Israel's Peres waits in wings as government change looms

Although opinion polls show the Israeli Labor Party and its gravel-voiced chairman, Shimon Peres, as shoo-ins regardless of whether a national election is held in June or November, the power-hungry Laborites already have launched their campaign to win -- and win bigger than ever before.

They are not waiting for Prime Minister Menachem Begin to go through the motions of obtaining formal consent from his crumbling Likud Party coalition to advance the voting date, as he and a majority of his Cabinet now publicly recommend.

Nor are they interested for the moment in the political kaleidoscope that might rearrange potential coalition partners for Labor from among the various splinter groups that proliferate in Israel's political jungle.

Labor wants to get the electioneering finished quickly, regain the reins of governmental authority it lost for the first time in Israel's history four years ago, and, if one is to take its slogans literally, point the Jewish state in a different, more realistic, more promising direction.

The obvious question is whether changes indeed can be implemented, especially with the country's inflation-wracked economy. Also whether an economically viable Israel might be better able to conduct negotiations on regional issues in which the United States, long the principal financial underwriter of Israeli deficits, is a major and, under the Camp David accords, active participant.

Mr. Peres has conducted himself with studied sobriety throughout his party's meteoric reemergence as the public's apparent favorite. He may have good reason for this downbeat style.

Few politicians understand better than Shimon Peres, a former minister of transport and defense in previous Labor governments, that Israelis will have to tighten their belts if they ever are to reverse the inflationary spiral -- now approaching an incredible 200 percent and pegged as the Western world's highest.

It may be easier for him to impose economic restraint than for outgoing Finance Minister Yigal Hurwitz, the solemn politician whose resignation Jan. 11 rang down the curtain on Prime Minister Begin's increasingly unpopular coalition government.

Mr. Peres can count on Israel's powerful Histadrut labor confederation, a vast complex of unions, consumer cooperatives, kibbutzim, and worker-owned industries in which his party has undeniable control, to help achieve his economic goals.

The practical expression of this undoubtedly will be a "social contract" between the government and Histadrut effectively to freeze wages on condition that prices are kept from rising in the interim.

Only the unavoidable increases in the cost of imported raw materials, including oil, will be accepted as valid reasons for higher prices. In such cases, the future Labor government will simply adhere to Israel's panacea: cost-of-living indexing.

One of the advantages Mr. Peres will have over Mr. Begin is Labor's big reservoir of administrative and political talent, due to its having enjoyed 30 years in power.

Many candidates for ministerial posts in a Peres Cabinet are internationally known: Abba Eban, tipped to regain his pre-1974 title as foreign minister; Haim Bar-Lev, a chief of staff between the six-day war of 1967 and the Yom Kippur war of 1973 whose name was unintentionally immortalized in the Suez Canal's ill-fated Bar-Lev line, as defense minister; Chaim Herzog, former United Nations ambassador, as information minister.

It is unclear whether Mr. Peres will select Yaacov Levinson, head of the Histadrut- owned bank Hapoalim, as his finance minister or whether other candidates will be preferred. In any case, the Labor government clearly will make economic health the basis of its diplomatic posture.

Otherwise, the Laborites will risk experiencing the ultimate threat of which the US is capable: denial of vital financial aid if Israel refuses to do as the US says in the Middle East.