In announcing a series of austerity measures immediately upon taking office, Prime Minister Yitzhak Shamir is moving boldly to restore the ailing Israeli economy. He is also taking a political risk. Many of the steps that will be necessary - to check inflation roaring along at 130 percent annually, reduce a growing national debt, and curb a worsening trade deficit - will eventually hit hardest at many of the members of Mr. Shamir's own political coalition.
It was perhaps surprising that Menachem Begin's successor, an expert in foreign policy, acted so quickly on the economy. But it has been increasingly clear during the past several months that stern measures would be required to put Israel's economic house back in order. Indeed, Mr. Begin spent a good part of his last months debating with his Cabinet over where to make budget cuts. But what helped lead to the steps just taken was last week's banking-stock market crisis. That crisis was precipitated when many Israelis sold shares in Israeli banks and purchased dollars in anticipation of a currency devaluation.
What seems clear is that the steps now taken - a 23 percent devaluation of the shekel and cuts in federal subsidies on basic food items - will not by themselves be enough. Israel has been living far above its means during the past several years.
In the months ahead, cutbacks will be cushioned somewhat by the policy of indexing most Israeli salaries to inflation. But Finance Minister Yoram Aridor has indicated that such a linking will eventually be modified. That, of course, is where the element of political risk arises, although many of the most vocal members of the governing coalition consider Israel's security as more important than economic matters.
For many Israeli voters, however, the tangible costs of security considerations will likely stand out even more clearly than before, against a backdrop of increasing belt-tightening. It will be particularly difficult for the Shamir Cabinet to reduce swelling budget deficits quickly, since roughly two-thirds of total government expenditures go to pay for defense costs as well as the servicing of Israel's large foreign debt ($21 billion).
How long the Israeli public will continue to tolerate the substantial costs of the Lebanon occupation (running at roughly $1 million a day) in a climate of mounting austerity poses a hard question for Mr. Shamir.
Still, the decisive economic actions can only be welcomed.