Israel: first salary agreement for almost eight years in the civil service

View of Tel Aviv, April 2, 2014View of Tel Aviv, April 2, 2014 AFP

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But the agreement would be a sham in view of the economic situation.

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With our correspondent in Jerusalem,

Increase of 11% over several years, shortened working week and, icing on the cake, a bonus of 6,000 shekels, around 1,500 euros, which will be paid in early April, just before Passover.

Arnon Bar-David, the leader of the Histadrut, the all-powerful Israeli trade union centre, and Finance Minister Betsalel Smotrich were all smiles for the signing ceremony.

But don't be fooled by appearances.

The majority of the achievements of this agreement risk being erased by the highest inflation that the country has known since 2008. 5.4% expected for 2023. And the shekel, the local currency, was in February the third most depreciated currency in the world.

It weakened by 6% after having been for years one of the safest stocks in the global economy.

Many economists are convinced that this is the result of the reform of the judicial system.

The rating agency Fitch Ratings, one of the largest, warned Israel about a negative impact of this reform while maintaining at this stage the country's credit rating at a high level.

In a country that prides itself on being a “start-up nation”, it is the private sector that is mainly bearing the brunt of this deteriorating economic situation.

And more particularly the world of new technologies with unprecedented capital flight.

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