Netanyahu: Government to provide NIS 10b. package to assist economy

The financial package is an extension of an NIS 4b. loan fund for affected businesses that was announced by Netanyahu at a cabinet meeting on Sunday, and could be extended further if necessary.

By EYTAN HALON
Prime Minister Benjamin Netanyahu recommends Israelis use the namaste greeting to avoid contracting coronavirus at a press conference in Jerusalem on March 4 (photo credit: MARC ISRAEL SELLEM)
Prime Minister Benjamin Netanyahu recommends Israelis use the namaste greeting to avoid contracting coronavirus at a press conference in Jerusalem on March 4
(photo credit: MARC ISRAEL SELLEM)
The government will supply NIS 10 billion ($2.81b.) in “first aid” to assist the Israeli economy in overcoming the impact of the novel coronavirus outbreak, Prime Minister Benjamin Netanyahu said Wednesday.
The funds will be provided in the form of loans to businesses, a cash injection into the healthcare system and other essential services.
“We are following developments closely, and the coronavirus has had a great economic impact on the global and Israeli economy,” Netanyahu said at a press conference, emphasizing that Israel has entered the crisis with a strong economy and low unemployment. “Our program is to enable continued operation of the economy. We are doing it with an immediate package of NIS 10 billion,” he said.
The financial package represents an extension of a NIS 4b. loan fund for affected businesses that was announced by Netanyahu at a cabinet meeting on Sunday. It could be extended further if necessary.
An additional NIS 4b. ($1.13b.) will be on offer to businesses in the form of low-interest loans, NIS 1b. ($280m.) will be supplied to strengthen the healthcare system, and a final NIS 1b. ($280m.) will focus on “special needs” – bolstering services, including the Israel Police, Fire and Rescue Services and the Prisons Service.
Financial support for the struggling aviation industry, including flagship carrier El Al and airlines Israir and Arkia, will be provided separately from the aid package, Netanyahu said.
El Al is planning to place 80% of its 6,300 employees on unpaid leave as revenues drop amid the coronavirus outbreak, Israeli media reported. Some 600 of the airline’s 650 pilots are among the 4,000 employees expected to be placed on leave by the company, Channel 12 reported. A representative for the company declined to comment.
Ahead of the cuts, expected to take place in the coming days, the Israeli Employment Service said it would offer a range of professional training courses and alternative employment opportunities to El Al employees.
In a filing to the Tel Aviv Stock Exchange on Wednesday, El Al said the extension of self-quarantine requirements to all individuals arriving in Israel was expected to have a “fundamentally adverse effect” on the company’s operations.
Prior to blanket quarantine requirements introduced by the government on Monday, El Al said it expected revenues between January and April to drop by $140m.-$160m. The airline said it is now unable to estimate the extent of the damage. El Al said it would continue to make “operational and commercial adjustments” to its operations based on demand, adding that it would likely cancel many flights.
Businesses applying for loans should be able to receive assistance within seven to nine days, Finance Minister Moshe Kahlon said.
“We are in a difficult period,” he said. “The economy is in a difficult period, an incident unlikely any other we have known in the past. All the authorities have their hands on the steering wheel, and we are in control of the situation.”
Kahlon hinted at additional measures likely to be introduced early next week, including steps to strengthen the National Insurance Institute, which is tasked with assisting the elderly and the growing number of workers laid off or placed on unpaid leave.
Responding to Netanyahu’s announcement, Israel Incoming Tour Operators Association director-general Yossi Fattal said prioritizing financial assistance to the aviation industry would be a mistake if incoming tourism operators are not taken into account.
“Without us, the plan to save the aviation industry would be incomplete,” he said. “We should be among the top priorities because without us, there will be no tourists for planes and hotels.”
In a joint statement, Histadrut labor federation chairman Arnon Bar-David and Presidium of Israeli Business Organizations acting chairman Dubi Amitai said Netanyahu’s proposal brought “no news that will help save the economy.” Offering loans does not provide a “real solution for businesses currently collapsing,” they said.
“The economy needs oxygen, not chatter about oxygen,” their statement said. “What is needed from the state is to flow money into struggling companies and industries and not waste time on the theory. Workers and businesses are the growth engine of the domestic economy, and it is prohibited to gamble on their fate.”
Bar-David said an agreement between El Al employees and management was very close after late-night negotiations on Tuesday, which were expected to continue late into Wednesday night.
“Company employees are paying from their pockets, but out of a belief that El Al is their home,” he said. “I urge the Finance Ministry to quickly present a rescue package for the company in recognition of the fact that El Al is a strategic asset to the Israeli economy.”