Israelis Seek to Soften Shock of Price Hikes After Devaluation
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Israelis Seek to Soften Shock of Price Hikes After Devaluation

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Israelis sought shelter today from soaring prices resulting from yesterday’s devaluation of the Pound and other severe economic measures announced by the government. Long lines formed at banks as depositors withdrew cash to buy food and other goods before the anticipated shortages develop and before prices soar out of reach.

There was also a rush on stores selling electrical appliances. Electric and gas heaters are in heavy demand as substitutes for heating oil which has say-rocketed in price. But householders apparently forgot, for the moment, that their electric bills will also rise by 70 percent and the price of beating gas by 66 percent.

The pressure on supermarkets and groceries eased somewhat as shoppers found most food commodities in adequate supply. But people everywhere seemed to be stunned by the 43 percent devaluation of the Pound. It now takes six Israeli Pounds to equal one dollar compared to the pred evaluation rate of IL 4.20. The only persons benefiting apparently are recipients of reparations payments from West Germany and people who have foreign currency from other sources. They were queuing up at the foreign currency windows at various banks today to get more Pounds for their marks and dollars than they would have received last Friday.


By and large, Israelis are expected to adjust to the new economic realities as they have done in the past when austerity measures were called for. Police do not expect a repetition of last night’s rioting and looting in Tel Aviv’s Hatikva quarter where crowds smashed store windows and damaged cars and buses. Thirty-one persons were arrested, among them former MK Shalom Cohen, a leader of the Black Panthers. The authorities said today that while some interested parties tried to label the riots a protest against higher prices, the outbreak was in fact sparked by the cancellation of a soccer match on Saturday.

Port workers in Ashdod held a one-hour work stoppage today to protest the price hikes. Port authority representatives admonished them to get back on the job pointing out that they were no worse off than the rest of the public. A demonstration by several hundred workers outside Histadrut headquarters here yesterday demanding full payment of COL allowances ended without incident. But wage earners generally are disconsolate over the government’s apparent intention to hold the line on COL payments.

Mapam announced today that it was demanding full compensation immediately for the higher prices and insisted on the fullest coordination between the government and Histadrut on economic measures. Mapam leaders charged that the present program hits mainly at wage earners and the working class while sparing the rich.

The Histadrut Executive decided today to demand full payment of the 30 percent COL allowance in Jan. but instructed its trade union department to seek interim payments to help workers overcome the immediate impact of higher prices. Histadrut is expected to demand payment of IL 500 while the government is prepared to give IL 300. The Histadrut Central Committee called a meeting for later today with the participation of Finance Minister Yehoshua Rabinowitz.

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