JERUSALEM (Oct. 5)
A new foreign currency budget that pegs all commitments abroad to actual foreign currency income is expected to come before the Knesset next month, following Cabinet approval.
The new plan, drawn up by Oscar Gass, adviser to the Israel Finance Ministry, provides for an exact listing of all forms of currency loans and purchases, in order to present a clear picture of the nation’s indebtedness.
Under the new program, individual Ministries will no longer be able to make commitments abroad without prior reference to the Finance Ministry’s schedule in order to insure that commitments will be honored on the date of payment. The plan also stipulates that no further short-term loans will be sought to cover imports.
From an estimated revenue for the July 1952-June 1953 period of $275,000,000 to $280,000,000–mostly in goods, including German reparations–it is hoped to find between $15,000,000 and $20,000,000 for debt retirement. The total of debts falling due in the above period comes to 120,000,000 pounds and the Ministry of Finance hopes to obtain a long-term credit of about $75,000,000 to consolidate most of its short-term debt negotiations, with the assistance of major American banks.
Balancing the budget is a pre-requisite for U.S. Government backing for a new credit and is the first step that must be taken to stabilize Israel’s credit position. From the overall currency budget, it is understood, some $60,000,000 will be allocated to industry, $47,000,000 will be set aside for raw materials and about $12,500,000 for power and industrial investments. At the same time, the allocations will include $48,000,000 for food imports, $38,000,000 for fuel and $23,000,000 for agriculture.