Finance Min. Bar-On: My Steady Hand Kept Economy on Course

Bar-On likely to stay on if Kadima head Livni forms the government after February 10 elections.

"My term in the Finance Ministry has been characterized by responsible, careful management during a very complex and complicated time. This will enable the finance minister in the next government - either me or my successor - to better cope with the global economic crisis and with our specific problems." That is how Roni Bar-On summed up his year and a half as finance minister in a recent interview with Haaretz.

Bar-On is likely to stay on if Kadima head Tzipi Livni forms the government after the February 10 elections, but if Likud chairman Benjamin Netanyahu gets the top spot then the Finance Ministry is almost certain to change hands.

"We are currently in the midst of a serious global economic crisis that also affects us," Bar-On declared at the start of the interview. "No one knows where we are on the time line: at the beginning, the middle or the end of the crisis," he said.

"I, as finance minister, can look with satisfaction and a certain amount of pride at what we did in the treasury before the crisis and since. I shudder to think what would have happened had we not put forth [the three-part economic plan]. I am even more frightened to think what would have happened had we accepted the strident demands of various stakeholders to deal with the crisis by means of various programs."

According to Bar-On, during his term the Finance Ministry he conducted "very responsible" policies. "Neither heartless capitalism nor a socialism that ignores the business sector. We followed responsible fiscal policy that stays within spending limits and reduces the national debt while withstanding heavy pressure from all directions, including from within the cabinet and the coalition, such as the demand to increase child allowances."

"We championed a very clear socioeconomic agenda that led to a narrowing of the gaps within society. For the first time the government set measurable goals for itself in all areas of closing gaps, and met them. We took up the cause of improving the lot of the lowest economic strata by going out to work, not with state allowances. Until last November participation in the workforce had increased by an impressive amount and unemployment was at a 20-year low."

Bar-On says that when he became finance minister on July 24, 2007, the feeling in the ministry was that the period of high growth and a booming stock market would continue forever. "Time after time I was the lone, or almost lone, voice. I warned that nothing lasts forever, that we can expect rainy days too. Despite the euphoria the brakes had to stay on. When the crisis came it had to be handled skillfully.

"Out of all of this political hubbub it was necessary to figure out what had to be done and what could be postponed. Some called it non-interventionist policy. That is utter nonsense. Our policy was correct, sane, considered and balanced."

"All that at a time when the the whole world, including all the economic wizards currently convening in Davos, didn't have the faintest idea how to cope with the economic crisis. But we didn't panic, and there was no pressure. Just the opposite, we tried to send a message of calm. Our intervention was smart, reasoned.

"Look at the United States and Great Britain, two economies that are much larger than ours with much greater means with which to deal with the crisis. They emptied out their toolboxes entirely and didn't manage to solve anything. I, together with the treasury heads, proposed a rolling platform, stimulus plans, the plan for the construction industry, and soon the public will hear of other plans.

"Everyone's competing in selling fantasies, especially Benjamin Netanyahu and Ehud Barak," Bar-On said in reference to the upcoming election. "The competition is over who sells more illusions and whose illusions are more outlandish. Bibi uses false figures, lowers the interest rate by 20% and ignores the difficulty in collecting taxes. Barak proposes increasing the deficit by NIS 20 billion, to sums that the state budget cannot cope with. I am not taking part in that concert of illusions."