Ehrlich Does Not Intend to Resign

Finance Minister Simcha Ehrlich, facing a strong challenge from within his own Liberal Party and mounting discontent over his stewardship of Israel’s deteriorating economic situation, insisted last night that he has no intention of resigning. Ehrlich spoke to reporters at Ben Gurion Airport on his return from an extended trip overseas.

He had nothing more to say on the subject today following a meeting with Premier Menachem Begin and a conference with two of his Liberal Party colleagues. He said he had merely reported to Begin on his visits to several European countries but would meet again with the Premier soon to discuss internal political matters.

Ehrlich’s departure from the Cabinet has been predicted for some time as the inflationary spiral worsened and the government appeared unable to cope with it. His resignation has been demanded by members of his own party notably Energy Minister Yitzhak Modai and former Deputy Finance Minister Yehezkel Flomin, a one ### Ehrlich protege.

But Ehrlich made his position clear when questioned by reporters at the airport. “On July 18, I visited Premier Begin and expressed the wish to resign,” he said. “Begin explained to me that any such move would entail the resignation of the entire Cabinet. This is too heavy a responsibility and since then I decided to refrain from doing that,” (resigning) he said.

RESIGNATION COULD TOPPLE GOVERNMENT

His remarks confirmed the view that Begin has concluded that Ehrlich’s resignation at this time could topple his government, which is sharply divided internally and holds a precarious six-teat majority in the Knesset. Political observers noted that if Ehrlich quit, both the Liberal Party wing of Likud and the National Religious Party would demand a reshuffling of the Cabinet.

Interior Minister Yosef Burg, leader of the NRP announced over the weekend that his party would demand what it considers “proper” representation in the Cabinet. The NRP with 12 seats in the Knesset, has three Cabinet portfolios, the same number as the Democratic Movement which commands only seven Knesset seats. If NRP demands are met, the Democratic Movement, headed by Deputy Premier Yigael Yadin, could be expected to leave the government, further endangering Begin’s slim parliamentary majority.

But observers believe that Ehrlich’s determination to remain in office makes a head-on collision between himself and his rivals in the Liberal Party inevitable. Ehrlich said last night that he felt “that the majority of the party is behind me and I am ready to prove it if necessary.” It is believed that such a test would throw the party into turmoil and pose another danger for the Likud coalition.

Meanwhile, the Finance Minister may soon go abroad again. He is reportedly contemplating a trip to Mexico in 10 days. Mexico, which has replaced Iran as a major supplier of oil to Israel, has just hiked the price of oil by $2 a barrel, to $24.60. The Mexicans, who are not members of the Organization of Petroleum Exporting Countries but who price their oil at around its level, earlier asked its customers to consider a $4 increase.