'A total lockdown would've resulted in 3 million unemployed'

Outgoing Director-General of Ministry of Finance acknowledges error in how the economic crisis at the start of the pandemic was handled.

Arutz Sheva Staff ,

Shai Babad
Shai Babad
Yonatan Sindel/Flash 90

Shai Babad, the outgoing Director-General of the Ministry of Finance, acknowledged in an interview with Channel 12 News on Wednesday that the State of Israel and the Ministry of Finance erred in the way they dealt with the economic crisis at the beginning of the coronavirus pandemic.

"I understand the anger and frustration of the self-employed, we miscalculated some of the steps we took," Babad said.

He recalled how he warned Prime Minister Binyamin Netanyahu of the possibility of a financial collapse.

"Had we gone for a full lockdown and had imposed that same full lockdown that the Ministry of Health was pushing for and [Health Ministry Director-General Moshe] Bar Siman Tov was pushing for, we definitely would not have had a million unemployed - we would have had twice as many or three times as many as that and we would be in a completely different place. Even today, the mechanisms of compensation the government is providing are not enough,” said Babad.

"The self-employed are right in all of their claims. I do not know how to bring the situation back to what it was before and bring them back to where they were on the eve of the coronavirus pandemic, and it doesn’t matter what compensation I give them. I do not know how to give this much compensation."

Babad also responded to the claims that the aid package drafted by the Treasury included problematic criteria that caused many self-employed people to fall through the cracks.

"I fully agree, in the first phase, the criteria we formulated were incorrect and inappropriate. It's not like we had a coronavirus combat doctrine that we came and said, ‘We know what it does, we know what it is like to shut down 30 percent of the Israeli economy because we have done it 10 times in the past."

"We did not understand the magnitude of the damage that was caused and when we realized that we corrected it since we, too, were new to it. We saw the forecasts of what will happen to the deficit and what will happen to the debt-to-GDP ratio and how much money we have to raise, and in the end we have to protect the Treasury,” Babad concluded.