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January 04, 1985 - Image 10

Resource type:
Text
Publication:
The Detroit Jewish News, 1985-01-04

Disclaimer: Computer generated plain text may have errors. Read more about this.

10 Friday, January 4, 1985

THE DETROIT JEWISH NEWS

NEWS

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The

Economic conference

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ministers for failure to imple-
ment urgently-needed budget
cuts.
Senior Treasury officials
attending the meeting told the
Cabinet that of the $1.375 bil-
lion the government has al-
ready agreed to slash from the
national budget only $150 mil-
lion has actually been cut.
But budget cuts are strongly
opposed by some. Moshe Kat-
zav, the Minister of Labor and
Welfare, attacked the idea of
further retrenchment. "One
cannot see in the cuts the solu-
tion to all problems," he said,
adding, "We have reached the
end of our tether."
Modai's Likud colleague,
Deputy Premier and Housing
Minister David Levy,
criticized Modai for not pre-
senting a comprehensive eco-
nomic plan. It was inferred
from Premier Shimon Peres'
remarks at the session that
the government indeed had no
solid economic plan when it
approached the United States
for $4.85 billion in economic
assistance for fiscal year 1986,
nearly double the sum Israel is
receiving in fiscal 1985.
Peres said negotiations with
the United States would be re-
sumed only after the govern-
ment has a comprehensive
economic program to present.
Secretary of State George
Shultz made this clear in his
letter to Peres two weeks ago.
He said he could not support,
nor would the Reagan Ad-
ministration consider, Israel's
request unless the Israeli gov-
ernment showed that it had
and was ready to implement a
severe economic austerity
program.
Last week, Peres defended
Shultz' letter and called him
one of Israel's best friends in
Washington.
The letter had drawn a
sharp response from Gad
Yaacobi, Minister of Econom-
ics and Planning, who said the
Israel government knows
what has to be done and does
not need "lecturing." Peres,
however, defended Shultz. His
advice, he said, was "truly that
of a friend, without pressure or
insults."
The Premier added that it
was natural and proper for
Washington to carefully
crutinize Israel's economic
plans when it was being asked
for increased aid. He said
Shultz' letter was not critical
but in fact praised the "gen-
eral direction" of the Israel
government's economic
policies. He simply urged
greater urgency and determi-
nation to implement those
policies, Peres said.

The Finance Ministry was
reported to be working on a
one-year wage-price stabiliza-
tion plan to take effect when
the three-month wage-price
freeze ends this month. Some
elements of the plan, leaked to
the media, indicated that the
Ministry seeks to hold down
real wages. While workers
will receive their regular
monthly cost-of-living incre-
ments, there will be no wage
hikes during the year the plan
is in effect.
Peres was probably alluding
to this when he said real wages
would be held to their 1982
levels during a one-year re-
covery plan.
According to unofficial re-
ports, the Finance Ministry
will not impose another blan-
ket freeze on the price of staple
goods but would try to control
and moderate price increases.
Government price subsidies
would continue, but at a rela-
tively low level. The prices of
imports are expected to soar
after the current freeze ex-
pires. Thereafter, they would
be allowed to rise in tandem
with the price of the dollar in
Israeli currency.
Meanwhile, the price freeze
is presenting the Treasury
with severe cash problems.
New money has to be printed
to cover the government's ex-
penses to keep the prices of
subsidized products stable.
Some sources estimate the
amount at $200 million, but
the Treasury first must find
ways to absorb money from the
public.
It has pending about a dozen
fiscal bills that could realize
up to $600 million. But these
have been stalled by opposi-
tion from the various minis-
ters concerned.

Green Party trip

Continued from Page 1

delegation was due to leave
West Germany.
Most West German news-
papers failed to report that the
Greens had prepared an anti-
Israel strategy paper before
the delegation began its trip.
Nor did most publications re-
port that the Israel ambas-
sador to West Germany had
labeled the paper anti-
Semitic.
Most of the press also ig-
nored the fact that the Greens
had • failed to contact the Is-
raeli embassy in Bonn or the
Foreign Ministry in
Jerusalem before they were
forced to do so when the
strategy paper was published

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