If Israel’s economy is to bounce back after the corona crisis, the new government under Netanyahu, Blue and White leader Benny Gantz and the new finance minister must come up with a specific proposal
By JPOST EDITORIALPrime Minister Benjamin Netanyahu addresses the nation on the coronavirus outbreak, March 19, 2020(photo credit: AMOS BEN-GERSHOM/GPO)
Prime Minister Benjamin Netanyahu’s announcement of direct Passover grants to help Israelis get through this difficult period financially was welcome – but only a band-aid for the country’s devastated economy.Netanyahu said the government would be providing senior citizens with a gift of NIS 500 and families with NIS 500 per child up to four children.In the same address to the nation, Netanyahu promised that the government’s NIS 80 billion financial rescue plan would ensure that Israel’s economy does not collapse.“I want you to know that businesses and economies are collapsing around the world,” he said. “This is not unique to Israel, and in Israel I would say that the situation is better. We are capable of making these corrections, of presenting this assistance, because our economy is strong and we will see to it that it remains such.”Time will tell if Netanyahu is right. But the signs of the economic devastation caused by the coronavirus are concerning, to say the least. More than a million Israelis – almost a quarter of the country’s workforce – are now out of a job, and the National Insurance Institute forecast that this number will likely reach 1.1 million in the next month.So far, the hardest hit by the corona restrictions are unskilled workers (15.5%), and employees in education (13.9%), sales (9.4%) and hospitality (6.4%). But this is expected to expand to other sectors as well, including Israel’s prominent hi-tech industry.That is why the government needs, most urgently, to provide assistance to big and small businesses facing bankruptcy. Without businesses and jobs, many families and individuals will dip below the poverty line, and this cannot be allowed to happen. To prevent such a nightmare scenario, the government must expedite the application for business grants, making the process easy and free of bureaucracy.In unveiling the country’s NIS 80b. stimulus package on Tuesday, outgoing Finance Minister Moshe Kahlon boasted that it “is the largest and widest in scope that the Israeli economy has ever seen.” The package aims to offer a financial lifeline for struggling businesses, including low-interest loans, the cancellation of municipal taxes and tax rebates.But as The Jerusalem Post’s business reporter Eytan Halon noted in his analysis in Wednesday’s paper, “even with attractive terms, including repayment starting only next year, the recovery process is likely to take some time and many will be afraid that they will default on their loan.”Halon suggests that Israel learn from bigger economies, especially the United States, Germany and Britain. The $2.2-trillion US stimulus package unveiled last week offers unemployment benefits to the self-employed, independent contractors and gig workers, as well as providing the jobless with $600 per week for up to four months in addition to state benefits. The German stimulus package unveiled in March includes $660b. for business loans, while Britain announced a £330 b. ($410b.) loan scheme to help firms avoid collapse.
If Israel’s economy is to bounce back after the corona crisis, the new government under Netanyahu, Blue and White leader Benny Gantz and the new finance minister must come up with a specific proposal to bail out businesses struggling to stay afloat.As Yediot Ahronot's respected economic commentator Sever Plotzker wrote, “Israel’s coronavirus-infected economy needs a ‘ventilator’ on a comparable scale to the US or Germany, between NIS 150b. to NIS 200b.”The government’s current measures, like its corona policy in general, are steps in the right direction, but insufficient and not bold enough. We agree with Defense Minister Naftali Bennett that the cure for corona must not be worse than the disease itself, and the government must prepare to begin reopening the economy after Passover.“If we don’t manage the crisis properly, we may end up having more deaths from suicide than from coronavirus,” Bennett warned, urging the government not to close more businesses.Netanyahu and Bennett apparently disagree so deeply on this issue that Bennett’s Yamina party may find itself outside of the new coalition. But without getting into the politics of it, Bennett’s call might be right.The casualties of the coronavirus are tragic enough; we can’t let it hurt Israel’s economy that has, until now, been a shining example to the world.
