MK Moshe Gafni. A political exercise that threatens the unique status of the Bank of Israel (Photo: Knesset Spokespersons, Noam Moshkowitz Knesset Spokespersons)
It is possible that this is a political exercise intended only to threaten, without it maturing, but in light of the fact that Israel is facing global criticism in view of the legal revolution and its possible effect on the economy, it is possible that this exercise will cost all of us dearly.
This is a proposal that was rejected by the Ministerial Committee for Legislation, but Gafni, apparently hurt by the fact that the funds promised to his party were not anchored in the state budget, as approved by the government, decided to submit it anyway.
According to the proposal, mortgages for a first residential apartment will be exempted from interest rate increases.
Ostensibly a social law designed to protect those who own only one apartment from an increase in interest rates that increases the monthly repayment of the mortgage, but in fact this is a great danger to the independence of the Bank of Israel and its head, since the Governor of the Bank of Israel is solely responsible for determining the interest rate in the economy.
Governor of the Bank of Israel, Prof. Amir Yaron.
Will his independence be compromised? (Photo: Image processing, Flash 90, Yonatan Zindel)
And what's more - given that the law is indeed passed, many of the mortgage banks will refuse to grant loans to first-time home buyers, or will ask for such a margin of protection that the buyers' wages will be at a loss.
In any case, Gafni's bill, coalition officials say, is contrary to the coalition agreement and, according to them, is intended mainly to reflect his displeasure with the way the state budget was approved by the government.
The problem is that when the eyes of the world are watching what is happening in Israel, any initiative that shows a desire to harm the independence of the Bank of Israel and its head, even if it is a lever of political pressure, could play to the detriment of Israel and weaken its economic position.
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Moshe Gafni
Bank of Israel Governor
Bank of Israel
Amir Yaron
