Recovery plan / Conflict yet to come
Who doesn't love a government that hands out money and cuts taxes?
Yesterday's press conference was quite odd. The economic recovery plan and the two-year state budget won't be ready for three weeks, so why all this noise and the presentation of a half-finished job? Because it's all public relations, that's why.
Prime Minister Benjamin Netanyahu and Finance Minister Yuval Steinitz have been reading the daily news reports that the situation is dire, there's a credit crunch and the government isn't doing anything. Histadrut labor federation chairman Ofer Eini said it, the opposition said it and various businesspeople have said it.
True, the government was sworn in just three weeks ago, and one of those weeks was the Passover holiday, but in fast-moving Israel, that's too long. That's why Netanyahu and Steinitz decided to show something to the hungry public - anything to stop people from saying they're doing nothing.
So they put forth something half-baked. Even so, the plan won praise from the business community. Since it's incomplete, it presents a wonderful world of allocations, loan guarantees, support and investment - and who can complain about a government that hands out money and cuts taxes?
One section of the plan is important, and that's the remedy for the credit crisis. That can't wait. Steinitz announced a significant increase in government funds and guarantees for the banks and the business sector. We can only hope that the government will never need to make good on all the guarantees it's handing out so generously.
The smiles will fade soon enough, in three weeks, when the complete plan is submitted to the cabinet. Then we'll hear other voices, from the private sector, cabinet ministers and social welfare organizations. The hard part of the program, the one that hasn't been mentioned yet, is the need for a NIS 10 to 15 billion budget cut. Steinitz knows he'll have no choice but to cut the budgets of defense and education, as well as all the other ministries. He even knows he'll have to cut public sector wages, and told Eini so at their meeting this week.
But Eini and the Labor Party are still in denial over the extent of the economic crisis. They're still talking about not cutting the defense budget, not freezing wages and increasing the budget deficit. Steinitz and Netanyahu can't give them that. That's why the big confrontation is waiting, just around the corner. It's coming.
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