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Complaints, Anger Greet Measures

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Bewilderment, uncertainty, complaints and anger were some of the reactions this morning as Israelis woke up to learn about the Cabinet decision. There was very little surprise, however, at the ninth devaluation in Israel’s history and the second in barely three weeks. The “creeping devaluation” instituted last spring, which authorized a special ministerial committee to devalue the Pound by up to two percent at 30 day intervals apparently was not achieving the government’s objective to curb imports and put a damper on private spending.

Economic experts have been saying for weeks that more drastic measures were needed. The last devaluation–1,9 percent–was announced Sept. 9. As the end of the month approached it was almost certain that the Pound would be further depreciated in value. Since the major currency devaluation of November, 1974, the Israel Pound has depreciated by about 43%.

Israeli workers, merchants, industrialists and farmers are sharply critical of the new measures. Local labor councils were urging Histadrut leaders to take a tough stand toward the government on cost-of-living allowances. The Finance Ministry said today that the government would not permit a general price hike but would consider individual requests for increases on their merits.

Farmers were especially embittered by the sudden rise in water and electricity costs. They said today it was impossible to market their produce at the old prices. The cost of flats is expected to rise, leaving young couples, mostly army veterans and their wives, without a hope of purchasing a decent that which is expected to run into hundreds of thousands of Pounds.

Tourist industry circles doubted that the latest devaluation would improve their sagging business. They noted that the major devaluation last November brought no big increase in tourism to Israel because of the general recession in the U.S. and Europe and higher air fares. The slight rise in tourism that Israel experienced in the third quarter of the year was due mainly to the unusually large number of cruise ships that docked at Haifa, but their passengers spent no more than a day or two in the country.

HISTADRUT LEADERS WERE NOT CONSULTED

It was learned today that Histadrut leaders were not consulted before the latest measures were announced. But their warnings that strikes would erupt if the government ended its subsidies of basic commodities apparently decided the Cabinet to maintain the present price supports against the wishes of the Treasury.

Histadrut leaders said today, however, that Labor would have to reconsider its promise not to demand revised contracts until the end of the year.

LIKUD DEMANDS GOVERNMENT’S RESIGNATION

Meanwhile, Likud demanded today that the government resign over its economic measures. MKs Zalman Shoval and Shmuel Tamir said at a press conference that the measures imposed by the government indicate that it has no sound plan to improve the country’s economy. They said that while there is a real need to divert workers from service to export producing industries, the government has not even carried out its promise to dismiss 2000 government employes, Likud’s demand for the Rabin Cabinet’s resignation will be presented to the Knesset at special session tomorrow.

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