Israel's Central Bank Opposes Netanyahu's COVID Grant Plan

Nati Tucker
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Israeli Prime Minister Benjamin Netanyahu, right, with current Finance Minister Yisrael Katz, during the weekly cabinet meeting at his Jerusalem office, Sunday, May 12, 2019.
Israeli Prime Minister Benjamin Netanyahu, right, with current Finance Minister Yisrael Katz, during the weekly cabinet meeting at his Jerusalem office, Sunday, May 12, 2019.Credit: Gali Tibbon / AP
Nati Tucker

The Bank of Israel on Monday slammed the economic plan set forth by Prime Minister Benjamin Netanyahu and Finance Minsiter Yisrael Katz. The two hadn’t consulted with the Bank of Israel governor before announcing it.

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The central bank commented that it received the plan’s principles shortly before its publication. During a meeting in the research department it emerged that the plan lacked many details that would allow a professional assessment of its costs and efficacy. In wake of the discussion, the central bank asked the Finance Ministry and other offices for relevant details.

“When such a plan will be presented, including analysis and supporting data, the Bank of Israel will analyze it for its economic efficiency and necessity,” central bank officials stated.

"The distribution of public resources must be carried out according to economic efficiency. Indiscriminate universal distribution – like a grant for every child regardless of income – isn’t efficient. It can already be said that given the current state of the economy and vaccination rate, given the existing safety net and other steps recently taken to widen it, we must review the economic urgency in some of the proposed aid measures.”

The bank added: “Better to focus on government support to spur growth, whose contribution to revitalizing the economy will be greater. This focus will divert already limited resources away from many steps still needed for economic growth and increasing productivity after the crisis.”

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