Netanyahu Unveils $2.9 Billion Package to Battle Coronavirus Fallout

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PM Netanyahu presents new measures to curb the coronavirus crisis and its impact, Jerusalem, March 11, 2020.
PM Netanyahu presents new measures to curb the coronavirus crisis and its impact, Jerusalem, March 11, 2020.Credit: Haim Zach / GPO

Prime Minister Benjamin Netanyahu said Wednesday the government is allotting another 2 billion shekels ($570 million) to addressing the coronavirus crisis and doubling its loan fund for struggling businesses to 8 billion shekels.

“We’re providing a 10-billion-shekel [$2.9 billion] package to stabilize the economy,” Netanyahu told a press conference. “This is first aid. We’ll provide additional aid as needed.”

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One billion shekels will be allocated to the health sector to increase medicine supplies and prepare hospitals, and another billion will to go to needs such as the police, the prison service and the fire and rescue service.

The government will be ensuring the supply of goods and will be easing import regulations. The airline industry will be handled separately, Netanyahu added.

The prime minister, sitting alongside Central Bank Governor Amir Yaron, Finance Minister Moshe Kahlon and other officials, projected optimism on the economy’s capacity to weather the crisis.

“The coronavirus has a major economic impact,” he said. “We’re entering the crisis in good shape. The Israeli economy is in better shape than many other countries’ economies. We can pay our debts; the banks are stable. That said, there’s a major challenge here, and we’re aware of it.”

Kahlon said the loan fund had received a lot of interest from prospective borrowers. Businesses that are approved will receive the money in a week to 10 days, he added.

“It’s very simple,” he said. “Any business that has incurred damage [directly from the coronavirus] can receive a loan. These are loans with good terms. The interest is low, the guarantees are very low.”

Kahlon said the government was preparing additional tools to aid the economy that would probably be announced next week. “The economic aspect of this is under control,” he said.

The director general of the Finance Ministry, Shai Babad, noted that workers who are being placed on unpaid leave can receive unemployment benefits from the National Insurance Institute.

Tel Aviv stock exchange during the coronavirus outbreak, March 9, 2020. Credit: Eyal Toueg

Unpaid leave entitles a worker to immediate unemployment pay without having to use up vacation days first. Unemployment pay covers 70% of a worker’s salary, up to a cap of 10,000 shekels a month, for 50 days.

“If the crisis continues and worsens, the lack of a government or a budget won’t prevent us from providing the appropriate response,” Babad said.

Some business-sector sources criticized the government’s response, saying that the loan fund has essentially been around for years but is underutilized because it doesn’t offer proper support to struggling businesses even in normal times.

The chairman of the Histadrut labor federation, Arnon Ben-David, and business associations chief Dov Amitai praised the government for responding but said the response actually wouldn’t do anything to help the economy.

Loans aren’t a real solution for collapsing businesses, they said, calling on the government to hand out money to companies and sectors in crisis.

Tourism industry executives also expressed disappointment with the  response to the crisis. Yossi Fatael, head of the Israel Incoming Tour Operators Association, said it was a mistake to prioritize airlines without taking other tourism businesses into account. He said it was the tour organizers who bring the tourists to the flights.

A group of pilgrims carrying a wooden cross and wearing protective masks approach the Church of the Holy Sepulchre in the Old City in Jerusalem, February 27, 2020.Credit: AFP

“Without us, there won’t be tourists for airlines or hotels,” he said. Incoming tourism is Israel’s sixth largest export, accounting for 4% of GDP, he added.

Others expressed concern that the self-employed – particularly in the tourism industry – are not receiving enough attention. Israel has around 500,000 self-employed people and is responsible for up to 2 million jobs.

“We can’t take loans,” said Roy Cohen, president of the federation of self-employed people. He called on the government to return the tax payments from small businesses instead.

The self-employed are not eligible for sick leave if they’re forced to be in quarantine, even though many need to attend large conferences or meetings to earn a living.

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