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Economic Recovery Plan Attacked

Senior Treasury officials have attacked the three-stage plan for economic recovery submitted to the Cabinet by the Governor of the Bank of Israel, Moshe Mandelbaum. They maintained that the economic crisis demands a “one blow” solution, not a gradual approach that in the end might not work.

Mandelbaum proposed successive measures, starting with budget cuts, then a package of taxes, wage and price controls, and finally a “new economic order” that would maintain a low level of inflation.

Treasury officials said today that all of those measures should be imposed simultaneously. They warned that Mandelbaum’s plan could misfire resulting in further economic instability and an even higher inflation rate. At the moment, however, neither approach has been undertaken. The Likud-led caretaker government will not even discuss economic plans since it anticipates the formation shortly of a new coalition government.