1 August 12 14:20–The Ministry of Finance rushed to pass the package of spending cuts and tax rises in order to avert an imminent downgrade of Israel’s credit rating, Minister of Finance Yuval Steinitz reveals in an interview with “Globes” editor-in-chief Hagai Golan on the Globes TV “Face to Face” program.
“It was vital to do it now, otherwise interest rates in Israel would have risen, we would have paid billions next year at the expense of other things, and within a few weeks our credit rating would have fallen,” Steinitz says in the interview. “If, heaven forbid, we display irresponsibility and start to fall, since everyone knows that we have no safety net no Ben Bernanke of Mario Draghi who can give us billions of dollars or euro as to Greece and Spain – our fall could be much faster.”
Then the main reason for the steps that were taken was the fear of a downgrade of Israel’s credit rating on international markets by the rating agencies.
“Certainly… so that what happened to Spain won’t happen to us. Spain’s crash started with them setting a deficit target, and the Spanish government and parliament failing to approve the measures designed to meet the target.”
Why didn’t you go for abolition of exemptions? We know that every year there are NIS 40 billion hiding in all kinds of places.
“You know my position. I am in favor of abolishing the exemption from VAT for fresh produce. It creates a lot of black money around it, a huge amount of tax evasion. I wanted to cancel it. Unfortunately, this is one of the few things I wanted to promote and didn’t succeed in.”…Read More>>