Fischer: Israel can maintain growth in 2012

Bank of Israel governor says he thinks the euro will survive, along with its member states, says he was 'hurt' by IMF rejection.

December 29, 2011 12:12
2 minute read.
Stanley Fischer at press conference in Jerusalem

Stanley Fischer at press conference in Jerusalem_311. (photo credit: Reuters)


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Bank of Israel Governor Stanley Fischer warned Thursday that unemployment could rise slightly next year and that financial markets could stagnate, but said that the Bank of Israel has the tools to cope with this scenario.

In an end-of-year interview with Army Radio, Fischer added that "unless there is a disaster in the Europe and the US is all right, we can emerge from 2012 with the average growth rate of the past 30 years."

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"The euro bloc will ultimately not break up, and its current member states will remain," he said. "The euro will survive, and it will probably survive will all its current member states."

In the past year, the Bank of Israel governor said he thought, "The Europeans were prepared to let a country or two quit the euro, but then realized the repercussions and decided to try and save the bloc as is."

Fischer also discussed what he called the "bazooka" waiting the markets - the European Central Bank's bond purchasing program. "The Germans learned one thing about inflation, which gave the world Hitler - they learned that central banks must not buy government bonds. What should a central bank do today? Buy government bonds. All the Germans knew that this was wrong. Chancellor Angela Merkel sought a solution, and it takes time, but they've been making rapid progress in the past two months."

As for Israel's social protest movement this past summer, Fischer said the events will not be easily forgotten. "They are there, and that's one of the achievements."


Social protesters raised the country's level of awareness those issues they were demonstrating against. "The demonstrators chalked up a success in public awareness and in policy. I assume that there will be more achievements, but they can't get everything."

Fischer also addressed his failed bid to lead the IMF this past year, saying he was hurt by the rejection, although admitting he "knew in advance that the likelihood was low."

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