Government, Histadrut Agree on a Broad Economic Program

The government and Histadrut have agreed on a broad economic program which Finance Minister Yigal Cohen-Orgad hopes will lead to a “social contract” between labor, management and the government. The accord was announced after a meeting of more than three hours between the Finance Minister and Histadrut Secretary General Yeruham Meshel and their aides here today.

The trade union federation appears to have emerged with a substantial victory in the form of a promise by the Treasury that all previous agreements will be honored. This means there will be no change in the present system of pegging cost-of-living increments at 80-85 percent of the quarterly rise in the price index. Former Finance Minister Yoram Aridor had attempted to reduce the c.o.l. allowance but ran into stiff opposition from Histadrut.

Other elements of the package include a pledge that every effort will be made to spread the tax burden equitably so as to reduce its impact on the poorer segments of society. Labor and government also agreed to cooperate to narrow the country’s balance of payments gap by promoting exports and reducing imports. They are pledged to avoid unemployment as far as possible.

Today’s meeting was conducted in a better atmosphere than had been expected. The clash forecast between the trade union movement and economically conservative Likud administration failed to materialize. The participants said the agreements in principle will be translated into detailed policy after Cohen-Orgad meets with representatives of business and manufacturing in the next few days.

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