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(photo credit: Ariel Jerozolimski)
In an unprecedented move, Minister of Finance Abraham Hirchson took away the responsibility of Yaron Zelekha on the issue of credit to local authorities from Bank Otsar Hashilton Hamekomi, after the accountant general refused an order to provide credit for 20 debt-ridden local authorities.
"This solves the problem of local authorities, who had been refused credit," the Finance Ministry said in an official statement.
This move came as Zelekha failed to carry out Hirchson's instructions regarding to approve the provision of credit for 20 local authorities with deficits who were not able to pay out salaries to municipal workers. Last week, the Histadrut Labor Federation declared a general public-sector strike over months of delays of all or part of the salaries of some 12,000 municipal employees. The strike is expected to resume next week, if the treasury does not provide immediate solutions by the end of this week.
In reaction to Hirchson's move, the Histadrut Labor Federation said the approval was only a small step towards the payment of salaries, when 42 local authorities still were delaying municipal workers' salaries.
Following Zelekha's refusal, Hirchson decided under Article 34 of the Government law and acting with the approval of the Attorney General Menachem Mazuz to take over the responsibilities of the Accountant-General and approve the matter himself.
On November 27, the tenders committee at the Finance Ministry decided to exempt Bank Otsar Hashilton Hamekomi, which lends money to local government, from the requirement to compete through a tender process. That exemption still awaited the confirmation of Zelekha who, on Tuesday, decided not to ratify it.
In reaction to the tenders committee's decision and Zelekha's response, Hirchson decided to sideline the Accountant-General and approve the exemption, which will be effective until the end of March 2008.
In recent weeks, Hirchson also removed Zelekha's authority over the tender for banking services to state employees, and delegated it to Ministry of Finance Director General, Dr. Yossi Bachar.
The Histadrut Labor Federation last week indicated that Zelekha was responsible for severing attempts at a compromise with the civil servants union put forward by the Ministry of Finance. The Accountant General refused to delay the tender process by three months from the end of December 2006 to March 2007. The tender had been frozen to resume talks between the two sides and halt further strike action.
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