Fischer on Sunday to Finance Minister Avraham Hirchson, Eli Cohen, the ministry's director of wages, and Rimona Leibowitz, chairman of the central bank's workers union that claimed the year-long wage dispute could damage the central bank's international reputation and the country's economy.
The walkout prompted Fischer to call an evening news conference, which raised speculation he might leave his post, but it was canceled after the Finance Ministry agreed to "intensive" talks with striking central bank workers.
The Finance Ministry, in agreement with Prime Minister Ehud Olmert, has agreed to "enter immediate and intensive negotiations on a final agreement," the Bank of Israel said.
The Tel Aviv Stock Exchange's benchmark TA-25 index, which fell as much as 1.4 percent on news of the scheduled press conference, ended up about 0.4%.
Daniel Rapoport, a trader at Leader & Co., said investors were concerned Fischer might quit, although he termed such a development as "unlikely."
Fischer's chief of staff, Gaby Fiszman, would not say what was to have been discussed at the press conference and refused to comment on Fischer's job plans.
He did say that parallel talks were being started between the central bank and both the Finance Ministry and the workers union, and that hopefully an announcement of an agreement would be made after the 48-hour period. Alternatively, he said, the Governor would make the announcement he had planned to make Monday night.
Union representatives, however, claimed Monday night that they had not been invited to participate in the talks.
"We're trying to be involved but we were told we're not wanted," said Gali Gabbai, spokeswoman for the union. "There's no such thing as a collective agreement without the workers. Right now the employees are not invited."
She said the strike was expected to continue but that there would be a meeting Tuesday morning at which any developments would be discussed.
"The bank employees will not serve as a punching bag for anyone," an earlier union statement said. "The union has compromised for months with the intent of reaching an agreement."
Central bank employees walked off their jobs at noon Monday with the union claiming that Bank of Israel employees would not transfer funds to automatic cash machines, clear funds for the Tel Aviv Stock Exchange or invest foreign currency reserves, among other services.
Bank representatives told The Jerusalem Post they were making arrangements for continued customer service and that the strike would have no impact on their business so customers need not worry about cash shortages. That, of course, would depend on the duration of the walkout but one bank representative said there would be no cash problems even if it extended for a two-week period.
Wage Director Cohen said Sunday he was resuming an inquiry into central bank wages at the end of which he may cut salaries for Bank of Israel employees, and may request reimbursement from employees and pensioners for compensation deemed improper.
In a letter to Fischer late Monday, Hirchson said he was freezing until next Sunday, the letters to the central bank workers summoning them to a hearing over the excess pay it wants back.
The union says that it had reached a wage agreement with Cohen's predecessor, Ozer Berkovitz, who died suddenly in May 2006, a day before an accord was to be signed.
State Comptroller Micha Lindenstrauss said in a report in April that Bank employees received excessive benefits. Bank of Israel employees were among the highest earning public employees in 2004, with one-fifth earning more than government ministers, according to a June 2006 Finance Ministry report.
The ministry published a list Sunday of 20 deviations from the norm, including payment of car expenses to workers without automobiles or driving licenses, automatic advancement of rank upon retirement and shorter hours than other civil servants.
Bloomberg contributed to this report