The Israel government has approved a recovery plan for the nation’s kibbutzim, agreeing to wipe out a debt of some $2 billion.
Under the plan, the government will take kibbutz-owned land in the center of the country that is equivalent in value to the amount of the debt. The government, which will retain the land, will pay some $800 million of the debt to the banks.
Under another provision of the plan, the government and banks will forgive about $1.2 billion owed by the kibbutzim.
Finance Minister Avraham Shohat said even though the framework of the plan had been worked out, a contractual agreement still had to be signed.
Saying that he hoped the plan would solve the problems of most kibbutzim Shohat added that if within two or three years the problems were not solved, some kibbutzim would have to be dismantled.
Critics assailed the bailout plan as an attempt to but votes for the Labor Party in next year’s national elections.
Likud Knesset member Michael Eitan said the government had rushed ahead with the agreement before thoroughly checking the kibbutz movement’s assets.
“The kibbutzim have assets which are worth more than their debts,” he said, adding that he suspects there are kibbutz-owned companies located abroad which are guilty of breaking Israel’s tax laws.
The Kibbutz Artzi movement, which represents 85 of the country’s 270 collective settlements, denied the claims.
“We don’t have any money, not here and not abroad,” said the movement’s secretary general, Amiram Afrati.