Government readies for economic crisis

Olmert, Ronnie Bar-On confirm plans for economic aid package to cope; PM: Don't let hysteria reign.

Bar-On 248.88 (photo credit: Ariel Jerozolimski)
Bar-On 248.88
(photo credit: Ariel Jerozolimski)
Prime Minister Ehud Olmert and Finance Minister Ronnie Bar-On confirmed on Wednesday that the government was preparing an economic aid package to help the economy cope with a crisis. "Together with the finance minister and the Bank of Israel governor we are putting together a package of economic measures for a crisis. We are not yet there, but we will have the measures necessary to cope with a crisis," said Olmert at the Prime Minister's Conference for Export and International Cooperation in Jerusalem on Wednesday. "The Israeli economy is entering the global crisis in a much better and stable situation than it was ever before. So I suggest we don't let unnecessary hysteria reign," he added. Olmert said that the government would implement measures to enable the export sector to be competitive in an effort to secure its level of productivity and profitability. In reaction to the wave of layoffs in the economy in recent weeks, Olmert urged employers to think twice before they cut their work force. "I suggest you think about your employees as your financial assets," said Olmert. "Nothing is as important as human capital and the Israeli employee. The damage in the long-term could be much greater than the immediate benefit of a reduced number of employees." Rebuffing recent calls for immediate government intervention as populistic and stemming from political interest, Bar-On said that the Treasury was putting together a set of measures to help the Israeli economy cope with the global crisis with minimum damage. "I will not let the man on the street pay the price of pressure from political interest groups or from those who see in this crisis an opportunity to improve their political position," said Bar-On. "I know that I am bound to pay a heavy public and political price by not giving in to the pressure, but I am ready to deal with the consequences and pay the price." Bar-On added that the ministry was working on a dynamic plan of action which would serve as a platform to add measures should they become necessary. Part of the package includes measures to expand credit sources and the availability of credit to the private sector. The ministry will put an emphasis on providing early credit solutions for small and medium-sized businesses, who will find it harder to deal with the global crisis on their own than large enterprises. "Furthermore we are acting to present a number of regulatory steps, led by the Finance Ministry and the Israel Securities Authority, which will strengthen the Israeli capital market and increase the protection of the investor public and savers," said Bar-On.