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The president of the Israeli Chambers of Commerce, Danny Gillerman, today called on prime minister-elect Ariel Sharon to build a national-unity government incorporating the Labor and Likud parties.

"The good of the economy and the immediate need to brake the slide into another recession require a national-unity government," Gillerman said.

He said that given the fragmented nature of the Knesset, a government under Sharon would not be able to halt the economic slide without backing from Labor.

On Tuesday Israel voted for a new prime minister. Ariel Sharon won a landslide victory against the incumbent prime minister, Ehud Barak. But the Knesset, Israel's parliament, remained in power as is.

Fragmented parliament

Out of the total 120 seats, the One Israel party, encompassing Labor, has 26 seats, Likud has 19 seats, the Sephardic religious party Shas commands 17 seats, and the dovish Meretz party has 10 seats.

Three parties have six seats each the Russian party Yisrael B'Aliyah, the secular party Shinui, and the hapless Center Party, which is today essentially defunct. Then there are two religious parties with five seats each, one Arab party with five seats, two parties with four seats, one with three and two with two.

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In other words, Likud leader Ariel Sharon could cobble together a narrow right-wing-religious coalition commanding 63 seats, or, a three-seat majority. Slim indeed.

As Gillerman pointed out, after his landslide victory Sharon certainly could claim to have a mandate to act in the social and economic spheres. But, Gillerman insists, Sharon will find himself paralyzed unless he constructs a coalition with Labor and its 26 votes.

Economic growth has slid backwards in the fourth quarter, since the resurgence of fighting between Israelis and Palestinian. This fact requires prompt action by the prime minister-elect, Gillerman said.

One immediate step the new government will have to take include passing a budget through Knesset. Unless it manages to do so by March 31, under law, a new round of general elections must be held.

Economic cabinet

Gillerman also called on Sharon to set up an economic cabinet to implement economic policy. In parallel he recommends an economic panel encompassing government officials and representatives of the business sector, as well as labor representatives.

On the budget, Gillerman said that although restraint is central to stability, given the need for increased spending on security and the harm the hostilities have done to the economy, a certain departure from the original deficit target could be permitted.

Gillerman also noted that immediate steps were required to block the implementation of costly private bills passed by partisan members of Knesset in recent weeks.