Steinitz optimistic on economy but says there's 'still a long way up'

Steinitz optimistic on e

By REBECCA ANNA STOIL, JERUSALEM POST STAFF
November 12, 2009 04:06
1 minute read.
Steinitz Gafni 248.88

Steinitz Gafni 248.88. (photo credit: Ariel Jerozolimski)

Finance Minister Yuval Steinitz enjoyed a very different welcome than he had during the Knesset's summer session when he visited the Finance Committee Wednesday to present an optimistic periodic briefing on the state of the country's economy. While previous meetings found Steinitz facing off against angry MKs from both the coalition and the opposition, Wednesday's meeting verged on the jovial, with Steinitz and Committee chairman Moshe Gafni exchanging humorous asides while congratulating the strength of the economy. The fights of the summer session were alluded to when Steinitz said that even he was "uncomfortable with the across-the-board cut to the budget, and I am still not happy with it, but I hope that we will never need it again in the process of creating a multi-year budget." He did, however, emphasize that there were precedents for similar cuts in previous budgets. He also said that he would allow slight amendments to the drought levy, and that he opposed the cancellation of the "painful but necessary" tax. "Together with the public opinion campaign," he added, "the levy is finally leading to lower water usage rates. Finally, something real is begin done in face of the economy's water problems." "We do not want to reach the same situation as Cyprus," he warned. "They did not tax water usage, and today a large part [of the country] only has water every other day." Steinitz was more optimistic regarding the general state of the economy. He predicted that Israel's economic growth would be higher than one percent in the second half of the year, but warned that Israel had not completely recovered from the financial crisis, and that there was "still a long way up." "We were worried we would have the same unemployment rates as in North America and Europe. Unemployment in Israel is high [8%], and it is a situation that we cannot accept for a long time, but we did not reach the high rates we had feared and we are currently at a stage of stopping it. We were concerned that it would exceed 10%," Steinitz told the committee. "We are in the process of exiting the crisis, and in the middle of climbing," Steinitz emphasized, explaining that Israel has recovered quickly and the continuation of Israel's high credit rating makes the Israeli economy unique. "But the way is still long and requires caution."


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