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Shultz Pledges Full U.S. Support for Israel’s Tough Economic Measures

July 9, 1985
See Original Daily Bulletin From This Date

Secretary of State George Shultz pledged the “full support” of the U.S. for the government’s tough economic measures in letters to Premier Shimon Peres and Finance Minister Yitzhak Modai, made public here today. Shultz stressed that “The key to success will, of course, be the full and vigorous implementation of your emergency economic package.”

He noted, too, that Washington’s supplemental economic aid is nearing enactment by Congress and would help Israel toward economic recovery.

Shultz’s letter was received last week after a Cabinet majority approved the Treasury’s emergency economic program that was strongly backed by Peres. It drew fierce opposition from Histadrut which accused the government of forcing wage-earners to bear most of the burden of economic austerity.


Shultz, who is an economist, referred to such opposition when he wrote to Peres: “1 … want to congratulate you on your courageous decision to move boldly to address Israel’s economic problems. I know how difficult such decisions are, and the inevitable dissatisfaction these measures may cause among some elements, especially in the short term.

“On the other hand, our experience suggests that in dealing with the kind of problems you face, firm comprehensive steps are far more likely to succeed and to command broad public support in the long run.

“I believe the new economic measures represent an important step forward in your efforts to stabilize the Israeli economy and lay the basis for long-term growth and prosperity. The key to success will, of course, be the full and vigorous implementation of your emergency economic package. I want you to know that you have our full support as you work to this end.

“As you know, we want to help Israel to achieve its economic objectives through our assistance program. I am confident that our supplemental assistance, which is now close to enactment by Congress, will be available in a timely way to provide support for this most important undertaking.”

Shultz wrote his letter in response to a telephone call to him by Peres, offering congratulations for the release on June 30 of the 39 Americans held hostage by Shiite Moslems in Beirut. It began: “Dear Shimon, thank you for your thoughtful call Monday on the release of the hostages. Both our countries can take satisfaction from the successful resolution of the crisis. Your cooperation and support was very much appreciated and touched me deeply.”

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