Prime Minister Binyamin Netanyahu made clear on Sunday that while he recognized that genuine economic distress was being articulated on the streets, it could not be alleviated at the cost of destroying the economy.
He spoke with one eye on Saturday night’s massive protests, and another on the mounting economic crisis in the US and Europe.
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“We will be unable to please everybody,” the prime minister said at the start of the weekly cabinet meeting where he appointed economist Manuel Trajtenberg to head a team of professionals to meet with representatives of the protesters and draw up recommendations.
“It is impossible to take the sum total of the demands regarding all the distress and say, and boast, that we can meet them all,” said Netanyahu. “We will listen to everyone. We will speak with everyone. We will hold a genuine dialogue, not pressured and perfunctory, but we will really listen both to the distress and to the proposals for solutions.
In the end, we will consider practical solutions. Practical solutions require choices. They also require balance.”
Netanyahu, who did not sound particularly shaken by Saturday protests of some 300,000 people around the country – the third straight Saturday night of large demonstrations – told his ministers that following the lowering on Friday (Saturday Israel time) of the US’s credit rating, the world had entered a period of deep economic uncertainty.
“Yesterday, something happened which had not occurred in the previous 70 years, since countries began to receive credit ratings,” he said. “The credit rating of the US, the greatest economic power in the world, was lowered by Standard and Poor’s. This event joins with the crisis that is spreading to the major economies of Europe. It is possible that 120 million-130 million Europeans live in countries that are on the verge of bankruptcy and mass unemployment.”
Those two events – the lowered US credit rating and the deterioration of key European economies – showed the need to “act with economic responsibility here while making the corrections that express social sensitivity,” the prime minister said.
Maintaining that the Israeli economy was strong, Netanyahu – speaking before the extent of Sunday’s losses on the Tel Aviv Stock Exchange were fully known – said that “social corrections” to the economy needed to be made with “sensitivity and with responsibility.”
The Trajtenberg Committee, according to the road map outlined by Netanyahu in the cabinet, will hold intensive discussion with “different groups and sectors within the public.”
This committee, whose members are to be selected over the next two days, will then make proposals to the government’s 16-minister socioeconomic cabinet, headed by Finance Minister Yuval Steinitz.
After this body hears the proposals, Netanyahu said, “final recommendations will be formulated and submitted to me. I intend to submit the plan to the whole cabinet.
I want full cabinet backing for the major change that we are about to bring to the Israeli economy.”
Netanyahu said the committee should focus on five areas: changing the country’s priorities to ease the economic burden on the population; changing the mix of tax payments; expanding access to social services; increasing competition to reduce prices; and implementing the housing plan the government has already launched.
“It is impossible to ignore the voices coming from the public, and there is no reason to do so,” the prime minister said. “We want to give genuine solutions. We will provide them. I would like to give these solutions, in a thorough – not cosmetic – way.”
The government was “aware of the fact that working couples with children are finding it difficult to make it through the month,” Netanyahu said. “We recognize the plight of students who cannot pay their rent.
We are aware of the distress of the residents of [poor] neighborhoods, of discharged soldiers and of others. We want to provide genuine solutions.”
Trajtenberg, currently the chairman of the Planning and Budgeting Committee of the Council for Higher Education in Israel, served in the past as the head of the National Economic Council, and as the prime minister’s chief economic adviser from 2006 to 2009.
He said he was taking on the new job with “mixed feelings,” both “excited” by the “rare opportunity to bring about genuine change,” and with a “deep awareness of the great responsibility that this task entails, given the expectations and the risks.”
Trajtenberg characterized the current protests as a “very strong, very impressive and unconventional process.” The protests expressed both “frustration, pain and disappointment” that a reasonable economic existence seemed a remote dream for young working families, and a “very tangible yearning, hope and longing for social justice,” he said.
“Pain on the one hand and longing on the other signify a great potential for a change for the better within Israeli society,” Trajtenberg said. “To a large extent, this depends on the ability to translate these genuine feelings from the language of protest into a language of deeper professional understanding, and eventually into the language of action, policy and implementation.
“The translator’s task is not easy. The dictionaries of the past will not help. They failed. We must find, we must perhaps invent the Rosetta Stone that will allow us to do the work.”
Kadima on Sunday dismissed Netanyahu’s announcement of the formation of the socioeconomic committee.
“Instead of a roundtable for dialogue, there is a long, one-sided table of ministers who are disconnected from the public,” a Kadima source said.
“Netanyahu continues to prove that he does not care about the demonstrations and offers the protesters more of the same thing instead of understanding a real change is necessary,” the Kadima source added. “He ignored 150,000 people who opposed the National Housing Committees bill, and now he is throwing sand in the eyes of 300,000 protesters.”
Labor leadership candidate MK Isaac Herzog said that “the lip service Netanyahu is paying to the social demonstration crosses every line.
“Instead of adding experts on social welfare and representatives of NGOs that are familiar with the crisis, Netanyahu has built a bizarre and bloated staff of 18 ministers, so none of them will get hurt,” Herzog said.
He added: “Netanyahu is confused. His problem isn’t with his ministers, but with the whole nation, which has already lost faith in him.”
Meanwhile, the prime minister failed to mobilize enough support inside the cabinet for reform in the country’s dairy market that would include opening up imports of dairy products, and a vote on the reform – opposed by the country’s dairy farmers – was postponed until next week.
Dairy farmers demonstrated at highway junctions across the country on Sunday morning, to protest the government’s intention to open the market to more imports, thereby lowering the price of their products.
In the North, around 50 protesters blocked the Megiddo junction, Israel Radio reported.
Other demonstrations were blocking the Yagur, Tzemah and Golani junctions.
Lahav Harkov and Jerusalem Post staff contributed to this report.