Minister of Finance Yuval Steinitz is not at all enamored of the sense of optimism that has been in the air recently. "I read in the financial press about 'euphoria', 'boom' and other encouraging signs, and my spirits fall. That kind of euphoria is dangerous, and too early," he declared at the Caesarea Forum conference in Eilat. "Let there be no doubt, we are along way from the end of the crisis. The current indicators are too little, too soon. They don’t show recovery or emergence from the crisis. We are still in the throes of the crisis, and it will take a great deal of strength, patience, and determination before we see the end of it. There is still a long way to go," Steinitz said.
Steinitz sought to remind the conference participants just what happened to the global economy in the past year. "The world has experienced one of the most serious crises in modern history. The current crisis caused real fear for the fate of the economy and the economic structure in the largest countries, such as the US, China, and countries in Europe. We feel the consequences sharply in Israel: we have negative growth, rising unemployment, a near 25% drop in exports. We are experiencing a dramatic fall in state revenues, which leaves us with a NIS 70 billion hole in comparison with the original projections."
Why does Steinitz mention all this? Because according to him, there are those in Jerusalem who have not absorbed the severity of the situation. "Among government ministers and some Knesset members there is a kind of complacency and denial. In both the government and the Knesset we see the same old attempts to make party political gains, and sometimes sectoral and personal gains, as though these were normal times."
Still, Steinitz chose to quote Nietzsche: "What doesn't kill me strengthens me," he said, without it being clear whether he meant the future of the economy or the attacks to which he has been subjected lately. "We have not seen in Israel the chain reaction seen in some economies in the developed world. We did not see banks crashing or tottering, on the contrary, the banks in Israel have remained stable and functioning. We have not seen a collapse among insurance companies, but a slowdown in the non-banking market, where today we already see recovery. We have not encountered the need to inject billions in order to save banks or other big companies. In the real estate market too, no bubble has emerged as it has in other places."
Steinitz even complimented former minister of finance Ronnie Bar-On. "My predecessor in this post did well in the tough period after the collapse of Lehman Brothers, with the fear of a collapse of the world's financial system, that he and the Ministry of Finance did not surrender to fear and panic and acted with judgment and I think that that has proved itself," he said.
Published by Globes [online], Israel business news - www.globes.co.il - on July 1, 2009
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