The Bottom Line / Down and out
Only one day passed since Benjamin Ben-Eliezer dropped his bombshell, before Standard & Poor's reduced Israel's domestic currency rating. Fortunately Standard & Poor's kept Israel's international rating unchanged. Standard & Poor's, in fact, were just following Fitch's lead from two weeks ago.
l The price. Only one day passed since Benjamin Ben-Eliezer dropped his bombshell, before Standard & Poor's reduced Israel's domestic currency rating.
Fortunately Standard & Poor's kept Israel's international rating unchanged.
Standard & Poor's, in fact, were just following Fitch's lead from two weeks ago.
S&P said that it had to take this action as it feared that it would be more difficult for the government to stand by its budget deficit target, and to implement its structural reforms with the collapse of the coalition.
S&P added that it was not downgrading Israel's international credit rating for the moment, and that was due to the country's relatively low level of foreign debt.
Will this second yellow card stop the right-wing parties, the ultra-Orthodox and the National Religious Party from making their sectoral claims?
Of course not. In any case, the barrage from the fresh opposition will be merciless and pointed, including the topic of terror attacks.
On the other side, the goevrnment spokesmen will no longer have someone to blame, because even Shimon Peres is out. And when the general public hears the criticism, its opinion will change and the government will be unable to take the pressure, unable to bridge all the various interests of its constituent parts without falling into another economic abyss. Therefore the government has little chance of completing another year in office.
Far better for Prime Minister Ariel Sharon to go straight round to the president on Sunday and set a date for elections in 90 days' time, hoping that the electorate will give a decisive majority to either Likud or Labor, so that a homgeneous and stable government can govern, addressing our defense and economic problems with due concern.
l Dalia Itzik. During the Trade and Industry Minister's term of office there were good days and bad days, but as we have given her many inches of copy on the down days, it would be correct, two days after the bombshell, to write a few positive words.
Two weeks ago the topic of textiles was on the agenda. During a debate of the Knesset Economics Committee, several local textile companies clamored for high quotas on cheap imports from China.
But Itzik proved that raising the quotas would increase unemployment here, would move manufacturing from China to Turkey, would raise the prices of simple clothing such as shirts and pants, and would therefore hurt the weakest members of society most. So for the time being, we have been saved from higher quotas.
The other episode occurred just a week ago. Itzik decided to encourage importing steel from Turkey by removing quotas, as the international price of steel had gone up and the local steel plant in Acre had closed.
In promoting these imports, price of steel for construction will go down and so too will apartments and infrastructure works.
This will lead to the return of dozens of metal-working plants, and thus employment will rise, in stark contrast to the frightening future that has been mapped out for us by the many industrialists who have their vested interests.