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The Histadrut Labor Federation says it will declare a nationwide labor dispute if the cabinet approves the 2009 state budget and the accompanying Economic Arrangements Bill in its current form.

"Many groups of workers stand to be affected," union chairman Ofer Eini said yesterday. "Finance Minister Roni Bar-On is imitating former finance minister Benjamin Netanyahu."

State workers will go on strike unless the treasury removes certain articles from the Economic Arrangements Bill or reaches an agreement with the union on modifying them within two weeks from the declaration of the labor dispute.

The reception hours of various government ministries, local governments, the National Insurance Institute and the Employment Bureau are all likely to be affected by the strike, if it does take place. Also in the line of fire is passenger train service, cargo loading and unloading at the country's ports and normal operations at Ben-Gurion International Airport.

Eini plans to pay a visit to the Prime Minister's Office on Sunday to lobby against the budget and its sidekick, the Economic Arrangements Bill, in its current incarnation. The union boss is considered to have the kind of weight that can affect the outcome of Kadima's party primary next month, due to the Histadrut's control of the workers' committees - most of which are now counted as being in Kadima's corner.

"The Histadrut will exercise its full weight in order to shoot down the Economic Arrangements Bill, not only by means of strikes and sanctions but also in the political arena," Eini said. "I intend to warn the cabinet ministers of the danger inherent in approving the [budget]. I expect they will not raise their hands in favor of a bill that would lead to the dismissal of thousands of workers and to economic instability at a time when the Israeli economy is at the brink of crisis."

Eini also attacked Bar-On personally, despite their recent rapprochement after locking horns over the taxation of employee study funds (kranot hishtalmut).

"Only one month ago Bar-On retreated from his plan to tax the kranot hishtalmut by passing legislation, and in a unilateral manner, while ignoring collective bargaining agreements. He faced the cameras and said, 'I was wrong.' Now it turns out that he did not truly learn the lesson and is repeating his mistake," Eini said.

"Bar-On adopted the 'mistakes' path as a modus operandi. Instead of dialogue with the Histadrut, he is once again adopting the mistaken assumption that wisdom is the sole province of the treasury. I hope no other mistakes on his part will be forthcoming in the near future."

The union chairman said the Economic Arrangements Bill "is no different in its severity from the proposals submitted during the days of Netanyahu, and it is expected to lead to job losses in the thousands in the public sector."

"I regret Eini's harshly worded announcement and the ease with which he once again uses the threat of a general strike, which would needlessly undermine the stability of the economy," Bar-On said in response. He said the cabinet has the duty and right to determine economic policy while keeping in mind the interests of the entire Israeli economy, including those of the workers.

"I call on the Histadrut chairman to take the economy out of the political game and to behave responsibly while keeping in mind the welfare of the economy," the finance minister added.

The Shas ministers plan on voting against the budget on Sunday. Industry, Trade and Labor Minister Eli Yishai met with Bar-On yesterday but the two did not reach an agreement.

Yishai is demanding a 2.5% increase in the government spending target for 2009 over this year's budget, instead of the 1.7% rise to which the treasury has agreed. In addition, it wants to use unspent budget surpluses of NIS 10 billion and to decrease the rate at which income tax is being reduced for the highest earners in order to increase the reserves available for the budget.