"There is an understanding between Prime Minister Benjamin Netanyahu and Bank of Israel Governor Prof. Stanley Fischer about a second term," a senior source in the prime minister's office has informed "Globes." The source said that it was the prime minister who brought Fischer to Israel when he was minister of finance and he wants the governor to stay on for a second term starting May 2010. The source said, "Fischer knows it well enough."

In recent weeks there have been reports that Fischer has not yet agreed to serve a second term following pressures from his family to leave the country and work in the US, where some of the family are already living. The source said, "We have heard these rumors and the prime minister believes that if they were true Fischer would have told him about them."

However, there is a widening rift between Minister of Finance Yuval Steinitz and Fischer, who was not told about the surprise decision last week to lower VAT from 16.5% to 16%. This rift is viewed with concern by the prime minister.

Published by Globes [online], Israel business news - www.globes-online.com - on January 5, 2010

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