Olmert, Histadrut, manufacturers plan stimulus package

One of the recommendations seeks to expand the loan fund proposed by the Finance Ministry from NIS 200 million to NIS 1 billion.

Ronnie Bar-On 88 248 (photo credit: Ariel Jerozolimski)
Ronnie Bar-On 88 248
(photo credit: Ariel Jerozolimski)
The Histadrut and the Israel Manufacturers' Association have lobbied for Prime Minister Ehud Olmert to advance an expansion of the economic stimulus plan without the cooperation of the Finance Ministry. "We have put forward a number of recommendations and the prime minister has promised us to intervene with the aim of formulating a proper solution within a week's time to avert a wave of layoffs," said Histadrut chairman Ofer Eini at the Globes Israel Business Conference in Tel Aviv on Monday. "In a place where there is no economic leadership, I hope that that the prime minister will take leadership." One of the recommendations seeks to expand the loan fund proposed by the Finance Ministry from NIS 200 million to NIS 1 billion, which can be leveraged to NIS 5b. Shraga Brosh, president of the Manufacturers Association, said that the Treasury's proposed NIS 200m. fund would only be able to serve 200 businesses. However, there are 350,000 small and medium-sized businesses employing over a million people, added Brosh. Earlier on Monday, the Knesset Finance Committee voted in favor of the Treasury's multi-billion economic and financial market stimulus plans. The Treasury's NIS 5b. economic stimulus plan entails massive investments in infrastructure in an effort to create thousands of jobs, while the NIS 6b. budgeted for the financial plan is aimed at increasing liquidity and providing more credit to the business sector. At the committee meeting Finance Minister Ronnie Bar-On promised to implement the government's pension safety net plan within three weeks. On Sunday the plan was approved by the cabinet. "The Knesset Finance Committee discussed a number of economic plans, which is good. The only problem is that these nice plans will require a couple of months to be implemented," said Eini. "They are not much help for struggling factories in the periphery who have to lay off employees, nor can they help avert the closure of factories tomorrow. What we need are immediate solutions to stem the wave of layoffs." During his address to the Globes conference, Bar-On was interrupted several times, heckled by factory workers from the Galilee and Negev. "You've destroyed the industry in the North and South. Thousands of people are losing their jobs because of you. You should be ashamed," yelled the demonstrators during Bar-On's speech. "I am here after attending a meeting of the Knesset Finance Committee, which has been delaying the vote for a month - a month that has been wasted," said Bar-On. "The financial crisis has reduced credit and hurt the sense of prosperity. This is one of the most severe, unique, and complex crises of all time. I must honestly admit that the ability of the Israeli economy to cope with the global crisis is wide-ranging and effective. "However, even in the most optimistic scenario, the Israeli economy will suffer a substantial slowdown in 2009. We will apply effective short-term tools, but we must also implement policies that will lay the foundation for rapid growth in the following years." Bar-On warned the public against falling buying into illusions or listening to those politicians, who on the eve of elections, promise that they have the formula to achieve near double-digit growth.