Netanyahu at Knesset - Fattal - August 1, 2011
Prime Minister Benjamin Netanyahu speaking in the Knesset, August 1, 2011. Photo by Michal Fattal
Text size

Prime Minister Benjamin Netanyahu on Monday addressed the growing popular protests over the high cost of living in Israel, saying the problem with Israel's economy is the absence of full competition.

Netanyahu spoke during a special Knesset session to commemorate 71 years to the death of Zionist right-wing leader Ze'ev Jabotinsky, and used Jabotinsky's words to justify a free market economy.

"The problem is not free competition, but rather the absence of full competition, which ultimately harms the citizen," said Netanyahu in his speech, saying that Jabotinsky believed in a competitive market and explicitly wrote that Israel's economy must be a free market.

Over the past two and a half weeks Israelis have been taking to the streets in protest of the high cost of living, demanding government economic reforms.

"The government must encourage competition," continued Netanyahu. "Businesswomen and men are an integral part of our economy. The added value comes from the private sector. Therefore the government must encourage competition but there is no need to limit the individual's freedom. We must sparingly and responsibly correct the falsifications so that we do not fall from the tree from which we pick our fruit."

Netanyahu added that Israel has the resources at hand from which solutions can be provided, and added that "the fact that we have a free market allows us to deal with other deficiencies, too."

Opposition leader Tzipi Livni, who spoke after Netanyahu, said that "the free market is not a substitute for the government's responsibility to its citizens. A government does not evade its responsibility if the competition did not reach its target."

Earlier on Monday, Netanyahu commented on the growing social protests sweeping Israel and said that the protesters' complaints are justified and they must be addressed, but without harming the business sector.