The cabinet approved proposed cuts in the 2002 state budget by a vote of 22-6. The budget law must also pass a Knesset vote before it is ratified. Five Shas party ministers, led by Eli Yishai and Shlomo Benizri, were the major opponents, because the budget cuts include taking hundreds of millions of shekels from social welfare spending. The Shas ministers walked out of the government session and paid a visit to a Jerusalem soup kitchen to express solidarity with those who are suffering as a result of the current economic situation.
According to Minister Benny Elon, Peres instructed his fellow Labor party ministers to condition their vote on the Prime Minister agreeing to let Peres continue diplomatic negotiations with the PLO. Peres said that there is no point in Labor supporting a government that has no diplomatic horizons.
Several groups staged protests against the cuts outside of the government offices throughout the day. They included Negev desert residents, students, and the disabled who all feel that the proposed reductions would negatively affect their status. Several of the demonstrators began scuffling with police and broke through some barricades near the Prime Minister’s Office.
The Governor of the Bank of Israel, David Klein, said that if the budget is not approved, he would be unable to approve a cut in interest rates. Klein said at a press conference yesterday that the financial responsibility in the proposed budget is part and parcel of an overall plan, which includes the financial incentive of lower interest rates on borrowed funds.
According to Minister Benny Elon, Peres instructed his fellow Labor party ministers to condition their vote on the Prime Minister agreeing to let Peres continue diplomatic negotiations with the PLO. Peres said that there is no point in Labor supporting a government that has no diplomatic horizons.
Several groups staged protests against the cuts outside of the government offices throughout the day. They included Negev desert residents, students, and the disabled who all feel that the proposed reductions would negatively affect their status. Several of the demonstrators began scuffling with police and broke through some barricades near the Prime Minister’s Office.
The Governor of the Bank of Israel, David Klein, said that if the budget is not approved, he would be unable to approve a cut in interest rates. Klein said at a press conference yesterday that the financial responsibility in the proposed budget is part and parcel of an overall plan, which includes the financial incentive of lower interest rates on borrowed funds.