Israelis strike over cut-back plan

Israelis strike over cut-back plan

Unions hope labour unrest will mount

Israeli public-sector workers are intensifying an indefinite strike in protest at austerity plans, which the government says is vital to rescue the stagnant economy.

Some 100,000 municipal workers joined the strike on Monday, adding to 50,000 ministry employees who walked out on Sunday.

The protest will halt refuse collection, close some schools, disrupt welfare activity, and even prevent enforcement of parking regulations.

Unions have threatened a general strike over a sweeping government programme of cut-backs in public expenditure, including 10% pay cuts for civil servants.

The 11bn shekel (£1.5bn; $2.3bn) austerity programme aims to trim the country's ballooning budget deficit - and eventually stimulate the wider economy.

Record recession

The strikes come at a time of mounting alarm about Israel's economy.

Israel is overspending, Mr Netanyahu argues

The costs of the Palestinian uprising have added to weak global markets to produce a two-year recession, the worst since the foundation of Israel in 1948.

Tax revenues have plunged, while state military spending has pushed the government budget into a deficit worth 6% of gross domestic product - way above traditional danger levels.

Israel has benefited from increasing flows of aid, and the US Government has agreed an extra $10bn in emergency funding for Tel Aviv as a result of the war in Iraq.

But the country's new Finance Minister, Benyamin Netanyahu, argues that the situation is too severe to rely on aid alone.

Even with the austerity plan, the country's budget deficit will still be 4% of GDP this year, the Bank of Israel has argued.

Digging in

Mr Netanyahu's proposed cut-backs still need to be approved by parliament, where they face resistance from the Labor opposition.

Unions have opposed the programme bitterly since its inception, and hope to step up their strikes over the next few days.

The government and employers' organisations, meanwhile, have argued that strike action is inappropriate in the current heightened security situation.

They have also threatened to scrap their current agreements with Histadrut, the labour federation, and hinted at unspecified "counter-measures".