Olmert tells Fischer to sign Bank of Israel wage deal - Finance Ministry director of wages threatens to quit over agreement

Sources inform "Globes" that Prime Minister Ehud Olmert last night gave permission to Governor of the Bank of Israel Prof. Stanley Fischer to quickly sign a new salary agreement with the bank's employees and bring the prolonged dispute to an end.

Fischer will apparently sign the salary agreement reached between the Bank of Israel's management and workers committee before the Ministry of Finance director of wages intervened and torpedoed it. The ministry wanted to prevent the central bank's management from granting higher pay grades to senior managers and employees ahead of retirement, because of the high cost that will accrue to the state treasury. The ministry also wanted new Bank of Israel employees to receive 30-45 percent lower salaries than those paid to the bank's current employees.

Olmert apparently wants to settle the Bank of Israel salary dispute because of the scandal at the Israel Tax Authority.

Bank of Israel workers committee chairperson Rimona Leibowitz said, "For months, we've had an agreement with management, but the Ministry of Finance has refused to approve it. Maybe now that they're weak, they feel that they don't need another front." She added that only tomorrow would it be known if all the clauses in the new salary agreement conform to the original agreement.

Sources at the Prime Minister's Office denied that the Bank of Israel agreement was because of the scandal at the Tax Authority. "Negotiations have lasted for weeks, and were submitted concurrently with the scandal becoming known." They added, "This is the first time during this dispute that the government and the Bank of Israel's management have shown a united front, which means that the workers committee will have to accept the agreement." The sources declined to comment on the clauses in the agreement before they were shown to the workers committee.

In an extraordinary step, Ministry of Finance director of wages Eli Cohen has threatened to resign. "I will not approve an illegal pay hike under the pending salary agreement between the Bank of Israel's management and workers committee." He told officials at the Prime Minister's Office, "Some things are illegal, and under no circumstances will I approve or sign them. If you do something illegal, I will resign. You are proposing something illegal and immoral that will not pass public muster."

Cohen said he would send the Bank of Israel wage agreement to the Attorney General for review.

Ministry of Finance spokesman Eli Cohen declined to comment on the matter.