Deafening Beat of War-drums

The immediate effect of the latest escalation on the Lebanese border is a big loss for investors, not to mention Galilee tourism sites at the height of the season. General tourism to Israel is likely to be affected too.

Painful as these results are, they are a negligible part of the big picture. Which is: the real trouble will start if this round of violence lasts for more than a few days.

The mobilization of reserve forces plus massive military action will crush share prices, and increase Israel's risk premium. Foreign investment is likely to flee.

Morover, the national agenda could be taken over by security issues, at the expense of economic and social agendas.

For months the economy and poverty had been the hottest-button issues in town. But when the second intifada began, we saw how intensive preoccupation with violent reality can destroy economic policy.

At present, the economy  is flourishing, thanks to the economic policies of the last three years and the disengagement from Gaza. But we can not live off the past for long.

For months no new economic acts or policies were made that will continue previous growth policies, or that create growth for future years.

In economics, as in business, standing still means moving backward.

Therefore, at the same time as managing the security situation in the north and in Gaza, there is a need to continue to guard the economic agenda, including reforms and a responsible budgetary policy.

Does anyone remember that only a few months ago the parties were talking about slashing the defense budget?

This is the time to signal foreign investors that while Israel is fighting for the security of its citizens, it is still continuing the economic policies that have taken it so far in the past few years.