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The economists react to the warnings of the finance officials. Smotrich too - voila! Of money


Following the extreme differences between the summaries of the nightly discussion at the Ministry of Finance, between the Minister of Finance and the senior officials, Smotrich published a post on his Facebook account. Former executives also respond

Minister of Finance against the rest of the world.

For him, the criticism of the senior officials of his office is also part of the left's campaign (Photo: Flash 90, Avshalom Sashoni)

Following the night discussion at the Ministry of Finance, in which dire warnings were given by the managers of the departments, warnings that cast a strange light on the jubilant response issued by the Minister of Finance, Smotrich issued a clarification that the published warnings are partial quotes that are part of a campaign (even though all the quotes were copied verbatim from official papers of the various departments in the Ministry of Finance).

We went to hear two senior economists, who are familiar with the delicate relations between senior finance officials and ministers.

Prof. Momi Dahan, from the School of Public Policy at the Hebrew University and a senior economic advisor to the former Director General of the Treasury

says: "You cannot blame the professional level in the Treasury for not speaking until now, because this is not a normal situation they have encountered in the past.

What is important is that in the end they came out and said what they thought, because it is unacceptable that the economists who submit their estimates for the growth of the economy, would not warn against damage to the economy, that is entirely the role of the economists in the Ministry of Finance, they have to base their estimates on the facts, The experience, and the economic research.

"The estimates of the economic damage following the reform should have come up at the government meeting and the chief economist did so. But as time goes by, there should be adjustments between the estimates and the budget itself, since the expected revenue and tax collection changes and this must be expressed in numbers."

In two days the debates on the budget begin in the Knesset.

"The Knesset is not a rubber stamp, and this is the opportunity to change the estimates and numbers, so that a budget law is not enacted based on unsubstantiated estimates. If this does not happen, reality will come, and there will be too great a gap between the state budget and reality, and we will pay a very heavy price for this, such as In 2002, when a budget was submitted that was based on incorrect estimates, the foreign and local investors and the credit rating companies reacted accordingly, the dollar jumped to five shekels and there were headlines about fears of a bank collapse."

How do you explain the disconnected response of the Minister of Finance, who issued a jubilant response after the dire forecasts of his economists?

"I am not a political commentator but an economist. My answer will not be better than yours."

Warnings from senior officials and the summary of the discussion issued by the Minister of Finance


Prof. Momi Dahan.

Warns against a budget based on erroneous estimates of the state's income, as happened in 2002 (Photo: Maged Gozni)

The second commenter asked to speak without attribution, but he knows the operation of the Ministry of Finance from the inside - and at the highest levels.

He utters sharp criticism towards the Minister of Finance, the CEO and the officials. "In my eyes, the paper presented by the chief economist, Shira Greenberg, was much stronger and critical, the budget department preferred to mess with the credit rating and escape the effects of the regime coup.

Only at the end of the document he submitted was there any opening for a future statement.

Shira was the only one who stood in front of the government at the budget meeting and fulfilled her role with courage.

"What is amazing is that the Accountant General, Yehli Rotenberg, did not present anything and he is the one responsible for the credit rating companies. I don't care if he personally supports the reform, it is of no interest to anyone. That is his job. Not to mention the disturbing dissonance between the things that were said at the meeting And the announcement issued by the Ministry of Finance, which talks about the 'opportunity in reform', it's like calling night day.

That way they might present our high-tech on a silver platter to other countries.

How come there was no announcement from the director general of the ministry disavowing this? But it's not just them. It's the government. The whole thing. Look what's happening in the Ministry of Transport and the Ministry of Foreign Affairs. Every Dalim has increased. Everyone is trying to grab as much as they can. "The professional level was two months late


He should have spoken much earlier.

It was not allowed to pass a budget with such an optimistic revenue forecast, how are these figures not taken into account?

After all, they have a responsibility to the state."

Maybe they are afraid.

"These positions are senior.

Whoever is afraid - let him not be there.

The only fear they should have is of the public they serve.

