Labor may drop coalition preconditions

Party closer to joining Livni government as aides hint Chairman Barak appears willing to postpone talks on increased funding until ramifications of global financial crisis clearer
Attila Somfalvi

Tzipi Livni and Labor Party head Ehud Barak met Sunday evening with financial advisors in the framework of the newly elected Kadima chairwoman's ongoing efforts to form a new coalition. Livni's initially allotted 28 days to form a coalition end in two weeks. The two-hour meeting, which was held at Barak's request, came amid Labor's demand to increase the government's spending limit. The sides also consulted with the financial advisors on possible ways to deal with the global economic crisis and its affects on Israel.


All but one of the financial advisors said they were against increasing the government's spending limit for welfare aid and only recommended expanding the budget to accommodate specific crises.



The advisors suggested delaying the discussion on possible additions to the budget by another two or three months, when the ramifications of the global financial crisis on Israel's economy are clearer. The experts suggested establishing a safety net for pensioners and pension funds. In any event they unanimously agreed that in light of the crisis, the government would have to invest billions in infrastructure.



Labor wants to see the budget's limits expanded from 1.7% to 2.5% more than last year's boundaries.



A Barak aide told Ynet following the meeting that the Labor chief "may be willing to consider delaying the talks on the budget," indicating that Barak may be willing to resume the discussions after signing a

coalition agreement and joining Livni's new government.



Earlier on Sunday Finance Minister Bar-On reviewed the world financial crisis for his fellow ministers at Olmert's request, and concluded by saying that "while there is no cause for concern at this time, we mustn't exceed our set budget."



On Friday Transportation Minister Meir Sheetrit told reporters in Washington "I don’t think Israel can afford to revise its budget at this juncture. Deviating from the State Budget now would be catastrophic, particularly in light of the global financial crisis and its future ramifications on Israel, which may be severe."