The Ministry of Finance is preparing for a mass outbreak of coronavirus in Israel. Ministry of Finance sources told "Globes" that the state would aid businesses afflicted with a cash crunch, such as El Al, but that the question of compensation would be discussed only later, after the extent of the damage becomes clear. Prime Minister Benjamin Netanyahu has given orders that at the current stage of the crisis, the supreme consideration in decision-making will be maintaining public health, not macroeconomic considerations. The main effort will be limiting the number of those infected, and the Ministry of Finance will concentrate on reducing the economic damage.
A special team from the Ministry of Health, the National Economic Council, and the Ministry of Finance will steer government policy in the crisis in order to limit the number of patients and infected people as much as possible. Behind the amalgamation of the teams lies an assessment that the coronavirus is about to spread in Israel, but the Ministry of Finance is emphasizing that as of now, these are "only preparations."
Among other things, the Ministry of Finance will attempt to estimate the effect of the economic measures on the financial system, including the Tel Aviv Stock Exchange, financial institutions, and other concerns.
The Ministry of Finance stated that the question of compensation will be discussed only at a later stage, when the extent of the damage becomes clear. At the same time, the Ministry of Finance is planning assistance for businesses that meet three cumulative criteria: providing an essential service, facing a threat to their continued existence, and doing everything possible to overcome the crisis by themselves. Even then, the Ministry of Finance made it clear that assistance would be given in order relieve a business's cash crunch, and according to uniform criteria.
The scenarios provided by the National Security Council refer to the number of patients, people infected, and those in isolation. The Ministry of Finance will try to use these to devise a reference scenario for assessing the effects of an outbreak of coronavirus on the economy. "As of now, isolating the entire economy is not being discussed, but it is clear that there is a difference between 5,000 patients and 500,000 patients," the Ministry of Finance said. The Ministry of Finance did not list the tools that it was preparing, but cited having hundreds of thousands of employees work from home as an example.
Up until now, two teams have operating in Israel: one from the National Security Council and the Ministry of Health, and an economic team founded ten days ago, headed by Ministry of Finance director general Shai Babad. The prime minister decided yesterday that the two teams would be combined, so that the Ministry of Finance could assess the economic significance of the planned measures. The Ministry of Finance explained that the macroeconomic effect of the measures taken to date was minor, but that the situation could change in the coming days.
Published by Globes, Israel business news - en.globes.co.il - on March 5, 2020
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