Israel is asking the U.S. for $3,3 billion to cover the costs of withdrawal from Sinai and redeploying the army in the Negev, Finance Minister Simcha Ehrlich told the Knesset Finance Committee today. Ehrlich, who just returned from Washington, said a third of the sum was asked as a 20-year low-interest loan and the balance as a grant.
Israel’s financial requests from the U.S. were the subject of public criticism two weeks ago when Premier Menachem Begin said during his tour of North America that Israel would ask for the full amount in the form of a loan. Ehrlich’s remarks clarified the financial aspects.
Ehrlich was originally invited by the committee to discuss the current inflation rate which reached a record of 5.5 percent in October. But he refused to discuss that subject. He denied rumors that the government would take tough new economic measures in order to reduce the money supply. He said there were no plans to raise taxes arguing that more taxes would only boost Inflation. The government will continue its current policy of gradual cuts in its subsidies for basic products and services, Ehrlich said.
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