Peres Warns Israelis They Will Earn Less, but No Large Scale Unemployment
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Peres Warns Israelis They Will Earn Less, but No Large Scale Unemployment

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Premier Shimon Peres appears to be preparing the country for drastic economic measures that will force lower living standards but, he insists, not mass unemployment.

Everybody will work but everybody will earn less, Peres told Labor Party leaders in Tel Aviv today, explaining that without severe budget cuts the country cannot overcome the present economic crisis. He spoke of Israel’s widening balance of payments gap, increased foreign debt and the deficits registered by its health care and educational systems.

The budget must be cut and wages and living standards will be cut too, Peres said. He spoke in a similar vein later in the day before the Israeli Center for Administration. He responded to critics who accuse his government of lacking the will to cut the state budget. “I have inherited an economy full of debts in which wages are higher than production. We have cut defense, education, health and welfare and there is nowhere else to cut,” the Premier said.

Absorption Minister Yaacov Tsur urged that the Prime Minister be granted emergency economic powers so that he could take unpopular measures in face of pressure from his various coalition partners.

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