Government Puts Toughest Economic Measures on Hold
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Government Puts Toughest Economic Measures on Hold

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The government today put its toughest economic measures on hold in hope of reaching an agreement with Histadrut and avoiding a second general strike in less than two weeks.

Premier Shimon Peres and Finance Minister Yitzhak Modai spent most of the day in meetings with Histadrut Secretary General Yisrael Kessar and his aides. The upshot was that the government postponed invoking the emergency regulations by which it planned to implement its economic austerity program.

One of the first measures would have been the dismissal this week of about 10,000 government employes and people employed in government-supported local authorities and public institutions, such as the Jewish Agency.


Also delayed was the new wage-price freeze that was to be imposed by decree under emergency powers derived from the British Mandate regime and retained in Israeli law, though never used on the economic front. The intention was to avoid the lengthy process of union negotiations and Knesset debate. That, precisely was what infuriated Histadrut.

Kessar said between meetings today that Histadrut could not negotiate under the threat of decrees it considers undemocratic and a negation of agreements signed between the workers’ representatives and their employers.

Peres said he agreed the negotiations should be held in a free atmosphere. The implementing of economic measures by decree will therefore be postponed to allow talks to proceed, he said.

The government apparently yielded on this point because of the immediate danger of labor strife that could paralyze the country. Local trade union leaders and the rank-and-file workers have emerged as far more militant than the Histadrut leaders and may be beyond the latters’ control.


While Peres and Modai were meeting with Histadrut officials, some of the country’s largest unions were holding meetings of their own to consider new strike actions. They included the unions representing employes of the Israel Electric Corp.; the Ports Authority; the Bezek Telephone Corp; El Al; Israel Aircraft Industries; the merchant marine officers and seamens union; and the electronic and electrical appliances industries unions.

Their tone was strident. Spokesmen said the unions would confer again tonight to decide whether to call a general strike tomorrow. Some unions jumped the gun and announced a 24-hour shutdown beginning tomorrow morning. They may be joined by other unions, including those representing Ben Gurion Airport workers.

The government employes union has already called a three-hour work stoppage for tomorrow. The clerks union is expected to decide later whether to join in that demonstrative action.

Histadrut staged a 24-hour general strike last week which it said was 90 percent effective. The country was virtually shut down July 2/3 and cut off from air and sea communications with the rest of the world. It was hoped in government circles that the decision to postpone the emergency measures would deflate union militancy.

The decision was taken only hours after Modai declared on radio and television that the emergency economic measures constitute a package from which no components can be removed or changed.

Histadrut contends that the program imposes hardships on wage-earners and salaried workers but only minor inconveniences for the wealthy and self-employed. The trade union federation demands a more even distribution of economic sacrifice. It predicts that under the new program, real wages will decline by 30 percent.

The government hopes to work out a compromise. But even as it postponed the most painful measures, the various ministries were preparing lists of employes who will receive dismissal notices, whether by emergency decree or through negotiations with labor.

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