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"There is only one address for Israel's economic catastrophe - Ariel Sharon," Labor Party chairman Amram Mitzna said as he presented his party's economic manifesto yesterday at a press conference in Tel Aviv.

Laying the blame for Israel's current economic woes squarely at the feet of the prime minister, Mitzna said that although the Blumenthal affair had captured the headlines for the moment, Sharon actually was the one exercising the right to remain silent. "He sits at his ranch, surrounded by his advisers and flocks of sheep, and can't see the economy collapsing."

Former finance minister Avraham Shochat, a leading candidate for the post in the event that Labor wins the elections, charged that the 2003 budget will be NIS 15 billion short. He noted that the tax revenue figures on which the budget is based are misleading and said that everybody knows that it will be impossible for the government to collect NIS 158 billion in taxes in 2003.

"The prime minister is hoodwinking the public," Shochat charged. The government is not returning VAT by year-end 2002 in order to artificially reduce its deficit for the year, he said.

"We have reached the worst socio-economic situation since the establishment of the state," Shochat continued, adding that "the trends and developments have become so deadly that they cannot be ignored. We are in crisis without parallel."

Professor Dan Ben David of Tel Aviv University, a member of Mitzna's economic team, said that the Israeli economy was losing NIS 14-19 billion a year because there was no separation fence, while building such a fence would cost only NIS 3-6 billion. "Have you ever seen a project with such a high yield," he asked.

Ben David said that Israel had lost its social conscience and topped the industrialized nations with regard to economic inequality and poverty.

The Labor Party economic plan focuses on social issues, low pay, poverty and a change in national priorities. Mitzna and Shochat said that a government under Labor leadership would have a diplomatic horizon that would lead to renewed economic growth. Without resumption of peace talks, they stressed, it would be impossible to get the economy back on track to growth.