Israel's Histadrut Union Signed Electricity Reform, Challenging Political Narratives
The Histadrut labor federation has signed the electricity reform, a move that challenges the common political narrative that the left and unions consistently blocked market liberalization efforts by the Likud party. The comprehensive electricity reform, finalized in May 2018 after 22 years of attempts, was agreed upon by the Histadrut, the Israel Electric Corporation (IEC), and government ministries. This agreement facilitated the opening of the electricity supply sector to competition, with private producers now accounting for approximately 40% of electricity generation by 2023, alongside a significant reduction in IEC workforce.
The article also examines the "Open Skies" aviation reform and port privatization, finding similar patterns where the decisive stages were passed and the opposition was not strictly aligned along a "left versus Likud" axis. The "Open Skies" reform, approved in April 2013 with a large majority, saw opposition from ministers of the right-wing Yisrael Beiteinu party, not solely from the left. Similarly, port privatization led to the establishment of new private ports, despite opposition from some worker committees who attempted to influence the process from within the ruling Likud party.
Prime Minister Benjamin Netanyahu had previously promoted a narrative that positioned organized labor, including the Histadrut, as an obstacle to economic reforms. However, the article argues that the Histadrut's signature on the electricity reform, alongside the composition of opposition to the aviation reform and the nature of resistance to port privatization, contradicts this framing. The long delays in implementing the electricity reform, spanning over two decades and seven governments, are attributed as much to governmental and regulatory failures as to worker resistance.
The electricity reform has reshaped the market, with the IEC retaining its monopoly on transmission and distribution while the supply sector opened to competition. This included a gradual reduction of thousands of jobs at the IEC, implemented through the collective agreement signed in 2018. The "Open Skies" reform, which took effect in April 2014, has led to a significant decrease in airfare prices to Europe, making flights more accessible. The new private ports in Haifa and Ashdod have increased capacity and competition in the maritime sector.