They should tell what they have to the Prime Minister and the Minister of Finance and if they decide to fire them, then fire them."

From what you know, is there a chance that any of the treasury officials will resign?

"Unfortunately, no".

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The Minister of Finance in Washington, last week.

I am convinced that once the truth about the reform becomes clear, the rating agencies will also be convinced, even if there is damage to the credit rating for a short time (photo: official website, no)

The third commenter to last night's events is the Minister of Finance himself.

This is what Bezalel Smotrich wrote on his Facebook account:

So this morning parts of background papers prepared by the professional departments of the Ministry of Finance for a macro discussion that took place with me on the economic situation and the possible consequences of the important legal reform we are leading on the Israeli economy were published in a trendsetting manner.

I'll start right from the end: the goal of this trending publication is of course to use it as another tool in the fight against reform on the part of its opponents, and on the way to harm Israel's economy - this too has already become a devious method for those for whom the goal sanctifies all means and are ready to burn everything here to prevent the critical corrections that we Leaders in the legal system.

But in essence this was an important discussion, not the first nor the last one that I have held inside and outside the office in recent weeks by virtue of my responsibility for Israel's economy.

I study, deepen, listen, and am committed to understanding the whole and considering all considerations as the one leading the reform with my friends - Minister of Justice Yariv Levin and Chairman of the Constitutional Committee Simcha Rothman. This is how we correct responsibly! And now let's put things in order: First, the market data of the


period As presented, they continue to teach about the strength of the Israeli economy and all the indicators are completely reasonable and far from teaching about a storm that awaits us around the corner. This position is also shared by the Bank of Israel in a series of ongoing situation assessments that it carries out.

In this context, our first and central role is to adhere to correct, restrained and responsible economic conduct, to fight inflation in order to return it to the target range as soon as possible, to accelerate growth-promoting infrastructure projects, and to continue to remove barriers and regulations in order to encourage competition and create the appropriate conditions for the continued growth of the Israeli economy.

It should be remembered that the economy is largely a matter of expectations, and the sentiment towards the market is formed based on a set of vectors - some of them are internal that relate to the steps we take in Israel in managing the economy and the state, and some of them are relative, including trust and certainty in our market compared to other optional markets.

The global crisis, with an emphasis on the developing crisis in the banks in the US (which in my estimation is still far from over) and its consequences on the continuation of inflation and the fear of a slowdown in the markets in the US, compared to the stability of the banking system and the easier management of the Israeli market, give us an advantage in this context and represent an opportunity for us .

Regarding the risks, studies were indeed presented that show a connection between damage to the democratic institutions and their weakening to the economic ratings in a variety of rating types, and of course the consequences of damage to the said ratings on the economy, in contexts of interest and growth and in any case the state's income from taxes.

But this is exactly the point: this discourse is based on the incorrect, not to say unfounded, assumption that the reform harms the democratic institutions.

Place the wanted one and then build on it wire wires of towers that bloom in the air.

There are indeed those who want to present the reform as such, but I am convinced, and so are the rest of my friends in the national camp and the majority of the people, that the reform we are promoting will not only not weaken Israeli democracy, but will strengthen it and advance it towards the models of reformed Western democracies.

The reform will correct severe distortions that exist in Israeli democracy and do not exist in any reformed democracy in the world.

In any case, our rating should not be affected and may even increase as a result.

Here Smotrich moved to a political critique that touches on other political and social issues and accuses the left led by Yair Lapid of trying to overthrow the right-wing government.

When he returned to dealing with the economy, he wrote:

"A lie does not last long. We are conducting an explanatory struggle against it, presenting the reform in a professional manner in front of the parties we work with in Israel and around the world, and at the same time working here in a coalition to clarify and refine the various sections of the reform, while listening to criticism and comments On the part of the responsible parties among the opponents of the reform, whose motives are to strengthen democracy, the economy and the state and not harm them.

Just like we did yesterday in the outline of the committee for the appointment of judges that we brought.

