Finance Minister Ronnie Bar-On issued a statement on Monday night explaining his failure to reach an agreement with Histadrut Labor Federation head Ofer Eini.  According to Bar-On, the Histadrut’s demand of a 10.4% wage increase for public workers would force a drastic cut back in the budget for defense, education, and aid for the poor.

Bar-On warned that even with cutbacks, the government would be unable to balance the national budget after paying the increased wages.  The increase would therefore threaten economic stability, he said.

Workers have pointed out that top public servants such as ministers and Members of Knesset have received similar wage increases.  The Histadrut has announced that it will hold a general strike in the near future to protest the breakdown in negotiations.