TALKING POINTS FOR THE DDCI, (SEPTEMBER 1983) POLITICAL AND ECONOMIC SCENE IN ISRAEL

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T00287R000800720001-6
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 3
• Document Creation Date: December 22, 2016
• Document Release Date: August 30, 2010
• Sequence Number: 1
• Publication Date: September 13, 1983
• Content Type: REPORT

Sanitized Copy Approved for Release 2010/08/30: CIA-RDP85T00287R000800720001-6
Talking Points for the DDCI
(13 September 1983)
Political and Economic Scene in Israel
Domestic Scene
Foreign Minister Shamir has reached an agreement in
principle with all the factions in the ruling coalition to form a
new government on the basis of the current coalition agreement.
-- He apparently gave in to demands by coalition partners to
review budget cuts approved by the Cabinet last month and
to support religious legislation.
-- The way is now cleared for Prime Minister Begin to submit
his formal resignation to President Herzog, probably
within a few days.
-- It could still be some weeks before all the details of
forming a new coalition are worked out and Shamir takes
office, but no major changes in the current composition of
the Cabinet are expected.
The Economy
The new government will face a sluggish economy,
triple-digit inflation, and a growing trade deficit.
-- Even if the new Cabinet carries out the tax increases and
spending cuts approved last month, the impact will
probably be minimal.
-- Settlement of the doctors' strike will almost certainly
lead to demands for higher wages from other workers.
Acquiescence will only add to the large increases in
private consumption in recent years and increase pressure
on prices.
-- Despite the 7-percent devaluation of the shekel in August,
the Israeli currency is still overvalued, reducing the
competitiveness of Israeli exports and boosting imports
because they are relatively cheap.
Israeli Views on Lebanon
Israel has decided, for the moment at least, to concentrate
its efforts on building workable security arrangements in
southern Lebanon and on avoiding involvement in the current
fighting.
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2~DAI
Sanitized Copy Approved for Release 2010/08/30: CIA-RDP85T00287R000800720001-6
 Sanitized Copy Approved for Release 2010/08/30: CIA-RDP85T00287R000800720001-6
-- Contacts with key groups north of the Awwali River,
particularly Druze and Phalange, continue.
Israel now looks to the US to take the lead in shoring up
Gemayel's government and reducing Syrian influence.
-- Tel Aviv is nervous, however, that Washington may offer
Damascus political concessions--probably at Israel's
expense--to induce Assad to reach some limited, tacit
accommodation with Gemayel.
-- Tel Aviv is particularly concerned that Washington may
offer to try to persuade Israel to open negotiations on
the Golan Heights as part of a package deal on Lebanon.
-- Any public statement by Beirut abrogating the Lebanese
accord would be unacceptable to Tel Aviv and probably
wntild e the Israelis to reexamine their policy.
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SECRET
Sanitized Copy Approved for Release 2010/08/30: CIA-RDP85T00287R000800720001-6
 Sanitized Copy Approved for Release 2010/08/30: CIA-RDP85T00287R000800720001-6
SUBJECT: Talking Points for the DDCI, (13 September 1983)
Political and Economic Scene in Israel
Orig - C/NE/ISR
1 - DDI
4 - CPAS/IMD/CB
1 - C/PES
1 - NIO/NESA
1 - NIO/W
1 - D/NESA
2 - NESA/PPS
1 - NESA/AI
1 - NESA/AI/L
4 - NESA/AI/I
DDI/NESA/AI/I/
13Sept83)
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SECRET
Sanitized Copy Approved for Release 2010/08/30: CIA-RDP85T00287R000800720001-6