"We are praying for Europe's economic salvation and unity, because if Europe crashes - and we will know this within a month - it will be very hard in Europe, but also here in Israel, the US, and everywhere. There will be a 5-10 year recession," said Minister of Finance Yuval Steinitz at the "Globes" Israel Business Conference yesterday. "We're ready for a worst case scenario."
Steinitz said that he would depart for India on Monday at the head of a business delegation with the aim of reducing dependence of Israeli exports on waning Western economies. "One of the main efforts is to divert Israeli exports to the rest of the world, because 70% of Israeli exports go to the developed world, and we're trying to divert exports to China, India, and South America so as not to be dependent solely on Western countries. We've had success so far - exports to emerging markets have risen from 30% to over 40% within two years.
"Tomorrow evening, I will go to India for my first visit to the country, following a provisional agreement with India's finance minister for a free-trade zone between the two countries. We intend to foster cooperation with India as part of a great and continuous effort to deal with the crisis, which is truly changing the global economic order."
Steinitz reiterated the importance of maintaining the budget framework and encouraging investment in Israel. He said that it would be very hard to keep Israel's achievements of rapid growth and low unemployment during this time. Commenting on his public confrontation with the Ministry of Defense over the defense budget, he said, "The argument isn't over the cuts, but streamlining and transparency. I have set a goal, as a minister who supports the defense establishment and who understands that Israel must defend itself, to normalize the Ministry of Defense's finances."
As usual during a Steinitz speech during the past year, hecklers in the audience shouted, "Where is public housing? Why is every third child in the country hungry?"
Unruffled, Steinitz told a heckler, "You are invited to ask me later in a proper manner. I am not answering questions at the moment."
"How is that people in Israel live below the poverty line?" a woman in the audience shouted, and was removed from the room.
Published by Globes [online], Israel business news - www.globes-online.com - on December 12, 2011
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