No coincidence. Netanyahu
Photo: Alex Kolomoisky
Netanyahu's economic troubles
Op-ed: PM Netanyahu wants early election because Israeli economy about to hit a downturn
When he was Israel's finance minister, Benjamin Netanyahu took pride in his achievements, and mostly in extracting our economy from the "high-tech bubble" crisis, which started in the United States and spread worldwide.
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The most interesting move undertaken by "the former Netanyahu" was changing the way children allowances were paid.
Until then, the fourth child and beyond would "receive" a much greater allowance than the first child in the family. This was the result of secular parties caving in to pressure by haredi parties. Yet then came Netanyahu, with the analogy of a slim man carrying a fat man on his back, and said that all children should be treated equally. Later on, he boasted that within a year he managed to dramatically reduce the birthrate of Bedouins in the Negev.
However, after retiring from the post of finance minister in 2005, Netanyahu came back three years ago as prime minister, and restored the previous allowances model. He did not restore it fully, yet the old principles were reintroduced. That's what Bibi is like.
The public still perceives Bibi as the one who salvaged our economy. Yet the statistics, despicably enough, do not support this claim. Netanyahu took up the post of finance minister in the spring of 2003. Today we know with certainty that the shift from recession to economic acceleration began much before Netanyahu had time to do something as finance minister. His predecessor, Silvan Shalom, complains that Netanyahu used excellent PR to steal the glory.
And this brings us to the present. It is no coincidence that the prime minister seeks to proceed quickly with elections for the next Knesset. Almost all the economic data point to a negative shift. This week, the Central Bureau of Statistics released information regarding the rise in unemployment. What's more important than the rise, in and of itself, is the speed of this increase.
Austerity plan in cards
Public accounts appear to be on the verge of spinning out of control. The finance minister admitted this week at the Knesset's Finance Committee that the government has significantly deviated from its deficit target (the figures seem smaller when using percentages…)
Tax cuts further hinder the government's ability to fulfill its obligations. The public debt grew by tens of billions of shekels (and therefore this figure too is presented using percentages.) Meanwhile, the government has failed to adhere to its decision to curb the scope of poverty.
Yet the gravest development may be Israel's shift from a state with a foreign trade surplus to a trade deficit. The ongoing encouragement of imports (through an exchange rate that makes the dollar cheaper) further hurts our exports.
And so, we are seeing the accumulation of economic events that will clearly prompt an austerity plan in the coming year. This plan would be forced upon us because of the grave state of affairs, just like in Greece and Spain, even if not to the same extent.
The earlier the elections will be held, the greater the chance that not everyone will notice the scope of the hole that Netanyahu's economic policy dug here. It's a matter of such grave concern that they are even arguing whether the elections will be held in September or October, because every day exposes yet another economic pothole.
