Hurwitz Under Severe Criticism by Likud Knesset Faction for His Economic Policies

Finance Minister Yigal Hurwitz, whose economic policies are being blamed for Israel’s resurgent inflation, ran into a storm of criticism in the Likud Knesset faction yesterday amid speculation that he is about to resign–which he denies — and demands from some MKs that he do so. Three no-confidence motions on the governments economic policies were scheduled to be introduced in the Knesset today.

The most vociferous critic was former Defense Minister Ezer Weizman who quit the Cabinet earlier this year because, among other reasons, Hurwitz threatened to slash the defense budget. Yesterday, however, Weizman accused the embattled Treasury chief of not cutting it enough.

“I went (resigned) because of your demands to slash the defense budget,” Weizman said. “But since then, what did you cut? A million here, a million there. Its only pocket money. It’s not good enough and it’s not good enough to keep telling the people what a catastrophe we’re in. If I were in your place, Yigal, I would go to the Prime Minister as quickly as I could and resign.”

UNDER FIRE IN THE CABINET

Hurwitz came under fire in the Knesset and in the Cabinet Sunday because the cost-of-living figures for October, released last Friday, showed an 11 percent rise, the second highest in Israel’s history, and indicated that inflation is running at an annual rate of 138 percent, believed to be the highest in the world.

At the weekly Cabinet meeting Sunday, Hurwitz clashed bitterly with Health Minister Eliezer Shostak who charged that his economic program was responsible for the “total deterioration” of the economy and that because of it citizens were “going hungry.” Shostak said he was almost ready to join a demonstration by some 10,000 people against inflation that was going on outside the Prime Minister’s Office while the Cabinet was in session. The demonstration was organized by Histadrut.

Hurwitz was the only minister to vote against a proposal to provide generous compensation to the settlers of Yamit and the Raffiah district of northern Sinai who must evacuate their homes and farms next year in compliance with the Israeli-Egyptian peace treaty.

The Finance Minister thought that payments ranging from 180,000 Shekels to 240,000 Shekels ($40,000) were excessive. Acting Prime Minister Yigael Yodin, who sided with the rest of the Cabinet on the issue, observed that “there is no price too high to pay for peace and this is part of the peace agreement.”

Hurwitz retorted that “We cannot spend more than we have. We must live by our means, not according to our appetites.” The Finance Minister contends that his economic policies would be successful in stemming inflation if he had the full backing of the government and his follow ministers agreed to cut their respective budgets.

SPECIFIC CRITICISMS AIRED

Yesterday he was told by MK Yigael Cohen of Likud’s Laom faction, “You say you have no racking. How can you have any when you keep threatening to resign?” Haim Kaufmann of Herut accused Hurwitz of controlling the economy within his small Rafi faction while shutting out the rest of Likud. “You don’t listen to us at all,” he said.

Menachem Savidor of Likud’s Liberal Party told more far-sighted planning was needed. He told Hurwitz that the government must stop imposing price increases on basic products “day in and day out.” Last Thursday, fuel prices were liked by an average of 25 percent, the second price rise within a month. Israelis will now pay almost $4 for the equivalent of an American gallon of gasoline and about $2 a gallon for beating oil. Further rises are expected in the price of cooking gas and heavy oil for industry.

Hurwitz said he would not restore government subsidies for basic commodities because that would be inflationary. At the Cabinet meeting Sunday, Energy Minister Yitzhak Modai ridiculed the theory that rising oil prices caused galloping inflation. “This is a fairy tale. Japan, for example, also imports her oil and there is hardly any inflation in Japan, ” he said.

Much of the anger against Hurwitz stems from his proposal that the Treasury from now on prepare the national budget without consulting the various ministries in advance and that the budget be based on what the Treasury believes to be the State’s resources. Welfare Minister Yisrael Katz termed this “economic dictatorship.” The Cabinet decided to devote a special session to the economic situation soon after Premier Menachem Begin returns from his current trip to the U.S. (Begin today cut short his 10-day trip by one day and flew back to Israel. See story P.3)