300 economists: Netanyahu, Smotrich don't see scale of crisis

• Published date: 30 October 2023

"You do not understand the magnitude of the economic crisis that Israel's economy is facing, you must act in a different way," the letter says

Among the signatories of the letter are Roni Hezekiah, former supervisor of banks and accountant general; Yair Avidan, former supervisor of banks; Professor Jacob Frenkel, former Bank of Israel Governor; Harvard University's Prof. Elhanan Helfman; Haim Shani, former Ministry of Finance director general; Prof. Josh Angrist, Nobel Prize winner in Economics; Professor Eugene Kendall, former chairman of the National Economic Council; Professor Manuel Trachtenberg, former chairman of the National Economic Council; Prof. Zvi Eckstein, former of the Bank of Israel Deputy Governor; Prof. Eitan Shashinsky from the Hebrew University; and Prof. Leo Leiderman from Tel Aviv University.

First step: stopping the transfer of coalition funds

In the letter, the economists called for an immediate halt to all activities 'that are not essential to the war effort'. The economists stressed that Israel is facing a major challenge: "The severe blow that has befallen the State of Israel requires a fundamental change in the order of national priorities and a massive diversion of budgets in favor of dealing with war damage, aid to victims, and rehabilitation of the economy. In our estimation, expected expenditure following the war will amount to tens of billions shekels."

The economists wrote that first and foremost coalition funds must be stopped, which so far has not been announced by any political entity about stopping them or diverting these funds to a more important activity, such as the reconstruction of the Gaza border region.

Netanyahu recently said that he instructed the Minister of Finance to 'put his hand in his pocket' and said he was in favor of increasing government spending. The letter apparently referred to this by noting that "cosmetic changes within the existing budget do not come close to the scale of the required spending. The government must face the...