Opposition leader Binyamin Netanyahu of the Likud party called Monday for government intervention to protect Israel from an economic downslide. Speaking at a Likud conference in Tel Aviv, Netanyahu said, “A free market is not free of limits.”
A free market economy does not always require government intervention.
While a free market economy does not always require government intervention, the economy can reach “extreme situations” requiring the government to step in, Netanyahu said. “We're in a crisis right now, and we need effective policies.”
Netanyahu gave examples from his own political past, saying, “In 1996 and in 2003, we took action that led us to growth.” However, he implied that the current government would be incapable of taking such action, adding, “But those actions were taken after the government won the elections and was clearly stable.”
Experts have expressed confidence in the stability of Israel's financial institutions. Regulation has kept Israeli banks from some of the risky investment practices that led to the downfall of major United States institutions, they say. However, the affect of the crisis was clear on Monday as stocks on the Tel Aviv market continued to plummet, reaching their lowest point in more than two years.
European Union leaders are meeting in France this week to discuss the global financial situation and to attempt to calm investors. EU officials said leaders would consider giving financial aid to European banks in order to preserve economic stability.
The International Monetary Fund and the World Bank will hold their annual meetings next week, when they will discuss the global financial crisis. Bank of Israel Governor Dr. Stanley Fischer will head an Israeli delegation to the meeting.