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The decision to merge Israel Military Industries with the Rafael armaments manufacturer is just another piece of evidence that the person who really runs the country - when it comes to truly important matters - isn't the prime minister. It's the chairman of the Histadrut labor federation, Ofer Eini.

The decision on the merger made by Defense Minister Ehud Barak, Finance Minister Yuval Steinitz and Eini is to be announced officially on Thursday.

The treasury tried for years to privatize IMI and use some of the money to pay for the heavy costs of cleaning up the contamination that the government company's plants caused to the land on which its plants sat. Now it looks like the treasury will not see a shekel from the merger and will have to pay for the cleanup anyway.

The treasury will also try to fight a losing battle to cut IMI workers' compensation and severance payments, and to offer Rafael a security blanket to ensure that IMI does not become a burden.

IMI squeaked through the past few years mostly thanks to massive injections of money from the state. It was only the Finance Ministry's decision to turn off the spigot that forced the sides to agree to the merger.

But it is still not clear what solution would be best for the public coffers: A merger with another state-owned defense contractor such as Rafael or Israel Aerospace Industries, or a sale to a private firm. Both depend on a deal with IMI's workers.

For now, the Histadrut and the workers have gotten what they wanted. The merger guarantees little change in conditions, just a move from one state-owned company to another. They might even be better off as part of a profitable, financially stable firm.