Netanyahu: Israel to establish emergency fund for critical industries

Consultations on the matter are being held between different government ministries, including the Finance Ministry, Ministry of Economy, the governor of the Bank of Israel, and the Prime Minister.

Prime Minister Benjamin Netanyahu discusses the impact of coronavirus with representatives from the Finance Ministry, March 5, 2020 (photo credit: AMOS BEN-GERSHOM/GPO)
Prime Minister Benjamin Netanyahu discusses the impact of coronavirus with representatives from the Finance Ministry, March 5, 2020
(photo credit: AMOS BEN-GERSHOM/GPO)
Prime Minister Benjamin Netanyahu has tasked Finance Minister Moshe Kahlon with establishing an emergency fund by Sunday to support businesses deemed critical for the economy, as the novel coronavirus outbreak continues to impact industries nationwide.
“The good news is that the Israeli economy is in good shape, even very good shape,” Netanyahu said Thursday, prior to a meeting with senior financial leaders, including Kahlon, Economy Minister Eli Cohen and Bank of Israel Governor Amir Yaron.
“The bad news is that nobody knows how this epidemic will spread, where it will reach and how much it will cost in terms of the economy,” he said. “Therefore, we have been prepared for what has already happened and for what may happen.”
Netanyahu said the Finance Ministry will work with the Bank of Israel to offer financial tools to specific businesses in need. He also called on companies, owners and businesspeople to work together with relevant government authorities and obey Health Ministry instructions regarding the 14-day self-isolation of workers returning from abroad.
At the meeting, Manufacturers Association of Israel president Ron Tomer and Federation of Israeli Chambers of Commerce president Uriel Lynn called on Netanyahu to establish a “safety net” for Israeli businesses.
Local businesses have lost billions of shekels due to the quarantine of employees, lack of supplies, delivery delays and cancellation of flights, they said.
One sector struggling under the weight of the outbreak is the aviation industry, with further flight cancellations to and from Israel announced on Thursday.
Following additional limits on movement announced by the Health Ministry for individuals arriving from Austria, Germany, Spain, France, Switzerland and Italy on Wednesday, German airline Lufthansa and subsidiaries Swiss Air Lines, Austrian Airlines and Brussels Airlines announced they would halt flights for three weeks, commencing Sunday.
Air France-KLM canceled all flights on Thursday and Friday, and Italian airline Alitalia will now only operate one flight per day to Israel instead of five.
In a filing to the Tel Aviv Stock Exchange on Thursday morning, El Al said the expanded travel restrictions implemented by the Health Ministry were likely to “further harm its revenues and financial results.” The airline said it was unable to assess the extent of the impact.
El Al announced on Wednesday it intends to lay off 1,000 permanent and temporary staff, almost one-sixth of its workforce, in the coming days as part of a series of cost-cutting measures implemented to “ensure the future” of the company. El Al executives and directors will have a 20% wage cut, taking effect retroactively since March 1.
The Israeli flag carrier said last week it expects revenues to drop by $50 million to $70m. between January and April due to the outbreak, resulting from a “significant drop” in demand and wide-ranging travel restrictions imposed by the Health Ministry.
The Civil Aviation Authority revised its estimate for footfall through Israeli airports during 2020, expecting passenger numbers to decline from 25.5 million to approximately 24 million.
Netanyahu condemned the behavior of the Maccabi Tel Aviv Basketball Club, which disregarded Health Ministry instructions by playing a Euroleague home game on Wednesday night against Turkey’s Anadolu Efes SK less than two weeks after returning from Spain, one of 13 countries now subject to the self-isolation order.
In a separate meeting on Thursday, senior officials from the Finance Ministry, Bank of Israel and the Israel Securities Authority gathered to conduct a revised situational assessment.
The economy is “strong and stable,” and the coronavirus had not caused “substantial harm,” they said in a statement. Daily assessments would be carried out, especially given additional measures announced on Wednesday to contain the outbreak, they added.