Finance Minister Bar-On rejects Irish model proposal

His reasoning was that it would challenge the ministry's power and parliamentary democracy.

Ronnie Bar-On 88 224 (photo credit: Courtesy)
Ronnie Bar-On 88 224
(photo credit: Courtesy)
Finance Minister Ronnie Bar-On on Monday vigorously rebuffed a recent proposal to adopt the Irish model of governance in Israel, saying it would challenge the ministry's power and parliamentary democracy. He was responding to recent reports about proposals to establish, by legislation, a socioeconomic council in which three parties will have equal powers - representatives of the Histadrut, the Manufacturers Association of Israel and the government. "Now, at the height of economic activity, and despite the great number of challenges facing the Israeli economy and society, there are growing attempts to minimize the power of the Finance Ministry and to create alternatives, undermine the authority over the budget and challenge the fiscal policy we've created," Bar-On said at the Forbes Israel Conference in Ramat Gan, marking Israel's 60th anniversary. "I regret to say that I find the proposal to be utterly against the parliamentary democratic process. This is an attempt to change the method of governing the economy from one of democracy, in which the citizen has direct influence through the legislature, to another kind of regime in which the social order is dictated by 'brokers' of the trade unions and other sectors that do not necessarily represent the general public." According to the Irish model, the prime minister would head this council, which would deal with strategic planning and setting budget and macroeconomic policy, tax rates and all economic matters. In addition, the proposal suggests that the council would replace the governor of the Bank of Israel as an advisor to the prime minister. In response, Manufacturers Association of Israel president Shraga Brosh said the proposal to establish a socioeconomic council similar to the one in Ireland would not impose processes or policies. "The aim is to bring forward issues to the government in agreement, consultation and recommendation, and advance policies that are made in consensus and for the good of the economy and society in Israel as it is accepted in developed countries," he said. "The model will work to advance structural reforms such the education reform and the reform in the electricity market, which have been stuck in light of the current 'belligerence model.'" Brosh said the Irish model was successful in Ireland and other democratic countries such as Finland and Denmark. Bank of Israel Governor Stanley Fischer praised the Finance Ministry's efforts in confronting a slowdown in the world economy. "The Finance Ministry does not have an easy job at this time, in light of the pressures exerted to undertake weird and wonderful measures, which do not always contribute to the achievement of the policy goals," he said. "These pressures notwithstanding, the Ministry of Finance is adhering to the correct and prudent policy without yielding to demands for unproductive hyperactive steps." Fischer said the Israeli economy was presently confronting a very complex situation in light of a serious global financial crisis that was causing a significant slowdown in world trade and growth. "If we continue with the macroeconomic policy adopted in recent years," he said, "we can rest assured that the confidence in the economy of the business sectors in Israel and abroad and of Israeli households will be maintained. In that situation, Israeli and foreign investors will continue to invest in the economy, and households will continue to consume."