Israel Cabinet Discusses Economic Situation; Kaplan Sounds Warning
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Israel Cabinet Discusses Economic Situation; Kaplan Sounds Warning

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For the second successive week the Israel Cabinet devoted an entire session to the country’s economic problems. Also, as occurred last week, the Cabinet met in a separate session to discuss other matters, including preparations for the negotiations with the Germans and current developments in the Middle East as well as specific Israel-Arab relations.

Speaking before a group of representatives from kibbutzim from all parts of the country, Finance Minister Eliezer Kaplan today warned of the dangers confronting the Israeli economy and the state itself if it cannot reach economic independence, which he defined as the ability to produce all that it needs.

He asserted that in order for the country to achieve economic independence within the next eight to ten years, special efforts must be made to attract capital investments, credits must be controlled, wages must be tied to production and the standard of living must be lowered.

Meanwhile, the price of bread rose eight percent this week-end and white flour went up five percent as a result of the withdrawal of a portion of the government bread and flour subsidy. The new prices will also reflect increased labor costs and profits.

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