TEL AVIV (Aug. 26)
Histadrut representatives and government officials launched discussions today on the trade union’s demands for cancellation of the new, higher prices for basic commodities and modification of other results of the devaluation of the pound. But Finance Minister Pinhas Sapir made it clear that there will be no deviation from the decision to raise the prices of such basic commodities as bread, sugar, milk, eggs, oil and meat. “The Knesset has approved the steps taken,” he explained. Meanwhile, the rush on staple goods has subsided a little, partly because some stores have run out of goods at the old prices and partly because some Israelis have run out of money. Many shops are still selling television sets, furniture and other imported products at the old prices, but almost all of them demand cash and do not grant the usual discounts and credits. On the other hand, the prices of some items have mushroomed–in a cafe now one is liable to be billed 20 percent more for a cup of coffee, and in a restaurant 15 percent more for a meal. One kiosk here was charging double the former price for a glass of seltzer.
Dr. Moshe Mandelbaum, chief of the new price control authority, said today that cafes and kiosks have so far not been included in the orders to freeze prices or increase them only in proportion to the import component. If complaints persist, however, the authority may consider including them and taking action against violators, he said. Tourists are not likely to benefit much from the devaluation, according to a survey of the chief tourist services. The high-class hotels will not change their dollar rates, but the guided-tour companies have said that costs had risen 34 percent even before the devaluation, because of the increased excise taxes on fuel and spare parts, and they have asked for a 20 percent rise in rates. The prices of internal flights have gone up, with only one exception–the airline flying to the Sinai has announced a reduction. Many building contractors, too, have raised apartment rentals, but a price-control order in this category goes into effect Sunday and Housing Minister Zeev Sharef has said the contractors will be ordered to roll back their prices. The two largest contractors have announced that their rentals remain unchanged.
Sapir toured this city yesterday to see personally the effects of the devaluation. He visited various shops, the Supersol department store and the Hamashbir cooperative supermarkets, talked to house-wives and listened to complaints. He did receive some applause, though, from those voicing admiration for what they called his courage in making the devaluation decision. At the Osem food factory, Sapir was met only by the owners; the workers boycotted him because of his alleged “anti-laborers policy.” But at the Tadiran electronics plant, the workers presented him with flowers. The leftist Mapam Party is taking the lead in fighting for reversal of the decision to impose higher prices on basic commodities. Mapam representatives have begun visiting working places and talking with employes. At one such place, workers prevented the speaker from finishing his remarks. The conflict between the government and Mapam on this issue is causing tension within Histadrut, and possibly within the Labor Alignment too.