The Cabinet approved a Treasury proposal for gradual cuts in government subsidies for basic commodities including bread, fish, milk and meat. Finance Minister Simcha Ehrlich said after yesterday’s Cabinet meeting that the goal is for government price supports not to exceed 20 percent of the price of each item. He said that Histadrut has agreed in principle to the cuts but Secretary General Yeruham Meshel is still pressing for a ceiling above 20 percent.
The first cuts will be felt this week in higher prices for cake and all but the cheapest types of bread. Supports for other items will be reduced during the weeks and months ahead. Ehrlich indicated that Israelis can also expect to pay higher prices for fuel soon. According to economic pundits the outlook for hard-pressed consumers is a tough winter ahead.
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