'Emergency situation requires emergency measures'

Steinitz defends proposal for two-year budget.

Yuval Steinitz flowers 88 248 (photo credit: Ariel Jerozolimski)
Yuval Steinitz flowers 88 248
(photo credit: Ariel Jerozolimski)
Despite fierce opposition, the Knesset was expected to pass a proposal for a two-year budget structure for the years 2009-2010 in second and third (final) readings late Monday night. "We are in an extraordinary emergency situation that requires extraordinary emergency measures," Finance Minister Yuval Steinitz, the initiator of the proposal, said Monday. "This is the first time in the history of State of Israel that an incoming finance minister is faced with a budget deficit of NIS 40 billion, of which the lion's share is a byproduct of th"It is a foolish move that unveils the true intent of the government, which is to preserve itself, regardless of the cost to the economy," former finance minister Ronnie Bar-On said. "There is no person in the political and financial establishment of Israel who can foresee the needs of the country in 2010. This is a hasty and erroneous move to push through major changes in the disguise of economic issues, which will greatly harm the Knesset's ability to fulfill its role in supervising the government." Steinitz rebuffed the criticism, saying: "There are experts who disagree over the need for a two-year budget structure. But there is a decisive majority among academic experts and the Finance Ministry who believe that in the special situation that has arisen there is no alternative and no other way out other than this measure." Separately, Prime Minister Binyamin Netanyahu, who is also minister for economic strategy, on Monday convened the first meeting of the roundtable forum for dealing with the economic crisis, together with Steinitz, Defense Minister Ehud Barak, Histadrut Labor Federation chairman Ofer Eini and Israel Manufacturers Association president Shraga Brosh. "The forum was formed in Labor's coalition talks for dialogue between the government, the Histadrut and employers," Netanyahu said. "We are facing a big test: to help citizens of Israel to keep their jobs. This is a global challenge. "We are committed to the workers of Israel and to prevent unemployment. We can do this much better if we do it together. We will intensify cooperation immediately after Pessah... This spirit of partnership will help us save the economy from crisis." Steinitz said the Histadrut and employers have proved they put the good of the country first. Speaking at a press briefing earlier on Monday, Netanyahu said the government would this year present a plan to reduce taxes. But the question over the timing of implementation of the tax cuts remained open. He said the government would not freeze or cut public-sector wages without an agreement with the Histadrut. Gil Hoffman contributed to this report.