The Mapai party secretariat and economic committee today decided to back Finance Minister Levi Eshkol’s proposal, calling for a compulsory savings loan to absorb the excess currency expected to become available next July when cost-of-living allowances will be increased as a result of the devaluation of the Israeli pound last February. Mr. Eshkol had warned the committee that failure to approve the plan would result in general economic chaos in Israel.
According to the plan, details of which will be worked out later, wage earners will have to save three or four percent of their salaries, beginning in July. The savings will total an estimated 60,000,000 pounds ($20,000,000).
It was announced in Jerusalem, meanwhile, that the time limit for liquidation of dollar-linked mortgages, at the lower pre-devaluation rate of exchange, will be extended from May 10 to June 7. The extension also applies to those mortgagees wishing to convert their debts to obligations linked with the cost-of-living index rather than the dollar. After June 7, those who have not acted on either option will automatically have their debts increased by 67 percent.
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