PM Orders Treasury, BoI to Settle Their Fight by Monday

Prime Minister Benjamin Netanyahu delivered an ultimatum to Finance Minister Yuval Steinitz and Governor of the Bank of Israel Stanley Fischer yesterday. Netanyahu told both of them he had decided to end the saga of the new Bank of Israel Law by Monday at the latest, and if the two cannot reach a compromise over the issues under contention by then the prime minister will intervene and decide.

Netanyahu held separate meetings with the two yesterday at which he not only informed them of his decision but also said that if he is forced to make the decision it would be final and not subject to appeal.

The major disagreement between the treasury and the central bank now is over who will oversee wages at the bank, though there are still a number of other bones of contention.

The compromise, Netanyahu told Fischer and Steinitz yesterday, must be based on two main principles: The Finance Ministry will supervise wages and benefits at the Bank of Israel, but the treasury's oversight will not compromise the independence of the central bank.

Netanyahu based his decision on recommendations formulated by the director general of his office, Eyal Gabai. For the last three weeks Gabai has attempted to mediate between Fischer and Steinitz, on his boss's orders. As part of his mediation efforts, Gabai met with Finance Ministry Director General Yarom Ariav, treasury wages director Ilan Levin, Bank of Israel Director General Hezi Kalo and the bank's general counsel Tida Shamir.

Steinitz and Fischer met privately yesterday before they met with Netanyahu, in order to discuss the new law - but did not reach an agreement as both sides stood fast on their positions.