Finance Minister Levi Eshkol’s proposal to pay a portion of the next increase in cost-of-living allowances in Government bonds ran into stiff opposition today from the head of the Trade Union department of the Histadrut, Israel’s Labor Federation.
Yeruham Meshel told the Finance Minister he was flatly opposed to the idea, but added he would bring the matter before his colleagues in the Histadrut. The idea was worked out by the Finance Minister as part of his strategy to dampen inflationary tendencies which, he has contended, would arise from increases in wages greater than increases in productivity, thus imperiling the gains from Israel’s devaluation of the pound last February 9.
The Histadrut official reminded the Finance Minister that categorical promises had been given that all employees would be paid the full allowance in cash in July, when such allowances are payable. The secretariat of the leftist Mapam Party similarly strongly opposed the Eshkol bond proposal. The issue was expected to come to a head at the meeting of the Histadrut’s central committee next Sunday.
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