Resistance to a price freeze mounted today as labor and management continued to wrangle over the size of a cost-of-living allowance to compensate workers for rising prices and the strike of 6000 salaried physicians entered its second week.
The selective price freeze decided on by the Cabinet Sunday was criticized by various economists who claimed it would not achieve its purpose which is to curb inflation.
Prof. Micha Michaeli, a senior professor of economics at Hebrew University told the Jewish Telegraphic Agency today that “the plan has no chance whatsoever” and “may only increase inflation.” According to Prof. Michaeli, the Cabinet decided on a freeze “out of panic.” Premier Golda Meir was said to be the main advocate of the plan.
Reportedly none of the economic ministers is enthusiastic about the plan. The key man in economic matters. Finance Minister Pinhas Sapir, is currently in the U.S. and was abroad when the decision was taken. He is said to have approved the measure by phone.
Moshe Zanbar, Governor of the Bank of Israel, said the freeze would succeed only if it were of short duration and the time was used to work out fundamental measures to fight inflation.
The Bank of Israel is expected to recommend shortly a $250 million ceiling on public projects. The Bank is said to believe that the main cause of inflation is the money poured on the market by the government.
C-O-L NEGOTIATIONS
Meanwhile Histadrut and the Manufacturers Association were at odds over the cost-of-living allowance. Mare Moscievitz, president of the Association, said employers were prepared to pay an additional COL allowance but not the full amount warranted by recent price hikes. He claimed that would put management in a position of having to raise prices again or suffer losses.
Histadrut insists that compensation for the last price rises must be paid in full.
Moscievitz was adamant on a price freeze. He said the government must not decree a freeze at a time when the price of imported raw materials is rising, a development over which Israeli manufacturers have no control.
There was no sign of any settlement in the doctors’ strike. Histadrut representatives emerging from a lengthy meeting with management and physician representatives claimed the way was open to progress in the continuing talks. The doctors came out as pessimistic as ever. They said the government made no new proposals.
That was confirmed by Premier Meir who told Tel Aviv University students today that the government would not yield to any further pay demands by the doctors. The latter are asking a 60 percent salary increase while the government is holding the line at 45.6 percent. “If we give them more, it will undermine the whole network of labor agreements in other branches,” Mrs. Meir said.
Health Minister Victor Shemtov who participated in the negotiations today claimed there was little difference between the physicians’ demands and the government’s proposals. He said the continuing strike was “a shame.”
The doctors are refusing to sign medical documents and are not signing releases for patients discharged from hospitals. In another labor dispute, Customs officers have begun a work slowdown in support of demands for higher wages.
Jerusalem merchants turned off their neon signs and window lights last night to protest a new city business tax which they say is too high. They have threatened to close their shops unless the municipality rescinds the measure.
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