Minister of Finance Ronnie Bar-On today briefed the cabinet on the economic situation and his economic stimulus plan. "We've submitted for approval a number of dramatic measures to boost the economy, solve the market failure in credit, and strengthen bondholders. These measures are root canal treatment of the crisis challenges that will first and foremost protect savers. These measures must be allowed to act, and act fast," he said.
As for the Ministry of Finance's separate plan for intervening in the capital market, Bar-On said, "We prepared a plan to provide NIS 5 billion for the establishment of joint investment funds with financial institutions, which will deal with non-bank credit and its repayment. This measure is accompanied by radical credit mechanisms to help bondholders reach debt repayment arrangements with the issuers of the bonds, and to promote tax legislation that will facilitate the functioning of the capital market."
Bar-On added, "On this matter, I suggest not falling into the trap of populist slogans about helping tycoons. Our measures strengthen bondholders vis-a-vis the tycoons; we improved the ability of good companies to deal with the credit crisis, and improved the chances of debt repayment that will benefit savers. It is highly urgent to approve the plan we formulated in this budget year, which is ending. The authorization must be made, the budgets must flow, and the tenders must be executed."
Bar-On concluded, "We are a government that is ending its term. This isn't the time to change the world or to discuss alternative ideologies. I believe that the crisis will require thorough global reforms, including in Israel. Changes are needed in the regulatory structure and the regulatory model, the risk management model and at the level of savings in various instruments by different age groups. It is the job of the state to set the rules for the market economy."
Published by Globes [online], Israel business news - www.globes-online.com - on December 7, 2008
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