The scurrying and scuttling behind David Klein's appointment as Governor of the Bank of Israel, and the widespread opposition to his candidacy in the cabinet should teach Prime Minister Prime Minister Ehud Barak, rather than Klein, a lesson. A worst-case scenario took place in full view of the country, in which most government ministers expressed a lack of confidence by varying degrees in the way Barak handled the appointment of the Governor.
The Bank of Israel suffered the most damage from the affair. If someone had tried to develop a conspiracy theory that Barak had actively sought to harm the Bank of Israel's independence, he would have had plenty of evidence to support it. Barak's entire handling of the matter looked like an invitation for political interference by ministers and Knesset members on the Bank of Israel.
There is, of course, no way of knowing whether political pressure will increase following today's cabinet meeting, but it was Barak who opened the door to it by his behavior. Over-containment and under-transparency characterized the entire process from beginning to end.
Initially, Barak said he was looking for a Frenkel duplicate. He could easily have presented Klein as a candidate, consulting with ministers and explaining his considerations. Instead, the Prime Minister preferred, as usual, to shroud the matter in secrecy, and explain through the ploy of leaks the considerations which led him not to choose a candidate too close to Minister of Finance Minister of Finance Avraham Shochat.
Barak has apparently not learned that managing economic policy requires maximum transparency and political cooperation, and this includes the personality aspects, in order to reduce pockets of opposition and land mines of the sort which exploded today. David Klein deserved better treatment than that metered out to him by the Prime Minister.
Published by Israel's Business Arena on January 16, 2000