Netanyahu: Gov't to give NIS 4b. to businesses hurt by coronavirus

The prime minister said coronavirus is a “global epidemic” even if it has not been officially declared as such. He said Israel is doing a good job handling the crisis.

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)
The government will set aside funds to compensate businesses losing money due to the outbreak of the novel coronavirus, Prime Minister Benjamin Netanyahu said at the opening of the cabinet meeting on Sunday.
“We will establish an aid fund of NIS 4 billion, which will help companies that were economically affected by the spread of the virus,” he said.
The coronavirus is a “global epidemic,” even if it has not been officially declared as such, Netanyahu said. Israel is doing a good job handling the crisis, he added.
“We are acting responsibly, calmly and in cooperation with all relevant parties,” Netanyahu said. “I have a discussion on the matter every day and a few times on most days. Due to the steps we initiated, I can say that Israel’s situation is under control and is among the best in the world, if not the best among Western countries.”
The Finance Ministry said it would open a special track for struggling companies to receive support from the State Guarantee Fund for Small Businesses, offering government-backed loans totaling NIS 2b. to bridge cash-flow gaps and reducing the time required for banks to provide credit approval to nine working days.
Speaking after a meeting with high-level finance officials and regulators, including Bank of Israel Governor Amir Yaron and Accountant-General Rony Hizkiyahu, Finance Minister Moshe Kahlon said a variety of tools would be used to ensure the Israeli economy remains strong while contending with the outbreak of the virus.
“There is no doubt that the fact that the global coronavirus crisis meets Israel with a strong economy, low unemployment, a high credit rating and a declining debt-to-GDP ratio will help our ability to overcome it while minimizing the damage to the Israeli economy,” Kahlon said.
Among the Israeli companies in difficulty is flag carrier El Al, which said in a filing to the Tel Aviv Stock Exchange on Sunday that it expects revenues to plunge by $140 million-$160m. between January and April due to the coronavirus outbreak.
The increased cut in revenues follows a significant drop in consumer demand and shrinking operations due to increasingly strict restrictions on travel imposed by the Health Ministry.
Reduced operational costs will offset some of the declining revenues, according to revised estimates issued by the company, with total damage estimated to reach $70m.-$90m. by the end of April.
Talks with the Finance Ministry to request financial support from the government are ongoing, El Al said, adding that it is taking operational and financial measures to reduce expenditure.
Last week, El Al announced its intention to lay off 1,000 permanent and temporary staff – almost one-sixth of its workforce – as it rolled out a series of cost-cutting measures implemented to “ensure the future” of the company. In addition, company executives and directors will be subject to a 20% wage cut, effective retroactively from March 1.
“Naturally, this is an evolving event outside of the control of the company,” El Al said in a statement. “Factors including the continued spread or stopping of the virus, decisions by countries and relevant authorities in Israel and abroad to stop or resume flights to different destinations, setting guidelines with regard to different destinations, or changes in demand, are likely to affect the company.”
The Israel Airports Authority also announced Sunday that 70% of its temporary workers would go on unpaid leave. To reduce the impact on workers’ families, unmarried employees would be put on leave before married staff, it said. Security staff at the authority’s airports and land-to-land border terminals also would be reduced to 150 employees, it said.
Additional measures include the cancellation of training courses and halting the recruitment of temporary staff expected to return to work ahead of the busy summer season.
Given the reduced amount of air traffic, all international flights to and from Ben-Gurion Airport will operate from Terminal 3. From March 14 to the end of April, Terminal 1 will close to international flights but will remain open for domestic travel, the Israel Airports Authority said.
Netanyahu also warned against the spread of “fake news” that is “sowing panic” about the virus.
“Only listen to official notices from the Health Ministry and official sources,” he said, adding that the instructions “are not a joke and are not a matter of choice.”
Netanyahu said he had spoken to many world leaders over the past 72 hours, and he initiated a conference call with them for later this week.
“Israel has what to offer to the world and what to accept,” he said.
Netanyahu reiterated some of the steps the government is taking in response to the outbreak, including sanitizing public facilities, using the IAF to ensure necessary supplies reach the market and using “the best minds in Israel” to separate healthy people from sick ones.
The government is also seeking ways to increase the number of people being tested for coronavirus and decrease the time it takes to get results.
Health Minister Ya’acov Litzman warned upon entering the cabinet meeting that his office might announce “major steps” later Sunday.
Education Minister Rafi Peretz said his office was prepared for any scenario and is working with the Health Ministry. He also refuted online rumors that schools are going to be closed down in the coming days, saying information should only come from Education Ministry releases.
“We are accompanying students in isolation with remote learning,” Peretz said. “We are all hopeful and praying that this will all be behind us soon. But until then, it is important to take all precautions.”