Bar-On: Crisis measures needed urgently

Senior officials to present limited safety-net plan for pensions today.

Ronnie Bar On 88 248 (photo credit: Ariel Jerozolimski)
Ronnie Bar On 88 248
(photo credit: Ariel Jerozolimski)
Finance Minister Ronnie Bar-On on Sunday reiterated his call for the immediate approval and fast implementation of proposed economic and financial measures to spur growth in the economy. The Treasury already sees the need for additional steps, he said. "In light of the deterioration of the global crisis, this government, even though it is a transitional government, must advance the approval and implementation of a number of steps to strengthen the economy," Bar-On said at the weekly cabinet meeting. "We have demanded the approval of a number of dramatic steps to catalyze economic growth, repair the market failure in the credit sector and support bondholders. These measures will work to cope with the root challenges of the crisis and most importantly protect the saving public. We need to let these measures operate, and fast." "This package of measures is not the final word," he said. "We are continuing to carefully watch the situation, and there is a high probability that we will need to add more measures to help the economy." Bar-On again called upon the Knesset Finance Committee not to make the mistake of making approval of the plans conditional on other plans. Last week, Knesset Finance Committee chairman Avishay Braverman locked the vote on the Treasury's economic-stimulus plan in the absence of an alternative pension-safety plan that was acceptable to all sides - the government, the business sector and the Bank of Israel. A group of senior officials from the Finance Ministry, the central bank and the Prime Minister's Office is expected to present a limited plan for a safety net for pension savings to Prime Minister Ehud Olmert, Bar-On and Bank of Israel Governor Stanley Fischer on Monday. The Treasury's NIS 5 billion economic-stimulus plan entails massive investments in infrastructure in an effort to create thousands of jobs. The NIS 6b. budgeted for the financial plan is aimed at increasing the availability of liquidity and to provide more credit to the business sector. "On this matter, I suggest not falling into the trap of populist slogans about helping tycoons," Bar-On said at the cabinet meeting. "Our measures strengthen bond holders opposite the tycoons. We improved the ability of good companies to deal with the credit crisis and improved the chances of debt repayment; all of this works for the good of the saving public." Uriel Lynn, president of the Federation of Israel Chambers of Commerce, on Sunday raised concerns over the credit situation of small and medium-sized businesses and the lack of government support as the economic stimulus plan was being held up by the pension-safety plan. He urged that the economic-stimulus plan be approved immediately. "We need to advance the approval of those parts of the plans on which all agree and thereafter deal with the approval of the pension safety plan for individual savers," Lynn said. "There is no such thing as a final plan. Every plan will need to undergo changes and adjustments as abroad. The credit crisis among small and medium-sized businesses is current, and therefore the solutions need to be immediate."