Prime Minister Benjamin Netanyahu and Finance Minister Israel Katz on Wednesday announced a plan to distribute hundreds of dollars in grants to every Israeli in order to stimulate the country's sagging economy, days after thousands of people took to the streets to protest his handling of the coronavirus crisis.
Under Netanyahu's plan, individuals and households without children will receive one-time payments of just over $200, while families will receive roughly $600 to $900 depending on how many children they have. He said he hoped the money would reach people in a matter of days.
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Netanyahu said, "We need to get the economy moving and so we are giving out this money. People are sitting at home and not spending and we want to encourage consumption. If people spend then businesses will employ people. This money will encourage consumption and encourage employment. It will move the wheels of the economy that's how economics works. I tell you by the way, buy goods made in Israel. Blue and white. Use this money to get the wheels turning.
"Once the plan is approved. Israeli citizens will receive the money within a few days through a mechanism from the National Insurance Institute. But it has to be passed. I'm sure I'll get the support of the other ministers but it's not clear whether we need to put it through legislation. I'll seek ways to bypass that because it takes time but if it comes to legislation - I expect all the factions in the Knesset to support the law so that we can transfer the money quickly. If we start arguing about criteria, it will take a lot of time."
In a nationally televised news conference, Netanyahu lashed out at violent tactics used by some protesters and said his decision was not connected with the unrest. Instead, he said he was aiming to jump-start the economy when the country is in the midst of a global crisis.
"I hear your distress. You're not alone," he said.
Israeli media said professionals in Israel's Finance Ministry opposed the proposal, which still requires government approval, because it does not differentiate between the struggling and the well-off.
Bank of Israel Governor Prof. Amir Yaron, however, told Army Radio on Thursday that he learned about the plan from the media.
Criticizing the outline, Yaron said, "It's more important to help those in real need."
Labor leader and Economy Minister Amir Peretz also criticized Netanyahu's plan, telling Israel Radio that Netanyahu and Katz "didn't consult anyone. The government will debate this [plan] on Sunday and we'll see if we roll it out as-is. We have to set certain priorities but I certainly won't oppose a plan that improves the public's [financial] situation."
Asked about whether he had faith in Netanyahu at this time, Peretz said, "None of us is in love with the government we [the coalition partners] are in."
Netanyahu was widely praised for his actions early in the coronavirus crisis. He moved quickly to seal the country's borders and impose lockdown restrictions to contain the outbreak.
But after reopening the economy in May, it appears he declared victory too early and there has been a sharp spike in infections. At the same time, unemployment has surged to over 20% while Netanyahu's popularity has plummeted.
Officials have warned they may have to reimpose a wide-scale lockdown in the coming days, raising concerns of further economic distress.
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