A threatened strike by the Histadrut labor federation would cost the economy NIS 200 million a day, the Manufacturers Association of Israel said Thursday, stressing that the cost would be too high to bear.
"The business sector can not endure even one day of striking... especially after the heavy damages caused to the economy as a whole and the business sector in particular during the 35 days of fighting in the North," said MAI president and Federation of Israeli Economic Organizations chairman Shraga Brosh.
The bulk of the damage would be caused by the closure of Israel's ports, banks and public sector, the association said.
"Direct damage to the economy due to the war will reach NIS 11.5 billion in terms of loss of GDP, and thousands of businesses in the North have yet to recover economically," he added.
Brosh called on Finance Minister Avraham Hirchson and Histadrut chairman Ofer Eini "to demonstrate responsibility and solve the wage crisis in the local authorities immediately and in cooperation."
The Histadrut said Thursday it would "close down the economy" on Tuesday if arrangements were not made by Sunday to pay the wages of local authority and religious council employees and firefighters.
"Dozens of local authorities and religious councils have not paid workers' wages for months... Thousands of authority employees are losing their pension rights because the authorities are not transferring money to the pension funds," Eini said. "We did all we could to resolve the crisis through talks. We turned to the National Labor Court - but we realized that we had no option but to close down the economy. As is known, I believe that striking is the last resort to solve crises, but in this case the strike is most justified," he said.
The Histadrut declared a labor dispute on July 12, but put off further action due to the war. This week, Eini told Hirchson and Interior Minister Roni Bar-On, "The grace period has ended."
Severe financial and management problems at local authorities in recent years have led to a national program to "rehabilitate" the authorities, which are to receive NIS 200m. in additional funding under the draft 2007 state budget approved by the cabinet on Tuesday.