A balanced outline, that even those who don't like it in the first place can definitely live with it, and even with a lot of effort and creative imagination, it cannot be seen as a violation of democracy.

In recent weeks, I have been meeting with hundreds of economists, listening, consulting, hearing comments, and also explaining and reassuring.

It is a healthy process that, with God's help, will lead to an accurate and good result that everyone knows how to live with and feel that their values ​​and rights are preserved and even strengthened.

I am convinced that the reform we will advance in the end, through dialogue and listening, will be very good for the Israeli economy.

It will strengthen certainty in the world of economic contracts (after years of "purposive interpretation" that thwarted legal certainty in the business world, imposed large risk costs on a multitude of transactions in the economy, and requires huge legal expenses to accompany almost every step, and after a scandalous intervention by the court in the gas outline that fatally damaged with the trust of huge investors in the government and the ability to sign contracts with it), and above all it will reconnect authority and responsibility (after years in which authority was disconnected from responsibility and transferred from elected officials who bear overall responsibility to officials and legal advisors with a lot of authority and lack of responsibility), and will inevitably lead to a more flexible risk management model and much less regulation and bureaucracy .

Freeing the Israeli economy from the shackles of regulation and the excessive criticism that suffocates them will be a tremendous growth lever for the economy.

At the end of his words, the Minister of Finance himself insures against an imminent damage to the economy, should it occur anyway, as warned not only by senior officials of his office and not only by rival politicians, but also by many businessmen, CEOs of the largest companies in the economy and the banks: "Even if we fail, God

forbid The brief in explaining the reform in the economic worlds in the face of the deliberate and huge campaign of panic that is going on here, the rating agencies and the international banks, as well as analysts at the big investment bodies, are professional and matter-of-fact and know how to read data and numbers.

When the dust settles they will recognize the truth and reflect it in their predictions.

So even if we experience a slight tremor in the short term as a result of the false alarm campaign, and as mentioned, this is also something that we are managing and I believe that with God's help we can prevent it, over time things will clear up and stabilize for the better.

As the finance minister who bears responsibility for the Israeli economy, I take full responsibility for it and am convinced of it with all my heart.

Now look, naturally, in the Ministry of Finance, as in all government ministries, there are elements who are ideologically opposed to the reform.

Of course, there are also those who support it, and there are those who are less concerned with it.

As a Democrat who advocates for pluralism and believes in plurality of opinions as a tool that helps clarify the truth, I am a big supporter of open discourse and push for it in the office in all areas.

I'm also not afraid of conducting this discourse in front of the public in the media simply because I have nothing to hide (although I always prefer to conduct it more on the table with names and visible faces and less with cowardly leaks to the media in the name of "senior officials"... but I'm not afraid of that either. ..).

That's why I was also happy about the discussion yesterday, and conducted it for many hours in depth and in a matter-of-fact way with a lot of listening.

I hope that the listening was mutual between all of us in the management.

However, after all this, I am confident that all the people of the Ministry of Finance, who are really the patrol of the public service at the professional level, are mobilized for the benefit of the economy, know how to put aside their differences and personal opinions, and join hands for the sake of the Israeli economy.

In explaining the reform in a professional manner and in repelling the false intimidation campaign, in correctly managing the possible risks, and above all in formulating structural and budgetary solutions for each scenario in order to encourage the continuation of investments in Israel and to continue on a path of growth and development.

We have done this together in recent months with great dedication in formulating the budget and the Settlements Law, in signing the framework agreement with the Histadrut and in a series of other economic decisions and steps, and with God's help we will continue to do this together in the important struggle to lower the cost of living and navigate the Israeli economy with professionalism and national responsibility.

The citizens of Israel can be calm - you are in good and professional financial hands, who manage a dialogue, study deeply and listen to multiple opinions, and finally join hands in formulating and implementing a professional and responsible policy."

  • Of money

  • news


  • Bezalel Smotrich

  • Ministry of Finance

Source: walla

All business articles on 2023-03-21

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