Netanyahu: We must prepare for a severe slowdown

"We must cut taxes, implement economic reforms, and streamline government work."

"The situation requires us to grow faster, because we're fairly small. We can move like a smart mammal and grow and take the necessary measures to grow," opposition leader MK Benjamin Netanyahu told Radio 99 program "Asakim Ba'avir" ("Business on Air"), hosted by “Globes” editor-in-chief Haggai Golan. "We must prepare for a severe slowdown."

Netanyahu added, "In order to create rapid growth and use the crisis to strengthen the Israeli economy, we must cut taxes, implement economic reforms, and streamline government work. If we do this, when the global economy recovers, Israel will be in better shape."

As for the failure that led to the crisis in investment banks, Netanyahu said, "This was not a market failure, or the result of high taxes. The real failure was that investment banks weren’t regulated like commercial banks."

Netanyahu said, "The crisis demonstrates the need for strong government that has a clear mandate from the electorate. We could hold elections quickly and dump the present Knesset, which has shown no special economic aptitude. We must give the public the opportunity to choose new leadership that will apply different tools. The lack of elections creates chronic instability."

Netanyahu said, "When I was finance minister, I did things that hurt me politically. I don’t think that I have to prove it.

"The economic price of a Knesset coalition is a flood of money because there is no clear decision by the electorate. For the same reasons in defense, and of course for the reasons of the crisis before us, the government must get a clear mandate from the nation."

Netanyahu went on to say, "The economic leadership is doing one thing, Governor of the Bank of Israel Prof. Stanley Fischer told me, and that is to examine the exposure of Israeli financial institutions. This is necessary but not enough.

"I'm always hearing about capitalism. From time to time, the government has to intervene, just as it intervened in the Great Depression of 1929. Government intervention in times of failure is not forbidden. The free economy is the main growth engine of the US. Statements about abandoning the free economy are pointless. Five years ago, Fischer warned that the central bank could collapse.

"There was a clause in the reforms we enacted that wanted change in the supervision of investment banks. Three years have gone by since I left and it hasn’t been done. The exposure of the mutual and provident funds is fairly small."

Published by Globes [online], Israel business news - www.globes-online.com - on September 25, 2008

© Copyright of Globes Publisher Itonut (1983) Ltd. 2008

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