In an advertisement labeled the "first in a series," published by the Histadrut in Ha'aretz's Hebrew edition Friday, the federation of labor declared: "We are fighting for the image of the Israeli society! The precedent of dismissals at Bank Hapoalim is a threat to all salaried workers in the State of Israel." The last ad in the series will probably not be published after January 28, since the Histadrut's entire preoccupation with the dismissals at the bank - a preoccupation that the employees themselves have forgone - raises the suspicion that it is intended solely to assist Amir Peretz, the Histadrut chairman, to be re-elected to the Knesset. Nevertheless, it is useful to refute the logic that underlies the Histadrut's contentions in support of which it obtained the signatures of distinguished personalities.

"If the move by Bank Hapoalim does not generate broad public opposition, it will become a watershed in labor relations in Israel and expose wage earners to a future of social and employment insecurity," the Histadrut says. The truth is exactly the opposite. If the move by Bank Hapoalim succeeds, it may well become the watershed in an economy that for two years has been eroding and shrinking, causing many workers to suffer from mounting social and employment insecurity.

Given its size and central place in the economy, Israel's banking sector is capable of providing a type of economic leadership that will be able, to a certain extent, to correct the damage that the government's disappointing economic leadership is causing, or at least to serve as an example of what also should be done in the government sector. Economic stability depends on many factors, but one of them is undoubtedly the resilience of the banking system. That resilience is achieved when the banks are efficient, profitable and constantly growing.

If the public feels that the country's banks are healthy and stable, a smaller gap than that which now exists between the interest rate in Israel and the interest rates in Europe and in the United States will probably be enough to dissuade Israelis from transferring deposits to banks abroad and to persuade foreigners to invest here. The pressure on the country's foreign currency reserves will be reduced, and Israel's credit rating will not be in danger of being downgraded.

An efficient, profitable bank can raise money, and therefore, also loan money, at a lower price. A lower interest rate in Israel will have a concrete, positive effect on the job security of many wage earners. It can prevent dismissals, business closures and sudden collapses. A bank's ability to provide credit is limited by, among other factors, its capital adequacy ratio - the relationship between a bank's solid capital and extended credit. An efficient, profitable bank can increase its capital base from current profits and by raising funds in the markets. Increasing the capital base will make it possible to provide more, and cheaper, credit to businesses that have growth potential, and consequently to create jobs.

An efficient, profitable bank can also pay dividends to its shareholders - as Bank Hapoalim had planned but was prevented from doing due to the economic instability and its profitability shortfall. Bank Hapoalim's payment of dividends was not intended to create a situation in which "Shari Arison [the bank's controlling shareholder] will laugh and 900 fired employees will cry," to quote another demagogic ad of the Histadrut. The idea, rather, was that the bank's return on capital would also affect the quality of credit that Bank Leumi had made available to the purchasers of Bank Hapoalim shares, and would justify the price paid to the public for the bank through the government. This has a direct bearing on Bank Leumi's ability to make credit available to businesses and to help ensure a state of high employment. Bank Hapoalim's payment of dividends would also justify the foreign investments in the bank, which, until its sale, was under state ownership, and encourage foreign investors to participate in, rather than flee from, investments in Israel. All these factors contribute directly to growth and boost employment.

The frightening downgrading of the Israel Electric Corporation's credit rating prompted its senior officials to offer two possible solutions: the injection of government funds and the raising of the price of electricity. Adopting these solutions, however, will expose the country's wage earners to a future of social and employment insecurity. The injection of government capital will necessitate a budget cut in other clauses, while a hike in the price of electricity will raise manufacturing costs, and thereby, reduce production and employment. It is possible that if the Electric Corp. had acted as Bank Hapoalim did - streamlining its production costs at the right time before its credit rating was downgraded - that risk would have been averted. In that case, however, the corporation would have had to cut personnel costs, and as usual, Peretz would have objected, supported the corporation's employees, and exposed other workers in the economy to the danger of losing their jobs.

Dismissals are a painful step, and those affected find themselves in a situation that is far from easy. In the agreement between Bank Hapoalim's management and the workers' committee, the sides made sure to compensate adequately those who were dismissed and relieve their plight. However, from the point of view of the national economy, there is no doubt that Arison and the bank's other top officials, Shlomo Nehama, the chairman, and Eli Yones, the CEO, carried out an important move that will streamline the bank and ensure its profitability and stability. Contrary to the claim of the Histadrut, this is also a step that strengthens the social and employment security of Israel's workers.