Elusive unity
Israel's urgent economic crisis is providing the impetus to end the political stalemate brought on by the recent election. The unity-government accord reached late last week by the Labor Party's Shimon Peres and the Likud bloc's Yitzhak Shamir could at least allow Israel to move ahead on an austerity economic program - a package of wage and price controls, government spending cuts, and other moves that would in effect lower the average Israeli's standard of living by 10 percent. In turn, such a program would permit Israel to continue seeking credit through the International Monetary Fund and greater financial assistance from the United States.
Nothing is simple in Israeli politics, least of all the degree of genuine ''unity'' in a unity government. Even while a unity pact was to be signed on Sunday, differences persisted on the basic question of staying in a Labor-Likud cabinet, on West Bank occupation policy, and plans for Israeli withdrawal from Lebanon. The influential Mapam group, to the left of Labor in the new alignment, which opposes a unity government with the Likud, warns that it might make a decision to leave Labor in the lurch after the signing of an agreement. The last time Israel experimented with a unity government, in 1969 when Menachem Begin joined the ruling group, it lasted for one year. The Cabinet crumbled in the war of attrition over the Suez Canal. The Israelis argue that the earlier experiment was affected by outside factors; this time, with its financial crisis, the elements are internal - it is something the Israelis themselves must deal with. The chances are small, they say, that the government will break apart before a solution to the economic crisis is forged.
The outlines of the pact include granting Mr. Peres the prime ministry and Mr. Shamir the foreign ministry for two years; then the two men would switch roles. The defense ministry would go to Labor's Yitzhak Rabin, the finance ministry to a Likud member. The intense bargaining over the timing of rotations, however, makes one wonder how quickly pressures to speed up power sharing would build.
Some of those pressures could quickly emerge from public reaction to any austerity solutions. The proposed 10 percent cut in living standards would come on top of a 5 percent cut last year, which would put Israeli citizens back to their 1982 standard of living. It would involve a 25 percent cutback in subsidies for bread, milk, public transportation, and electricity. Government spending curbs would affect welfare programs, schools, assistance to the elderly , and community rehabilitation. Add to this a possible special 5 percent tax on house and automobile ownership, a 20 percent jump in university tuitions, and an increase in value-added taxes from 15 percent to 20 percent, and you have an austerity program that could generate its own political volatility.
Unity remains elusive on the West Bank and Lebanon issues, whatever the apparent leadership accord. On the West Bank, Labor does not object to the establishment of settlements and villages in the occupied territory, but it opposes settlements in heavily populated Arab regions. It agrees with Likud that the Jordan River should mark Israel's security border, but disagrees on the nature of a political presence for Arabs west of the Jordan. An invitation by the Cabinet to Jordan's King Hussein would be extended, for a meeting to discuss a ''just and durable peace,'' in the familiar Israeli formulation for talks. This is, in effect, an Israeli agreement to disagree on key issues like settlements in heavily Arab-populated areas.
The proposed pact calls for Israeli withdrawal from Lebanon ''as soon as possible.'' But the fate of defense minister-designate Rabin's plan for withdrawal is uncertain. It involves an arrangement with the local Lebanese population, the United Nations, and the use of electronic devices to prevent terrorist infiltration from Lebanon. It would require United Nations action and at least three or four months to carry out.
Israel is asking the United States for a 25 percent increase in aid, which already totals $2.6 billion for fiscal 1985 in legislation before Congress. The Israelis also want Congress to approve a free-trade-zone agreement, although they acknowledge it would take a year before the benefits of such an arrangement appeared.
The unity government emerging from negotiations looks fragile indeed. But any apparent progress out of stalemate for Israel, plus an economic package, might be taken as sufficient to ensure further US financial aid. Given the approaching US election, atop the lack of a coherent Washington plan for the Middle East, United States officials too will likely prefer to deal with Israel's economic plight detached from Israel's territorial and military involvements in the region, which are of at least equal concern to many Israelis and friends of Israel.