Meshel Warns of Israeli Recession

Yeruham Meshel Secretary General of Histadrut, warned yesterday that, Israel was headed for a recession unless the Israeli government takes appropriate measures to avoid it. He was sharply critical of Israel’s new tax reform law which he said placed the burden on those sections of the population least able to bear them.

Meshel, who arrived from Israel Sunday night addressed a press conference at Histadrut headquarters here. He said that in order to avoid a recession and unemployment, the Israeli government would, have to encourage “more investments, more sophisticated industry and increase exports.” He said Israel had to take measures to benefit more from its ties with the European Common Market. According to Meshel, there is already evidence of future unemployment in Israel’s textile industry.

He charged that the tax reform law adopted last summer placed the burden of taxation on the workers; while a considerable portion of the population “does not pay taxes according to their income.” Declaring that “the social balance is not less important than the military balance,” Meshel urged the Israeli government to take “effective steps” so that the tax burden will be shared equally by all segments of Israeli society.

Meshel will meet with Vice-President Nelson Rockefeller and Labor Secretary John T. Dunlop before he leaves for Mexico City later this week to attend an international trade union conference. He met today with AFL-CIO president George Meany. He said Meany invited him because developments in Israel prevented Meshel from addressing the AFL-CIO conference as planned last week.

The Histadrut leader told reporters that he would explain to Rockefeller that the financial aid Israel receives from the U.S. would not be used for increased consumption or to raise living standards in Israel. He said he would also discuss with Rockefeller problems of Israeli exports, industrial development and bilateral relations between Israel and the U.S.