Israel's economic assistance plan met with skepticism, anger
Attorney-General Avichai Mandelblit warned that discussing such a plan was inappropriate during election season.
By ZEV STUBIsraeli Prime Minister Benjamin Netanyahu sits next to foreign minister Israel Katz during a cabinet meeting(photo credit: REUTERS)
Critics are extremely skeptical of the massive economic assistance plan announced Sunday night by Prime Minister Benjamin Netanyahu and Finance Minister Israel Katz.The political motivation behind such a presentation two months before elections, as well as the legality and feasibility of actually implementing such a plan, are being questioned.Economists at Israel’s largest banks declined to discuss the plan’s impact, saying they wanted to wait and see how things develop before they comment.The plan would offer household grants to families of up to NIS 750 per adult and NIS 500 per child, along with wide-ranging benefits to businesses and unemployed workers affected by the coronavirus pandemic.A day after the announcement, no new details had been released beyond the bullet points of the nine-point plan that Katz presented on a screen as he spoke.However, problems with the plan became clear even before it was revealed. Attorney-General Avichai Mandelblit warned Netanyahu and Katz before the presentation that discussing such a plan during an election season was inappropriate, a message that was ignored and even mocked by Netanyahu in his speech.“Is this election economics because it helps Israeli citizens?” he asked. “Maybe the attorney-general wants to tell me how many vaccines I can bring? It would not occur to us to harm the health or livelihoods of our citizens because of elections.”But Mandelblit’s warning was not the only one to be ignored. Officials in the Finance Ministry and the Bank of Israel said they had not been informed about the plan until they heard about it in the media minutes before the press conference. Under normal circumstances, such a plan would undergo extensive deliberations before being announced.Following the presentation, the National Insurance Institute, which would be responsible for providing most of the benefits to citizens, said it had no further details beyond what was published.It is widely believed that the plan would be impossible to approve and implement due to its high cost and the bureaucratic and legal issues of specific items.The plan was condemned by Netanyahu’s political rivals across the spectrum.“There is a name for the economic plan that Israel needs: a state budget,” Blue and White chairman Benny Gantz said.Other political leaders accused Netanyahu of a PR stunt, lying and being responsible for Israel’s worst economic crisis in history.“At the time when you actually could have done all these beautiful things, you chose not to pass the budget and prevented everything,” Yamina chairman Naftali Bennett said.Israel’s fourth election in two years, scheduled for March 23, was forced on the country when the Knesset failed to pass a state budget by the December 23 deadline. Netanyahu’s inability to reach an agreement with Gantz, his main coalition partner, is widely seen as an unacceptable reason for yet another costly election season during the coronavirus crisis.Regarding the funding of the plan, Netanyahu seemed to indicate that he expected Israel to raise the money on the debt market. In his speech, he compared the program to US President Joe Biden’s $1.9 trillion economic plan, which would cost 8.6% of GDP. That ratio would correspond to NIS 122 billion for Israel, the prime minister said.Netanyahu quoted US Treasury Secretary-designate Janet Yellen as saying when interest rates are at an all-time low and you can borrow a lot of money at a very low price, “the smartest thing we can do is act big.”
Related TagsIsrael KatzMoneyeconomics
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