Netanyahu Demands Socioeconomic Panel Find Solutions Within a Month

Netanyahu not interested in solutions that Israel cannot afford over time and would lead Israel into economic bankruptcy; cabinet dedicates meeting to socioeconomic debate.

Prime Minister Benjamin Netanyahu said Sunday that he had asked the committee of experts charged with studying socioeconomic changes to find sustainable economic solutions that would also be sensitive to the population's social needs. Netanyahu was speaking at the start of Sunday's cabinet session in Jerusalem.

Netanyahu said he was not interested in solutions that the country could not afford over time and would lead Israel into economic bankruptcy, as had happened in a number of European nations.

Netanyahu, Trajtenberg
Haim Tzach

Sunday's cabinet meeting was dedicated to economic matters and the effects of the world economic crisis on Israel.

"I have asked Prof. [Manuel] Trajtenberg to present the socioeconomic cabinet with concrete solutions during September, as early as possible."

Trajtenberg heads the committee of experts studying the issues.

Netanyahu said he wanted solutions to the issues of lowering the cost of living and closing socioeconomic gaps in Israel, including between the center of the country and the periphery.

For his part, Finance Minister Yuval Steinitz presented the cabinet with a macroeconomic survey of the first seven months of the year, with an emphasis on how actual government spending compared to the budget. Steinitz emphasized that Israel's economy was in good shape: The economy was growing, exports were rising and the budget deficit was small, he said.

Unemployment was droping and investment in Israel was growing at an impressive pace, the minister added, noting that inflation was expected to be 3.8% this year.

Steinitz said, however, that the global economic situation, particularly in the United States and Europe, was fragile, and that Israel was dependent on those two regions for 70% of its exports. "We are marching on a very narrow bridge. If we stray significantly from our economic policy, we may very quickly fall off the bridge," Steinitz said.

As for the wave of protests sweeping the country, the finance minister said that child allowances and old age pensions were being slashed in Europe, along with government spending.

Steinitz met over the weekend with a group of reserve pilots and told them he would not use tax money to bail out the large conglomerates, the so-called tycoons. He said there was no magical solution for their problems and that only reducing their leverage would work.

Bank of Israel Governor Stanley Fischer told the cabinet that the numbers were good and economic growth was forecast at 4.8% for this year, and 3.9% for 2012. He said staying within the budgetary framework was critical. According to Fischer, the markets have no mercy and Israel cannot think it is time to celebrate.