The wave of rising prices in Israel is getting worse day by day, the Ministry of Finance lowered the growth forecast for 2023, and the employment market that showed impressive strength after the corona virus began to crack - almost every day the citizens of the country are informed of cutbacks in one company or another, and it's not just high-tech or startups.
Interest rates in Israel and in the world are still on the rise, Israel's main trading partners are on the way to a significant slowdown, and there is fear of a recession - all of this adds fuel to the fire and does not bode well for the beginning of the new year.
The Israeli economy, which recovered from the Corona crisis with impressive speed, is entering a challenging economic period and now needs strong and stable economic leadership.
It is difficult to exaggerate the importance of the treasury portfolio in this period.
This is a headquarters office that touches every house in Israel and affects the activity of all the other offices in the government.
The Ministry of Finance has a decisive influence on how to reduce the cost of living and how to get out of the housing crisis.
However, this important file will not remain in the ruling party and will be divided in rotation between two sectoral parties - the religious Zionism and the Shas. The designated finance ministers Bezalel Smotrich and Aryeh Deri hold different economic concepts light years from each other: Smotrich is a man of the free market; Deri is A socialist who supports allowances. The common denominator between the two in economic issues is the increase of the welfare allowances and the introduction of the yeshiva budget into the base of the budget.
Netanyahu // Photo: Dodi Vaknin (archive) // Netanyahu,
Netanyahu's test
At this stage it is not clear how Netanyahu, "Mr. Economy", will manage the event of the two-headed Ministry of Finance, and according to publications, the essential decisions may have to be approved by the three - Netanyahu, Deri and Smotrich.
Even if this is true, it is a cumbersome mechanism, which is unlikely to be able to exist for a long time.
The bad news for the middle class is that neither the voters of Smotrich nor the voters of Deri will test them on the issue of lowering the cost of living, but on a host of other issues - for example the handling of illegal construction in areas C, the changes in the legal system, Jewish identity, increasing the pensions of the homeless and the introduction of yeshiva budgets for the basis of the budget.
We should note that in the first extensive interview given by Smotrich as finance minister to the ultra-Orthodox magazine "Mishpah", which spans almost 10 pages, you will not find any reference to the issue of the cost of living.
Needless to say, the responsibility placed on the shoulders of the Governor of the Bank of Israel at this time is critical.
The Bank of Israel is a professional, neutral and independent body, and it is important that it remains so.
In the meantime, there are attempts to reduce the governor's ability to influence the money market through the mortgage freeze - MK Gafni's bill, which will most likely not pass in its original form.
But besides determining the level of interest in the economy, the Bank of Israel has another central role - the government's economic advisor.
The governor has the ability to influence the decision makers, both by criticizing in public and by giving advice in closed meetings.
At the beginning of the Corona period, it was Governor Yaron who pushed for increased aid to the economy and sat up all night with the Treasury.
Who will enter the Ministry of Finance?, Photo: Oren Ben Hakon
Quite a headache
Today, the need to provide economic advice will increase significantly, especially in light of the stormy coalition negotiations that are taking place these days, when the parties are trying to close as many things as possible for their electorate so as not to be dependent on the Minister of Finance when formulating the budget.
In order to meet everyone's coalition demands, the government will have to increase the deficit, so it seems that the governor will have to raise his voice and make his voice heard more than has been done to date, and more decisively.
The governor is expecting quite a headache even during the formulation of the budget, as well as in his work with the international credit rating companies - to give explanations about the new economic policy that is emerging and to try to minimize damages as much as possible.
were we wrong
We will fix it!
If you found an error in the article, we would appreciate it if you shared it with us
/cloudfront-eu-central-1.images.arcpublishing.com/prisa/YVK4HZAFDKHYPX5IOZ5XKJSHDA.jpg)
