The tension between the Ministry of Finance and the Ministry of Industry, Trade and Labor has deepened over the dispute regarding the grant for the expansion of Intel Corporation (Nasdaq: INTC) operations in Israel. "Globes" was the first to reveal yesterday details of the dispute.
Minister of Industry, Trade and Labor Shalom Simhon has severely criticized Minister of Finance Yuval Steinitz for opening secret talks with Intel and for his conduct in offering the US computer chip giant an improved package to expand investment in Israel, while bypassing the professional bodies at the Ministry of Industry, Trade and Labor.
In a letter sent to Steinitz, Simhon wrote, "The importance of the grant is clear to all of us but we must be wary of any impulse which is expressed by making improved offers without the opinion of the professional bodies dealing with the matter and contradicting every basis concerning the economic situation of the state of Israel. This conduct has done damage to Israel's image and presents an Israeli government in which the right hand does not know what the left hand is doing."
Simhon continued in his letter, "As the minister responsible for employment, I think that the cancellation of making the establishment of a plant in the north dependent on the grant will do huge damage to the region, which needs the oxygen that Intel would breathe into it. There is no dispute about the contribution of the company to the State of Israel but the continuation of grants is not unlimited. I see the offer (the offer of NIS 1 billion that an inter-ministerial team passed onto Intel for developing the plant in Kiryat Gat and opening a plant in Bet Shean Y.A.) as reflecting what can and should be given to the company. Moreover, the Ministry of Industry, Trade and Labor will find excellent ways to use the other grant's funds as part of its role to raise the employment rate and develop Israeli high tech through the Chief Scientist's grants."
Published by Globes [online], Israel business news - www.globes-online.com - on May 23, 2012
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