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January 06, 1989 - Image 19

Resource type:
Text
Publication:
The Detroit Jewish News, 1989-01-06

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

I NEWS I

Devaluation

Continued from Page 1

Shimon Peres: Taking the heat.

handle the Palestine uprising.
And Education Minister
Yitzhak Navon said he would
vote against Peres' economic
program because it would
mean severe cutbacks for the
school system, saying "the in-
tention-is to abolish free high
schooling — hOwever they try
to dress it up.
The devaluation was the
idea of Michael Bruno, gover-
nor of the Bank of Israel
which has long advocated a
devaluation, and was ap-
proved by Peres with little con-
sultation and over the fierce
opposition of the director
general of the Finance
Ministry, Victor Medina.
Peres himself refused to
comment on the move. He said
testily that he could not be ex-
pected to explain everything
he does. He said he inherited
a situation "not of his own
making" and had to confront
it with patience.
Bruno, reacting to reports
that the public had purchased
a record $150 million Tuesday
morning, decided "on the spur
of the moment" to try to end
the panic buying.
The devaluation was criti-
cized' by the Histadrut labor
federation, which said it
would cause a surge in the
consumer price index, and by
Finance Ministry • sources,
who predicted a tax revenue
shortfall of 400 million
shekels.
The Histadrut has not
assented to his reduction of
the cost-of-living increments
payable to Israeli wage-
earners to compensate for the
13.5 percent devaluation of
the shekel since Peres took of-
fice. The devaluation, which
ammounts to a reduction of
real wages, conincided with a
sudden rise in prices as Peres
slashed government subsidies
for a wide range of products
and services.
Peres' goal is to reduce the
national budget by 1 billion
shekels. He and his aides are
meeting with other govern-
ment officials and key Knesset
members in the hope of
reaching a compromise.

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THE DETROIT JEWISH NEWS

19

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