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Bank of Israel governor David Klein said Thursday that the government should continue with its efforts to cut the state budget, since the interest rate experiment started in December 2001 has failed.

Klein was speaking at a conference organized by Ma'ariv, to discuss the state of the Israeli economy in light of the emergency economic plan implemented by the government. "The experiment of December 2001 has failed," said Klein, "and we are back at the starting point, only conditions are harder now."

Klein was referring to the December 2001 decision by the Bank of Israel to cut interest rates by relatively steep two percentage points.

The conference was attended by senior figures in the Israeli economy, including the Finance Ministry's accountant general, Nir Gilad, the managing director of the Tel Aviv Stock Exchange, Sam Bronfeld, and Yair Rabinovitz, the conference host.