The Histadrut labor federation on Wednesday threatened to freeze the economy starting next week unless a deal was reached wages for workers in the public sector.

Histadrut Chairman Ofer Eini on Tuesday said the federation was considering declaring the dispute a labor dispute in order to prevent the implementation of decrees issued in the Economic Arrangement's Law for 2007. If a deal was not met regarding the salaries of firefighters and employees in the local and religious council, Eini said, the federation would paralyze the economy starting next two weeks.

The Economic Arrangements law is a medley of loosely budget-related bills that is traditionally passed together with the budget law each year.

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Eini sent a letter to Finance Minister Abraham Hirchson Tuesday claiming that the economic proposal presented within the Economic Arrangements Law "harm the rights of workers" adding that "the Histadrut was left with no choices but to declare immediately a labor dispute and start taking action."

The Histadrut opposes the merging of government companies into private companies, out of concern that the process would lead to thousands of workers being fired and to a deterioration in terms of employment for workers who remain in the companies.