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(photo credit: Ariel Jerozolimski)
As the Israeli economy is awaiting the appointment of a full-time finance minister after months of running on autopilot, economists are in consensus that the position requires a political personality with the ability to drive through the next state budget.
"Israel's robust and stable economy has shown that it can also function without a full-time finance minister," said Shlomo Maoz, chief economist at Excellence Nessuah. "Still, what's important now is that a finance minister is appointed ahead of the preparation of the 2008 state budget. The right candidate must not necessarily be an economist, but a political persona with the ability to manage the ministry, keep budget discipline and most importantly get the budget passed."
Maoz added that the newly appointed finance minister will need to be cautious in securing the country's positive economic momentum, if not he said, the next finance minister "may go down in history for ruining a booming economy, which has been, in recent years, driven by significant reforms and changes."
Prime Minister Ehud Olmert, who has been acting finance minister since MK Avraham Hirchson (Kadima) suspended himself for three months in April because of bribery allegations, is expected to appoint a new minister by June 25th as part of a cabinet reshuffle.
Those mentioned as possible candidates for the post in recent weeks are all Kadima members, including Construction and Housing Minister Meir Sheetrit, who served as finance minister in 1999, Interior Minister Roni Bar-On and MK Haim Ramon. Bar-On and Ramon are considered to be favored by Olmert.
Economists are in consensus that Bar-On and Ramon are the leading candidates for finance minister because of the current political scenario, however, they were divided over who would be best suited to serve the economy in the coming years.
"On the one hand, the next finance minister needs to have an overall knowledge of the state of the economy in order to secure fiscal stability and macroeconomic performance, while on the other hand the candidate must bring social policy back onto the government's agenda, which would mean a rise in expenditure at the cost of the reduction in the defense budget," said Dr. Roby Nathanson, director-general of the Microcenter for Political Economics. "This will be a challenge for anyone, but Ramon, despite of his damaged image, is in my view the best candidate because of his economic knowledge and because of his successes in pushing through reforms such as the health law and pension reform."
The appointment of Ramon is expected to be met with harsh opposition from women's and civil rights organizations as he was convicted of committing an indecent act against a female soldier last year.
Nathanson was more skeptical about the appointment of Bar-On since he had no socio-economic background, but he added that at the Interior Ministry, Bar-On did a decent job.
"Sheetrit wouldn't be the most favorable candidate; he is a hardliner closer to Binyamin Netanyahu," noted Nathanson.
Excellence Nessuah's Maoz favorite was Bar-On due to his closeness to Olmert as well as for his strong decision-making, essential for managing the ministry and keeping budget discipline.
Vered Dar, chief economist at Psagot Ofek Investment House, also emphasized that the right candidate for finance minister would need to be a politician.
"The success of the finance minister will be measured by his ability to bring through budget decisions and to get a majority in the Knesset to pass them," said Dar. "Sheetrit would be best suited, he is a politician, he knows the Finance Ministry and he is keen to make changes, however Olmert might consider him as a political rival. Ramon is too much of a reformer, while Bar-On might be in the best position to get the budget through as Olmert's confidant."