Senior Israeli government and labor union officials met today in an attempt to reach a compromise on the implementation of an emergency economic plan that was decreed by the government Monday.
The meetings followed a one-day general strike called yesterday by the Histadrut, Israel's national trade union federation, and sporadic unrest in some of the poorer neighborhoods of Jerusalem to protest the plan.
The Histadrut reportedly seeks cost of living salary compensation for the steep price rises and government subsidy cuts imposed this week and is fighting several other parts of the austerity program, including a wage freeze and the dismissal of about 10,000 government workers.
Yisrael Kessar, the Histadrut secretary general, has charged that the emergency measures will mean a one-third reduction in the real income of workers over the next three months.
There was no reported progress at the meetings between the government and union officials.
The implications of the emergency economic plan appear only now to be sinking in fully to the Israeli public. There were a number of other meetings today, including a group of young couples who said they would no longer be able to repay the government-subsidized mortgages on their homes, and the heads of "development towns" populated by new immigrants, who said the plan would severely hurt them.
Soldiers in a radio interview at a bus stop complained that they would now have to think twice about going home on weekends due to a doubling of bus fares after a sharp cut in government public transit subsidies.
But in a television interview earlier this week, Prime Minister Shimon Peres said the state of Israel's economy was far more desperate than is generally recognized and he said of the emergency measures, "The period of self-delusion has ended.
"What would have happened if we hadn't done it?" Peres asked. "In my view, we would have remained without dollars, inflation would have skyrocketed, the first victims would have been the workers. I didn't do it with an easy heart. . . . The first reason was to prevent an actual collapse."
Peres said Israel had virtually no time left to act to correct its economic decline before its foreign currency reserves all but disappeared.
"What does collapse mean?" he said. "Our foreign currency was about to run out, so we would have had to move to a regime of rationing. We wouldn't have money for spare parts, for food -- because under such inflation the dollars flee, foreign currency flees."
In addition to the labor and social unrest the austerity plan threatens to produce here, there is also renewed political tension within the two main partners of the national unity government, Peres' Labor Party and the right-wing Likud bloc.
The economic plan was adopted Monday morning after a 24-hour Cabinet meeting, with all seven votes against it coming from Likud.
The plan was approved by Israel's parliament, but Deputy Prime Minister David Levy of Likud broke ranks with the government by abstaining in the parliamentary vote. There have been some calls for the resignation of Levy, who is considered a leading contender to take over the leadership of Likud in the near future.