Stanley Fischer, Are You Deserting a Sinking Ship?

Is the respected economist jumping the good ship Bank of Israel because economic havoc looms, or is he angling for a different job?

Meirav Arlosoroff
Meirav Arlosoroff
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Meirav Arlosoroff
Meirav Arlosoroff

The timing of Stanley Fischer’s departure from his position as governor of the Bank of Israel could not have been worse – just one day after it became known that the Finance Ministry is facing collapse and the forecast for the 2013 and 2014 budgets are gloomier than ever. The last thing Israel needs now is to lose its highest-ranked financial leader.

Fischer stood amid all the financial and leadership chaos like a fortress of stability, logic, level-headed judgment and international reputation. As Israel lost its economic way, Fischer was the last leader who still charted a clear and safe path that the public could go upon. He was the last leader in whom the Israeli public had absolute trust – and now he, too, is leaving.

One cannot help but be disappointed by his timing. Of course, it's very likely that this date was long in the offing, and decided upon for purely personal reasons: He has served in the position for eight years and he is about to turn 70. Still, in light of this week’s events and the Finance Ministry’s tough situation, one cannot help but wonder whether he could have postponed his departure by a few months.

In addition, his departure comes very close to the time that the Knesset and the government were to approve the new state budget, meaning the two-year budget for 2013 and 2014. That one will be the toughest in many years. There are many fears about getting the budget approved, and by the time Fischer leaves, it still may not be. If that happens, he will be making his exit in the middle of the battle.

Not only that. Fischer himself expressed deep pessimism about that battle. In his latest public speech, he estimated that the government would fail to meet the deficit target and would not make the required cutbacks in the 2013 budget. So there is room to fear that Fischer may be fleeing the battlefield just before the economic failure hits – a failure that could tarnish his image as the one who brought Israel’s economy back to health. If Fischer does, indeed, do just that, he will be leaving a tough legacy for his replacement.

From all these perspectives, Fischer’s departure now, of all times, is a blow to the economy and morale alike, and that is a shame. But some good could still come out of this if Fischer should continue to work for both the economy and the state as Israel’s next finance minister. It is believed that if Netanyahu is wise enough to offer Fischer the position, he would accept. Fischer would be an excellent choice for the position, and he could help improve Israel’s image in the world. Might this possibility explain the odd timing of his departure from his current post?

Bank of Israel Governor Stanley Fischer.Credit: Olivier Fitoussi / BauBau

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