Netanyahu blasts passive economic policy

"Government must do more to save the economy from a slowdown."

bibi netanyahu frank 224 (photo credit: Ariel Jerozolimski)
bibi netanyahu frank 224
(photo credit: Ariel Jerozolimski)
Likud chairman MK Binyamin Netanyahu on Wednesday publicly attacked the government for employing a "passive economic policy" amid the global financial crisis and a possible slowdown of the economy. "The government's actions on economic policy are frozen," he said at a press briefing. "The government is not doing anything to safeguard the economy from a further slowdown, accepting as a fact that the the local economy is set to grow below 4 percent. The government should instead retreat from its passive economic policy and endorse an active policy by taking a number of vital steps to bring annual economic growth rates back to 5% and 6%." Finance Minister Ronnie Bar-On on Tuesday defended recent criticism that the Finance Ministry was not addressing developments in world markets. Speaking at the Caesarea economic conference, he said the ministry was closely following these developments and their impact on the local economy, although it did not provide forecasts on the local financial and economic situation. "We discuss these issues in internal forums on a daily basis, but not through the media," Bar-On said. Netanyahu, a former finance minister, met with Bank of Israel Governor Stanley Fischer Tuesday night. He said he strongly supported the central bank's recent interventionist and monetary actions aimed at stemming the shekel's sharp appreciation against the dollar, which are aimed at boosting economic growth and employment. "You cannot leave Fischer on his own and say there is no other choice," he said. "Fischer will do everything and we won't do anything. Fischer is doing everything in his power and I very much back the steps he has taken. Intervention in the foreign exchange market is a legitimate tool. However, the steps that are being taken have a limited impact." Netanyahu said the government should implement an active policy by endorsing a number of steps to make the local economy more competitive. "If the weakness of the dollar and the global financial and economic situation are causing difficulties for exporters impairing their competitiveness, there are steps that the government can take to ease their problems," he said. "We need to cut taxes with immediate effect to boost competitiveness and renew a number of reforms waiting in the pipeline, such as the electricity and water reform and the Israel Lands Administration reform."