Netanyahu Evil Genius 311.
(photo credit: Associated Press)
The government will meet soon with employers and the Histadrut to discuss how a
strengthening shekel is affecting the export industry, Prime Minister Binyamin
Netanyahu said Thursday.
“Who would have believed that the shekel would
turn into one of the most powerful currencies in the world,” he said at the
Israel Manufacturers Association annual conference in Tel Aviv. “I will summon
the economic roundtable as soon as next week to discuss the problems in the
industry and difficulties hurting Israeli exports.”
Shraga Brosh called upon Netanyahu to bring all the relevant sides together at
the economic roundtable.
“We have gone through a difficult period, but at
some point the road ends,” he said at the conference. “From our point of view, a
shekel-dollar exchange rate of NIS 3.50 is impossible. Over the past three
quarters, exports have weakened and job creation has come to a halt. We are very
concerned about activity in 2011 and are urging decision makers to take the
necessary steps to strengthen the dollar.”
A survey published by the
association this week found that manufacturers had lost $3.3 billion last year
due to the volatility in the shekeldollar exchange rate.
Yuval Steinitz said his ministry was in a close dialogue with the Bank of Israel
to find a solution to the problem in the foreign- exchange market.
interventionist policy by the Bank of Israel in the foreign-exchange market was
right and helped the economy,” he said at the conference.
“Over the past
few weeks we have been working in dialogue with the Bank of Israel regarding
developments in the dollar exchange rate.
We are aware of the problem it
is creating for industry and production. For the past few days a small team in
the ministry has been discussing the question of what we can or should do to
cope with the problem.”
Last year, the shekel appreciated against the
dollar about 6 percent and against the euro by 12.9%.
“The Bank of Israel
maintains a very tight leash on the exchange rate through its active currency
interventions,” Barclays Capital analyst Daniel Hewitt said in a report
Thursday. “However, the strength of the economy means that the Bank of Israel
will allow some currency gains to come through and will be delivering further
interest-rate hikes as well. In the next stage the government will have to
develop supplemental ways to contain appreciation.”
“2010 was one the
most successful years for Israel’s economy compared with economies in the
developed world, and there is no doubt that local industry has taken an
important part in the recovery through investments and job creation,” Steinitz
“Looking ahead to 2011, we have decided to leave emergency steps in
place that were introduced in mid-2009 to assist businesses, such as the export
insurance program and the fund for small- and medium- sized
National Infrastructures Ministry director-general Shaul
Zemach said only longterm planning could provide for infrastructure, electricity
and water needs.
“However, today there are no long-term strategies
implemented for water, electricity or gas supply,” he said at the conference.
“Instead, we are working with emergency plans. One of the ways for industry to
become more competitive is by reducing energy costs. The switch to natural gas
will cut costs, but we need the necessary infrastructure.
We are moving
slowly along the process. The main problem is that there are too many bodies,
from ministries to regulators, that need to make decisions. Authority and
responsibility need to be determined to advance the implementation of government
decisions and secure the electricity market in the coming years.”