Manufacturers' Association head predicts 'dire consequences' to the economy if demands are met.
By ZEV STUB843shraga brosh 88 298(photo credit: Manufacturers Association)
The coalition demands being made by parties vying for position in the newly-elected Knesset have a total value of more than NIS 10 billion, and could have disastrous effects on the economy if met, Manufacturers Association of Israel President and Federation of the Chambers of Commerce Chairman Shraga Brosh said Tuesday.
"This sum is equivalent to 1.5 percent of national production, and is completely out of proportion to the economy's capabilities," Brosh said Tuesday.
If Ehud Olmert tries to meet these demands, he believes the economy would revert to the recession state of 2002-2003 and foreign investors would lose their faith in the economy.
"There could be dire consequences if the government acts irresponsibly. It's enough to look at crisis fiscal mismanagement caused for the pension funds just three years ago," Brosh noted.
Among the costly demands being made are Labor's insistence that the minimum wage be raised by nearly one-third to $1,000 a month, which Brosh has said would increase layoffs of low-income workers and encourage companies to transfer production overseas.
The Gil Pensioners' Party revealed a set of demands Tuesday that include the cancellation of planned reductions in subsidies for the elderly, and doubling the annual addition to the health basket. Shas, among others, is demanding the return of higher child allowances.
Brosh called on the parties to act with responsibility to the nation and refrain from acting out of personal interests. He also noted that the country's budget deficit target must must remain within the framework approved by the previous government.
If the parties act outside this framework, the responsibility for the ensuing results on the economy would be on their heads, he said.
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