| Last updated at: (Beijing Time) Friday, November 16, 2001 |
Israel to Take Harsh Measures Against Economy Crisis: Sharon |
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Israeli Prime Minister Ariel Sharon warned Thursday night that the present poor state of the economy could result in cuts in the state budget and harsh economic measures for the coming year.
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Israeli Prime Minister Ariel Sharon warned Thursday night that the present poor state of the economy could result in cuts in the state budget and harsh economic measures for the coming year.
Addressing the Manufacturers Association of Israel, Sharon said: "there may be no other option but to reassess the government's expenses in the 2002 budget."
The prime minister said that he had discussed the issue over the past few days with Finance Minister Silvan Shalom, "and we promised ourselves that we will exercise that option if there would be a drop in salaries."
Sharon said that he had given three alternatives to the finance minister, and was waiting for the treasury's answer of which one it preferred.
The first alternative would be a substantial budget cut in order to preserve the deficit goals, he said.
"I will not hesitate to come to the Knesset (parliament) and demand that every private bill proposal, which had been accepted over the last two years, be postpone for one year," he added.
The prime minister noted that the second option would be a one- off exceeding of the deficit goal for 2002, and the third would be a combination of the first two measures.
Sharon said that Israel had found itself in an "economic state of emergency," and cautioned that 2002 would not be an easy year for the economy.
He also said that the government would need to take harsh measures that would most likely be unpopular. However, he said that the government would not raise taxes.
The prime minister also warned of worsening of the economic situation, and stressed that an expansion of next year's economy was impossible.
He called on ministers and Knesset members to ignore their personal interests in funding certain sectors, and the public workers to cease their strikes.
"Our first goal is to create more places of work, and we will make every effort to do so," he said.
According to the figures released by the Israeli Central Bureau of Statistics on Thursday, Israel's economy has suffered the sharpest contraction in the third quarter of this year since 1953, with its gross domestic product (GDP) fell by 2.8 percent.
Israeli tourism industry, the main foreign currency earner of the poor resource country, has shrunk by 51.1 percent in the third quarter and investments in the residential construction sector declined 17.6 percent in the first nine months of the year.
The latest figure shows that exports in the first nine months of the year fell by 12 percent.
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