First casualties: Small Businesses • Chairman of the Histadrut: "The government needs to join hands" • Prof. Moab: "A sustainable society needs to go bankrupt"

In recent days, the e-mails of the media feel something about the travel agencies' feelings - a wave of cancellations for conferences and events. Some of the canceled conferences are for dozens of people - not two thousand, as the new directives require, which previously banned gatherings of 5,000.

Ministry of Health instructions to prevent the spread of the Corona virus in Israel // Objective: Ministry of Health

Unlike canceling private events, these cancellations have a much broader meaning than they are - they are about canceling income for the event business, catering and other vendors. This, in addition to eliminating the business income that the event, the business, is intended to generate. Exhibitions, conferences and fairs are designed to promote sales, create business relationships that give rise to collaborations for the coming months.

The event hall owners, who convened an emergency conference earlier this week, talked about the danger of layoffs of 150,000 workers. An even greater number of workers have already been dispatched to their homes - the greater part of them without leave from the tourism industry. In the entertainment and leisure sectors - restaurants, theaters, cinemas and the like, there has been a sharp decline in activity cycles. Malls send sellers to their homes and reduce expenses.

No body has yet collected data on farms from workers sent home, some paid for vacation leave, but it is clear that there are hundreds of thousands of workers who are not producing now. For now, this is billions of shekels, and most of the losses are absorbed by the business owners themselves.

For the time being, the state only offers loans for five years, with 85% state guarantee and NIS 4 billion. Quite a few of these loans are likely to be realized by the principal guarantor, which is the state. When this program comes into effect, probably in the next few days, they will help good businesses that are suffering from cash flow distress. Many businesses will give up the loan route because they are also leveraged.

The current situation is expected to continue for at least another three weeks and a reasonable chance that this will happen. As the situation continues, we will witness business crashes. The State of Israel, like every country, has great difficulty in assisting small and medium-sized businesses in financial compensation, so the loan fund is a reasonable and essential solution. If the market demands it, it will be sensible to increase the plan, subject to careful scrutiny whereby funds are allocated to businesses that were profitable before the crisis, in order to reduce the realization of guarantees as much as possible.

Require 30 billion

The Histadrut and the business sector require the state to transfer NIS 30 billion to the business sector following the Corona crisis.

"We need economic leadership today that will start transferring money, and there will be money for the country," Histadrut chairman Arnon Bar-David said yesterday. To join hands with the Histadrut and the employers. "

Acting Chairman of the Business Sector and Peasants Association, True Bear, compared the Corona to war times. "As we have been asked to be a strong back and stand alongside the state and the workers in every military fight, today we expect the state to come alongside us," said Amitai. To the dead, we demand that the government put us in the same fund as a NIS 30 billion property tax fund for employers. "

Allegedly, the demands of the Histadrut and the independent organizations for government support meet the government with a coffers in a bad situation. Yesterday, the Central Bureau of Statistics released data on growth, imports and exports and other macro data indicating good performance relative to developed countries in the world. The growth rate in 2019 was 3.5% - a fantastic rate in a very weak growth environment in most countries of the world.

Exports from Israel grew by 4.1% and exceeded the volume, which grew by 3.6%, leaving Israel with a surplus in the balance of payments. The standard of living has also risen at a higher rate than in previous years - 1.9%. However, GDP per capita grew by 1.6% and growth from the beginning of the year is on the decline; The government is carrying a deficit of more than NIS 55 billion and the public is losing its assets on the stock exchange - which will affect consumption in the future, as evidenced by the February consumer confidence index.

In the current situation, the government must not err in dealing with this crisis, certainly not in the present situation, with the Corona only hiding other security risks for a moment.

"Reasonable idea"

Prof. Omar Moab, a researcher at the Aharon Institute of Interdisciplinary and at the University of Warrick in the United Kingdom, tells Israel Today that "the idea of ​​streaming aid for billions of shekels is simply unfounded. We are not at war. Transmission of aid is not free, but will be at the public expense, Especially at the expense of the weak, who will become hostages by the Histadrut, industrialists and other interest groups. There is no reason for Israeli citizens to pay the salaries of El Al pilots, who also earn far more than the average citizen. "

Moab, who served as adviser to Finance Ministers Roni Bar-On and Yuval Steinitz during the economic crisis of 2009-2008, says: "The crisis was more than that of the Corona today, the pressures were tremendous to release money, as if the Treasury was a bottomless pit. Easy, we took responsibility and the Israeli economy went through the crisis with tremendous success, better than other countries. There is no reason to act differently this time. "

Tell you that Israel is in better shape today than a decade ago.

"Inaccurate. We are entering a crisis with a high structural deficit. Companies suffering from a temporary crisis should raise private sector capital and streamline. Not forcing the public to fund them. An unsustainable company needs to go bankrupt, and not require Israeli citizens to pay out of pocket to save it. Grants and loans are encouraging adversity. They will incentivize businesses to look poor, rather than optimize. "