Steinitz: We’ll intervene against cartels, monopolies

"We must see the whole picture, in which the price paid by the Israeli consumer is part of our considerations."

By SHAY NIV
June 19, 2011 22:19
3 minute read.
FINANCE MINISTER Yuval Steinitz

Finance Minister Yuval Steinitz 311. (photo credit: Courtesy: Ministry of Finance spokesperson)

 
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Finance Minister Yuval Steinitz hopes to promote the imposition of the Restrictive Trade Practices Law on agricultural produce for the first time, and has discussed the matter with the prime minister, he revealed on Sunday in a speech at the Caesarea Economic Policy Planning Forum in Rishon Lezion.

Referring in particular to the increasing public discontentment over the price of cottage cheese, Steinitz said: “As minister of finance, I have to concern myself with agriculture and industry, but we must see the whole picture, in which the price paid by the Israeli consumer is part of our considerations. As we did with telecommunications, together with the Ministry of Communications, when we introduced additional operators, we will take such action as is necessary in the cheese market. It can’t be that we should pay double.”

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Steinitz said that if it turned out that prices of cheese in Israel were double the prices of equivalent products in Europe – as is being claimed by consumer groups – this would clearly be intolerable and in need of being remedied.

“If it does not sort itself out, for public protest can have an impact, we will consider a series of measures. They include removing barriers to imports in order to create genuine competition for the Israeli consumer. It also includes the question of restoring price supervision.”

Steinitz said that he has defended consumers in the past, and added a threat to prominent businessman Yitzhak Tshuva and gas companies: “If anyone thinks they can exploit what it happening in Egypt to raise the price of gas, and as a result raise the price of electricity, they are mistaken. This is how cartels and monopolies behave. We are already considering the idea of turning natural gas into a product under supervision, or declaring the gas partnerships a monopoly.

“Where there is real competition, we will leave matters to market forces, but where there is no competition, we will intervene.”

Steinitz also addressed the issue of foreign workers, who said harmed Israeli workers: “The foreigners are not crowding out the CEOs, or the lawyers, or the brokers, or El Al pilots. They are crowding out the simple workers, the builders, the cooks, and the cleaners.

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“Employing foreign workers enlarges wage gaps because it creates competition for the weaker members of society. Therefore, the most important rule at a time of growth is to insist on halting the growth in the number of foreign workers.

“We are witness to growing pressure from interest groups that want to bring in foreign workers...because they want to build and they want manpower, whether from Romania or other places. We must stand up to these pressures, even if it means a slightly lower rate of growth.”

However, he ignored a remark from Globes to the effect that he himself had surrendered to pressure from the Association of Contractors & Builders in Israel and the Histadrut labor federation and had decided to freeze the policy of reduction in the number of foreign workers in the construction industry.

As European finance ministers were meeting Sunday to hammer out a new Greek bailout package, Steinitz also said in his speech that Europe’s debt crisis still threatens Israel’s economy, which hasn’t “reached a safe haven yet.”

“Europe is a main economic partner, our main trading partner. What is happening in Europe and the US means that the global crisis isn’t over yet. We are still in the danger zone.”

The Israeli economy expanded at an annualized 4.8% in the first quarter, faster than previously estimated, as exports and investments climbed, according to the Central Bureau of Statistics.

Bloomberg contributed to this report

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