PM: Protests have compelled us to change our priorities

Netanyahu sets up panels to "propose practical plan to alleviate Israelis' economic burden," but cautions against "hasty, populist steps."

By HERB KEINON
Prime Minister Binyamin Netanyahu in cabinet meeting 311 (photo credit: Marc Israel Sellem)
Prime Minister Binyamin Netanyahu in cabinet meeting 311
(photo credit: Marc Israel Sellem)
With the country’s cost-of-living protests gaining steam, the prime minister and the finance minister sent out similar messages on Sunday: We hear the protesters’ pain, but must tread cautiously.
Dialogue with representatives of the protesters will begin, Prime Minister Binyamin Netanyahu said at the beginning of Sunday’s cabinet meeting. He announced the formation of a team of ministers and experts – an economic round-table – that will invite representatives of the various groups and sectors for talks.RELATED:Amid social protests, Treasury director-general resigns Livni calls on PM to cancel Knesset's summer recess
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The purpose is to hear their grievances, ideas and solutions, and “propose a responsible and practical plan to alleviate Israelis’ economic burden” that will then be brought to the cabinet for its approval, he said.
Finance Minister Yuval Steinitz, Education Minister Gideon Sa’ar and Environmental Protection Minister Gilad Erdan will be the ministers on the panel, which is also to include a number of economists – not yet named – from both inside and outside the government.
Notably absent from the panel are three former finance ministers currently sitting in Netanyahu’s cabinet: Dan Meridor, Yaakov Neeman and Silvan Shalom.
Both Netanyahu and Steinitz said on Sunday that while it was important to be attentive to the legitimate grievances being raised by the tens of thousands of people who have taken to the streets in recent weeks, Israel could not afford to throw all its economic and fiscal policies to the wind.
“We must avoid irresponsible, hasty and populist steps that are liable to cause the country to deteriorate into the situation of certain European countries, which are on the verge of bankruptcy and large-scale unemployment,” the prime minister said. “I do not think that anyone wants Israel to reach such a situation.”
On the other hand, he said, everyone is “aware of the genuine hardship of the cost of living in Israel,” which affects many areas.
“Some of the claims that are being heard are justified and some are not,” he said. “We are obligated to deal with the genuine claims and distress. Some of them are the result of distortions in the Israeli economy that have taken root here over many long years. Indeed, we must deal with the genuine distress, seriously and responsibly. This, without a doubt, compels us to change our list of priorities. We will need to do this as well, responsibly and in a balanced manner.”
Throughout the day, Netanyahu was careful in his comments not to attack the demonstrators or to question their motives, accepting that there were serious economic issues that must be dealt with. In a meeting of the Likud ministers and senior MKs that preceded the cabinet session, however, a debate ensued over what tactic to take toward the protesters.
Some – such as coalition chairman Ze’ev Elkin and Minister-without-Portfolio Bennie Begin argued that the protesters were motivated by a political agenda, while others – such as Government Services Minister Michael Eitan – said that while there were “red flags” among the protesters, the demonstrators did represent “the people of Israel.”
Begin said it must be made clear that those who were complaining about paying too much for childcare must realize that if they paid less, than the salary of the childcare provider would be cut, and the middle class would then benefit at the expense of the lower classes.
Another debate was sparked by a proposal from Shalom to cut the defense budget, who said this was possible now because of the relative quiet on the security front, an argument dismissed by others – including Begin – who said that Israel just couldn’t “wait for the next [defense] crisis” to happen, but must be prepared.
Before Sunday’s cabinet meeting, Steinitz spoke to reporters and – when accepting the dramatic resignation of his director-general Haim Shani – said he had the responsibility to “ensure that Israel does not come to economic anarchy.”
“We cannot abandon all [economic] frameworks,” he said. “We cannot neglect the economy, and the principles of the economy.”
Referring to the problems besetting economies in Europe, and the threat of government default looming over the US, Steinitz said that he had a responsibility to ensure that Israel did not face similar straits.
“So, with all our obligations to be attentive and to find solutions for the housing crisis, and to see how we can ease the cost of living, we will not abandon our principles, and not create anarchy,” he said. “We will deal with [market] concentration, but we will not turn the wealthy, the investors, businessmen and industrialists into the enemies of the people, because they are part of a healthy economy.”
Following the cabinet meeting, Netanyahu met with the members of the committee on increasing competition in the economy and directed them to speed up their work and complete the formulation of their recommendations by the end of the coming month.
Netanyahu noted that he established the committee – chaired by two outgoing directors-general – the Prime Minister Office’s Eyal Gabai and the Finance Ministry’s Shani – some 10 months ago to examine “existing distortions in the economy and recommend ways to solve the problems that are hindering economic activity.” Netanyahu said the committee needed to take action to “increase competitiveness and lower prices.”
The country’s tycoons, 18 or so of the nation’s wealthiest families who control most key sectors of the economy from real estate to banking, insurance and construction, have emerged as a key target of the protesters, and the committee is to recommend ways to end the concentration of so much of the economy in so few hands.
Meanwhile, while Netanyahu has taken pains not to attack the protesters, his spokesman Roni Sofer gave an interview to Channel 10 Sunday morning in which he said the protests were exaggerated.
“There is no problem with protests,” he said. “There is a problem with a lack of proportion.”
Sofer said that, all in all, the county was in satisfactory economic shape. “In the past we chose our place of residence according to our means. The process now is that the society has stopped giving itself limits. It wants everything now, and fast.
“I live in the country, and I think we have to put things in proportion,” he said. “When you drive on the Ayalon [Highway] and see 10,000 cars, when you look around and see the construction, and the standard of construction that is luxury housing only, when you see 1.3 million people going abroad – everyone wants to be equal. We need to put things in proportion. Unfortunately, we don’t all live on the same level,” Sofer said.
“There is a degree of exaggeration. Let’s take a woman from Ramallah, or Khan Yunis, or Beit Lahiya who is looking at Israeli society,” he said. “We need some proportion, Israel is in an excellent economic situation.”
Regarding proportion, he said the US faced possible default in a couple of days, and that “if you act irresponsibly you could end up like Greece – insolvent.”
With that, Sofer said he was not underestimating the protests, or the number of people who took to the streets on Saturday night.
“The problems exist and are real, and they need to be dealt with, and the order of priorities changed. Things will change, it’s a serious process,” he said.