ISRAEL: FIRST SIGN OF CRISIS; RISING PRICES, RISK OF STRIKES

Israel, which until now has been relatively shielded from the international economic crisis, is starting to feel its effects as well. The greatest impact is on the cost of living, with a sudden spike in tariffs and prices for staple goods which in these days are giving way to widespread protests against the government led by Benyamin Netanyahu and which have already driven the Country's largest union to threaten, after years, a general strike.

Starting today the premier called a series of meetings within the government and majority (which have been extended to the unions as well) to try to defuse the situation. The point is to come up with emergency measures to deal with the most frequent problems. But the situation is still tense and the demands appear contradictory, while the minister of Finance, Yuval Steinitz, the main person targeted by protesters and the press in these days, is forcibly absent: yesterday he missed the International conference in Herzliya, during the night he collapsed and was admitted to hospital for medical exams.

And the controversy rages on. Today during a radio interview Ofer Eini, head of Histadrut, the historical Israeli central union which used to be extremely powerful and still represents the main workers' union, stated that ''A large amount of Israelis believe that the government must adjust its aim and change its economic policy''. The union believes that the major issue is the cost of living and the purchasing power of wages, which in recent months have been heavily affected by increases ranging from 10% (bread) to 134% (water) and are also impacted by the cost of public transportation and taxes: local taxes, national taxes, indirect taxes.

Within the government majority, the premier's party (Likud, liberal-nationalist right wing) is however demanding that all emergency measures do not affect the middle class, its traditional reservoir of votes. Meanwhile the groups of the religious Jewish right wing are raising barricades against any potential cut to contributions to religious bodies.

The respected governor of the Bank of Israel, Israeli/American economist Stanley Fisher, the creator in recent years of the macroeconomic stabilisation of Israel, instead warned the government about potential ''populist measure''.