38 -
Friday, July 19, 1985
THE DETROIT JEWISH NEWS
Deli Unique'
CAPITOL REPORT
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oo'
Administration Backs Israel's
Economic Recovery Effort
Washington — Secretary 'of
State Shultz, at a White House
briefing on President Reagan's
announced summit with Soviet
leader Gorbachev in November,
went out of his way to issue a
strong statement in support of Is-
rael's latest economic recovery
measures.
"Now, I have one additional
statement that I'd like to make
before we close," Shultz volun-
teered at the briefing. "I want to
take this opportunity to congratu-
late Prime Minister Peres and his
government for the courage and
foresight they've shown in mov-
ing boldly to address Israel's seri-
ous economic problems."
"The new economic measures
that have already been an-
nounced are far-reaching and in-
clude new cuts in government
budget expenditures, additional
sizeable reductions in consumer
subsidies, realignment of the
shekel exchange rate, a reduction
in public sector employment and a
three-month wage-price freeze.
The new economic measures, if
fully and vigorously im-
plemented, represent an impor-
tant step forward in Israel's con-
tinuing efforts to stabilize its
economy and restore growth and
prosperity."
Shultz, who has been very much
involved in focusing on the Israeli
economy, continued: "The United
States understands from its own
experience the difficulty of taking
such decisions as sizeable cuts in
the budget. We also recognize that
there are no substitutes for the
forthright action in these circum-
stances. That is why we stand
ready to support Israel in this im-
portant undertaking with sup-
plemental economic assistance,
which we expect soon will be ap-
proved by Congress and will be
available to be used in the way
that will be most helpful to Is-
rael."
The Administration, mean-
while, may be prepared to support
an accelerated disbursement of
$750 million in proposed emer-
gency economic assistance for Is-
rael if the Israeli government
moves quickly to actually imple-
ment its just proposed economic
recovery measures, authoritative
U.S. officials said.
Until now, Shultz and other
Administration officials have op-
posed efforts in Congress to legis-
latively mandate that the extra
$750 million be handed over to Is-
rael within 30 days following final
passage of the pending bill. Nor-
mally, such funds are supposed to
be delivered in quarterly pay-
ments over the course of a full
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year.
Israeli official, however, are
very anxious that the money be
made available quickly as part of
their continuing campaign to
shore up Israel's dwindling
foreign exchange reserves.
The $750 million dollars is the
first half of the two-year $1.5 bil-
lion emergency supplemental aid
package which the Administra-
tion has submitted to Congress.
Shultz, during a meeting with
the visiting Director-General of
the Foreign Ministry, David
Kimche, warmly praised the most
recent austerity plans approved
by the Cabinet. Like other U.S.
officials, Shultz said Israel was fi-
nally moving in the right direc-
tion.
"He was very impressed,"
Kimche told reporters at the Is-
raeli Embassy. "The Secretary
said the United States would do
Under Secretary for
Economic Affairs
Allen Wallis said he
was "very, very
encouraged" by what
the Israeli
government has
done.
whatever it could to help Israel
get over this immediate crisis:"
Kimche refused to speculate
about the accelerated transfer of
the emergency aid to Israel.
The senior State Department
official most actively involved in
studying the Israeli economy on a
daily basis, Under Secretary for
Economic Affairs Allen Wallis,
said he was "very, very
encouraged" by what the Israeli
government has done.
"I reported to the Secretary of
State that this has a good chance
of working," he said in a telephone
interview with this reporter.
"This was the first time that I
have been able to say this."
Wallis, who led a delegation of
U.S. economists to Israel in early
June to discuss the economic
crisis, said the proposals an-
nounced in Jerusalem were con-
sistent with the thrust of the ten
points recommended to Israel by
two outside economic consultants
brought into the State Depart-
ment to focus exclusively on the
Israeli economic recovery pro-
gram — Professors Herbert Stein
and Stanley Fischer.
"I haven't checked them off
against those points Stein and
Fischer gave," Wallis said. "But
the part that I heard all fits in
with them."
After saying that he has re-
ceived only a general summary of
the program from the U.S. Em-
bassy in Tel Aviv, Wallis said: "I
am very much encouraged, for the
first time since I have been follow-
ing the Israeli economy." He
called it "a very courageous ac-
tion."
Wallis said Israel was acting
just ahead of some economic
"cataclysm or deluge" that was
"inevitable" unless Israel under-
took these steps. He described the