Budget Compromise Deal Falls Apart

A compromise deal between Labor and Likud which set the stage for a vote on the 33 billion Shekel ($23.8 billion) national budget Wednesday afternoon, broke down at the last minute in a turmoil of bitter recriminations between the two coalition partners. The budget debate was deferred until next week.

The compromise was put together at a late night meeting Tuesday by Labor MK Rafi Edri and Likud Finance Minister Moshe Nissim. The latter agreed that Likud would support the Treasury’s loan rescheduling plan to help the debt-ridden United Kibbutz Movement which is affiliated with the Labor Party.

Labor agreed for its part not to filibuster in the Knesset plenum or in the Finance Committee against proposals by Nissim to allocate funds to Jewish settlements in the West Bank and to development towns, which were to be introduced immediately.

AN INFURIATING INTERPRETATION

Labor Party Ministers and Knesset members caucused Wednesday and announced their endorsement of the deal. But they added an interpretation which infuriated Likud. The Laborites said they were obliged not to seriously delay consideration of funding for the settlements and development towns. However, as MK Haim Ramon, the Labor Party leader in the Finance Committee, explained, that did not mean that Labor was obligated to support funding for the settlements when it came up for a vote. Likud held its own caucus at noon and decided to reject the deal forthwith.

While political observers predicted that the budget dispute would yet be settled by compromise behind-the-scenes, they warned that the dual crisis over economics and foreign policy between the coalition partners could lead to dissolution of the unity government.

They were referring to the open conflict between Premier Yitzhak Shamir and Vice Premier and Foreign Minister Shimon Peres, the leaders of Likud and Labor respectively, over how to revive the peace process. Shamir and other Likud spokesmen have publicly accused Peres of misrepresenting the government on the issue of an international peace conference.

An Army Radio commentator observed Wednesday that “There have been many crises before, but this time the circle around Peres is indicating that they have had enough . . . they are tired of it.”