Unemployment Insurance Proposal Divides Dominant Israeli Parties

Sharp differences here last night developed within the Mapai-Achdut Avodah alignment over a proposal to establish an unemployment insurance program which would guarantee a minimum means of subsistence to the growing numbers of unemployed resulting from the Government’s austerity program. David Horowitz, governor of the Bank of Israel, who presented the unemployment insurance proposal at a meeting of the alignment’s economic committee, said that, while it was impossible to supply enough work, insurance should be instituted.

Opposition to the plan was expressed at the meeting by a number of leaders on both the Mapai and Achdut Avodah factions, who argued that the funds which would be used in such a program should go instead toward the creation of productive work opportunities. They also charged that unemployment insurance would lower labor standards. Commerce and Industry Minister Haim Zadok claimed that such a scheme would be detrimental to the interests of the State.

The newly appointed Employment Headquarters, meanwhile, held its first session this morning with the participation of Labor Minister Yigal Allon and Mr. Zadok. The Headquarters is charged with drawing up plans for the creation of new jobs particularly in development areas.

In a number of different public gatherings held over the weekend, various alignment ministers sought to explain the Government’s retrenchment policy, claiming that the slowdown has hit only the building trades. Addressing a meeting in Bat Yam near Tel Aviv, Finance Minister Pinhas Sapir said that some 1,500 engineers would soon be employed by the Government in such projects as building roads and bridges, as well as a number of public structures. The engineering profession has been particularly hard hit by the crisis. Mr. Zadok told a meeting in Herzliya that despite retrenchment, a number of industries were actually expanding. He cited the clothing and diamond industries.

TRADE UNIONS SEEK LOWER PRICES; EUROMART LINKS COULD BOOST ECONOMY

Meanwhile, Histadrut officials conferred last night with Treasury officials in the hope of bringing about cancellation of price increases in such basic commodities as milk, eggs and fats. Trade union leaders said such increases will lower still further worker living standards hit by wage freezes.

In Israel’s deepening economic squeeze, officials looked to some agreement with the six-nation European Common Market which would give a boost to Israel’s exports to that market, and help to relieve Israel’s unfavorable balance of international trade, which is hurting Israel’s economy. Israel’s current limited agreement with Euromart ends next July 1, and Israel has applied for both a much more liberal pact and for associate Euromart status.

Foreign Minister Abba Eban told the Cabinet yesterday that both Italy and France accept Israel’s view that its present agreement with the European Common Market is unsatisfactory. The Foreign Minister reported on talks he held last week with Government officials in Paris and Rome. He warned, however, that negotiations on Israel’s request for associate status in Euromart may be long and difficult.