Netanyahu faces Likud rebellion over price hikes

Histadrut, local authorities and Manufacturers Association threaten general strike within two weeks over increased economic hardships.

By GIL STERN STERN HOFFMAN,
February 7, 2011 20:15
4 minute read.
Gasoline prices [illustrative photo]

Gasoline prices gas tax 311. (photo credit: Marc Israel Sellem)

Prime Minister Binyamin Netanyahu, who has endured constant attacks on his foreign policy from the opposition, faced criticism of his economic policies on Monday from coalition partners and members of his own Likud faction.

The criticism focused on recent rises in the prices of gasoline, water and bread.

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Netanyahu tried unsuccessfully to preempt the rebellion by telling the Likud MKs at their weekly meeting that the prices had risen not only in Israel but everywhere.

“It’s happening because of the rise in demand, especially from recovering Asian economies,” Netanyahu, who is a former finance minister, said. “Prices have risen around the world on gas, bread, water and other items. I know this has hurt many families and we are working on solutions.”

With members of the press in the room, the prime minister pleaded with his faction to behave responsibly and not push for policies that might make them look good to their constituencies but harm the economy.

“We will have discussions and hear alternatives,” Netanyahu said. “My decision will be responsible, not populist. Nothing is easier to be than a populist, and nothing is harder to be than responsible.”



The moment the press left the room, the barrage on Netanyahu and Finance Minister Yuval Steinitz began.

MK Carmel Shama-Hacohen told Netanyahu: “You might call it populism, but I think it’s better than autism.”

Knesset Social Welfare Committee chairman Haim Katz warned: “You won’t be prime minister in the next term if you continue with such policies. We will go back to 12 mandates and lose the next election.”

MK Danny Danon told Steinitz: “You have got to climb down from Mount Olympus. The public is screaming and you’re still not hearing it.”

Vice Premier Silvan Shalom, like Netanyahu a former finance minister, boasted that when he faced similar challenges, he raised taxes on the stock market so everyone would share the burden. He bragged that in January 2003, following his term as finance minister, the Likud won 38 seats.

“Finance minister is a difficult job that does not make you popular, so everything must be done with common sense and balance,” Shalom said.

“The election is two-and-a-half years away, and we want to win it.

There is a bad situation and activists are threatening not to vote Likud, but there is time and we can change.”

After additional MKs suggested that rival parties might harm the Likud by focusing on socioeconomic issues rather than security, Minister-without-Portfolio Bennie Begin cynically suggested, “In that case, let’s lower the taxes and raise the terrorist attacks.”

Shas also flexed its muscles on Monday, saying that it would not support price rises in Knesset votes.

Steinitz responded to the criticism by blaming the media for misinterpreting his recent economic steps, because “the press wants to topple us.”

Meanwhile, as people in neighboring countries continued protests this week over the increasing cost of basic goods such as fuel, bread and water, an agreement among the Histadrut labor federation, the Manufacturers Association of Israel and the Union of Local Authorities (ULA) could paralyze the country with a massive general strike in less than two weeks, the three organizations announced on Monday.

In a joint statement, Histadrut chairman Ofer Eini, ULA chairman Shlomo Buhbut and Manufacturers Association head Shraga Brosh said this was a “historic partnership” and the first time they were taking joint action against such price increases.

“Every mayor of every city in Israel agrees that the increase in prices will be catastrophic for Israeli society and is simply not acceptable,” the statement read.

“We are not talking about a sectorbased battle, but about a social fight against the rising prices.”

A spokeswoman for the ULA told The Jerusalem Post, “The lower- and middle-class people in this country are facing economic breakdown, with many people unable to pay their municipal taxes, water bills or general supermarket bills.... We plan to fight this and be the voice of the Israeli people.”

Histadrut spokesman Eyal Melma added that “just over a month ago, we attempted to get this government to raise the minimum wage in order to help society’s weakest segments. Not only did the government reject increasing the minimum wage, but they went ahead and raised all the prices of basic necessities.”

Melma declared that “water should not be considered a luxury item; it should not be that a person has to think twice before taking a shower.... A government should provide its citizens with reasonably priced water and not increase the price by 50 percent in one go.”

He noted that “everyone is affected by this increase, but especially the country’s weaker populations.”

Brosh, meanwhile, pointed out that the increase in fuel and water placed Israel among the world’s most expensive countries.

“There is no economic justification for such an extreme social situation,” he said, arguing that Israel’s excise on diesel made it the third most expensive country, after Turkey and Britain, on of a list of more than 20 nations.

Melma said the union was putting together an action plan for the strike that was aimed at showing ordinary people that there was someone who supports them. The Histadrut spokesman added that the combined action of the ULA and the manufacturers would be very powerful.

The Finance Ministry said it had yet to formulate a response to the threat of a general strike from the three groups.


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