While Israel's economy has weathered the global economic downturn relatively well, a financial crisis in Europe would present a difficult challenge, Bank of Israel Governor Stanly Fischer said Wednesday.
Speaking at the 12th annual Herzliya Conference, Fisher said. "In the short term, we have a strong, steady economy." "If there will be a large financial crisis in Europe," he warned, "we will need to be creative and strong and in my eyes we will be able to weather it."
Fischer also said the negative global growth forecasts from the International Monetary Fund are worrying. "Israel is very affected by this, and we do not know what the influence will be because we cannot predict if there will be a decline in output or a financial crisis."
Looking to Israel's labor market, Fischer warned that the quick growth and low employment rate among the haredi (ultra-Orthodox) population was not sustainable and "cannot continue." Arab Israelis would also have to be integrated into the workforce, he said.