Netanyahu, Lapid disagree over new BoI governor
Prime Minister Benjamin Netanyahu wants Victor Medina, and Finance Minister Yair Lapid wants Zvi Eckstein.
Last week, Committee for the Appointment of Senior Civil Servants chairman Judge (emeritus) Yaakov Turkel approved three candidates for the job: Prof. Mario Blejer; Prof. Zvi Eckstein; and Victor Medina. Netanyahu and Lapid have disagreed over which of them should be the next governor, even though they have known the identities for over a month.
Lapid's aides deny the report, but the Prime Minister's Bureau confirmed it, saying, "The matter will take a few more days." The new governor of the Bank of Israel was supposed to be announced Saturday night.
Netanyahu's aides are embarrassed by the "governor's farce", and are particularly afraid that one of the candidates will suddenly quit the race because of the amateurishness that has characterized the selection process.
Netanyahu reportedly prefers Medina, whom Lapid refuses to accept for the job. Firstly, Lapid listened to the sharp criticism against Medina by top academics and former Bank of Israel officials. For example, Prof. Omer Moav says that Medina is not proficient in macroeconomic theory, does not understand monetary policy, and his economic policy is based on a single idea: weakening the shekel to support exporters and encourage job growth - a theory that is no longer relevant. Lapid may also be concerned over Medina's age - 74 - which could affect the performance of his duties.
Another important reason why Lapid objects to Medina is the 2003 scandal over his NIS 14 million retirement bonus as CEO from Mizrahi Tefahot Bank (TASE:MZTF), which was not reported to the Tel Aviv Stock Exchange (TASE). Medina, and then-bank chairman Yaakov Perry (now Minister of Science and Technology, and a close associate of Lapid) fought bitterly.
"They will not speak to each other even now," says a source close to both Perry and Medina. "If one sees the other, he crosses the street."
In an interview with Hebrew daily "Yediot Ahronot", Perry said, "Medina should settle accounts with the Creator."
An important figure in Medina's corner is Ori Yogev, who has the greatest influence on Netanyahu, and until recently, with Lapid, who nearly appointed him as director general of the Ministry of Finance, and appointed him as director of the Government Companies Authority a few days ago.
Lapid prefers former deputy Bank of Israel governor Prof. Zvi Eckstein, who is one of his advisers. But Netanyahu objects to Eckstein. Netanyahu's aides have said in the past that he takes a dim view of some of Eckstein's acts, which seemed as if he were trying to impose his will on Netanyahu and pressure Netanyahu to appoint him.
The upshot is that the chances of former governor of the Central Bank of Argentina, Prof. Mario Blejer for the post have increased, as a compromise candidate. His edge is that neither Lapid nor Netanyahu object to him, he appears to be an easy man to work with, and he has a much lower profile than his predecessor, Prof. Stanley Fischer.
Published by Globes [online], Israel business news - www.globes-online.com - on September 15, 2013
© Copyright of Globes Publisher Itonut (1983) Ltd. 2013
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