Israel: Huge Price Rises
Socialist Press1977 1977-08-03Read it in the scan (PDF), scan page 3 →
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Israel's right wing Likud coalition government last week announced a series of cuts in government subsidies, resulting in a 25% increase in food and fuel prices.
Similar increases are to follow in the cost of transport, postal services and telecommunications.
The cuts amount to a reduction £145 million sterling in Israel's Prime Minister Begin current national budget of £7,500 million, and include a reduction of £87 million in the £2,500 million defence budget.
Significantly, however, the defence cuts are not to affect front line fighting strengths-they fall instead on accomodation and transport.
The reaction of the leaders of The Israel's hopelessly compromised trade union federation-the Histadrut-was predictably gutless.
The Secretary General, Yeruham Meshel, merely threatened to cancel its agreement on pay with the government and called for a purely protest one hour strike against the announcements.
Clearly Histadrut wants no repetition of the events of November 1974 when price rises following a 43% devaluation led to three nights of rioting in Tel Aviv.
But Histadrut's spinelessness is no doubt also motivated by a desire to protect its political wing, the Labour Alignment. For recent revelations-the details of which are as yet unclear-indicate that when Labour was in office, it too planned increases of such magnitude.
Histadrut's bluster is thus a cover both for its own inactivity, and for the anti-working class policies of its political confederates.
The timing of the announcement during Prime Minister Begin's talks with Carter was also meant as a clear signal to Israel's chief backers, the USA, that israel needs more financial help.
With inflation running at 38% and small (2%) devaluations of the Israeli pound occuring. at almost monthly intervals, it is clear that the Israeli economy is in a perilous state.
Without US aid-military and financial-the internal and external contradictions besetting Israel would surely combine to rip the state apart.
The cuts in no way mitigate those pressures. but inste: d intensify them.