Israel: Tighter Belts

Peres starts with austerity

Perhaps it was the honeymoon atmosphere, or perhaps, as one senior Israeli official said, it was simply "enlightened self-interest." Whatever the reason, Israel's freshly installed unity government got down to business quickly. At its first Cabinet meeting last week, the coalition of Labor and Likud, the country's two major political groups, decided to cut this year's $23 billion budget by $1 billion and devalue the shekel by 9%. That latter move, which dropped the currency's value from 354 shekels to the U.S. dollar to 397, was meant to stop a run against the currency that was...

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