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Differences Widen in Israel over Proposed Austerity Program

Differences within Premier Levi Eshkol’s Mapai Party over Finance Minister Pinhas Sapir’s tough three-year austerity program for Israel’s inflation-beset economy widened today. At the same time new arguments on the plan arose between Mapai and its coalition alignment partner, Achdut Avodah.

Premier Eshkol was reported to be opposing payment of a cost-of-living allowance normally scheduled to wage earners next January. However, Mr. Sapir indicated he would approve payment of a three percent allowance only on condition that only half of the cost-of-living increments be paid later until the end of 1969.

Premier Eshkol reportedly was supported in his stand by Industry and Trade Minister Haim Zadok and by Labor Minister Yigal Allon, of Achdut Avodah. Finance Minister Sapir was understood to have the backing of a number of leaders of the Mapai faction in the Histadrut, Israel’s labor federation.

The Mapai-Achdut division was widened by approval last night by the Achdut Avodah secretary of a proposal calling for a 100, 000, 000 pound ($33, 330, 000) compulsory loan. Mr. Sapir said this morning he strongly opposed that proposal.

The economic secretariat of the Alignment met tonight in Tel Aviv in an effort to try to work out a compromise solution in the deadlock, an essential condition for effective negotiations with Mapam and other coalition partners for some kind of economic plan.

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