Netanyahu’s Top Economic Adviser Since 2009 Set to Step Down

Moti Bassok
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Eugene Kandel.Credit: Ofer Vaknin
Moti Bassok

Eugene Kandel, the economist who’s played a central role in the highly contentious public debate over the natural gas cartel, has told Prime Minister Benjamin Netanyahu he intends to step down as head of the National Economic Council.

Kandel, 56, has served as the council chairman since 2009, serving in three Netanyahu governments and as the prime minister’s point man on economic issues. Known for his neoliberal outlook on economics, he worked closely with, and earned the respect of, Netanyahu.

When Stanley Fisher announced in 2013 he was stepping down midterm as governor of the Bank of Israel, Netanyahu offered the post to Kandel, who turned it down. When other candidates like Jacob Frenkel and Leo Leiderman fell out of contention, Netanyahu appealed to Kandel – again to no avail.

It is not known why Kandel has chosen now, halfway through his second four-year term, or when he intends to leave.

News website BizPortal reported, though, that Kandel hinted last week at an energy conference he was readying to leave for personal reasons.

“I admit it’s not easy right now to be dealing with a situation that’s so emotional and so much in the public eye,” he told the website. “I can tell you my family is fed up with seeing my face in the newspaper, and I am, too.”

As the man assigned by Netanyahu to devise a framework for the structure of the gas industry and negotiate terms with energy companies Noble Energy and Delek Group, Kandel has faced severe disapproval in recent weeks from critics, who say the government’s proposal does not go far enough to ensure competition or low gas prices to consumers.

The government is now struggling to win Knesset approval to advance the plan and circumvent the authority of Antitrust Commissioner David Gilo, who opposed the plan. Nevertheless, media reports Thursday said Kandel’s plan to step down was not connected with the gas controversy.

In a report released in May, State Comptroller Joseph Shapira faulted how the council – part of the Prime Minister’s Office – operates, and cited shortcomings on Kandel’s part. The council failed to provide written policy analyses to the cabinet on economic matters, most notably the budget, Shapira wrote.

Kandel is only the second person to chair the National Economic Council, which was set up in 2006 and led in its first three years by Manuel Trajtenberg (who later headed the committee charged with identifying reforms, in the wake of 2011’s social-justice protests).

Kandel was born in Moscow, to Zionist parents who fought the Soviet government for four years for the right to emigrate to Israel. In 1977, the family reached Israel and settled in Jerusalem, where Kandel earned bachelor’s and master’s degrees in economics from the Hebrew University. He later gained his doctorate at the University of Chicago. He returned to Israel and eventually chaired Hebrew University’s economics faculty. He published important works on his area of specialization – financial markets and intermediation.

While serving as head of the economic council, Kandel led efforts to integrate ultra-Orthodox Jews into the labor force and military service, and helped with the RAND Institute’s strategic plan for the Israeli economy for the next 15 years – which was approved by the cabinet last Sunday.

Kandel also served on the most important government committees charting economic policy, including the Trajtenberg committee; the business concentration panel; and the Sheshinski committee examining taxation rates on natural resources.

It’s not known whether Kandel will return to academia or pursue a new career.

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