Israel’s Bank Chief Fischer Warns of European Collapse and Lehman 2.0

August 1, 2012 10:09 am 1 comment

Stanley Fischer, Governor of the Central Bank of Israel. Photo: wiki commons.

In a bleak overview of the global economy, Stanley Fischer of the Bank of Israel, told his country’s parliament on Wednesday that Europe’s economy could collapse, a second Lehman Brothers style event could take place, and Israel must be prepare itself to deal with these possibilities.

“Either Europe will deal with it, or it will collapse and countries will begin to quit,” Fischer, who serves as the Governor of Israel’s Central Bank told the Knesset Finance Committee on Wednesday.  “That could happen. We cannot know what will happen in the second case; it may be accompanied by a financial crisis. Some people are talking about Lehman Brothers II. I don’t know. The only thing I do know is that I don’t know. We must therefore prepare. The economy must be ready in advance, not afterwards. We must maintain financial stability, as well as fiscal stability and the budget.”

Fischer cited lackluster U.S. growth forecasts and European financial problems as two reasons why Israeli exports will suffer in the near term.

“We see growth forecasts for the US of just 2%. Europe is in a recession, and there will be very weak recovery next year,” he said.  “Emerging markets are in slightly better shape. Global trade is growing, but slowly. Our exports will be weak next year, and for several years after that.”

Fischer also spent time during his speech to the Knesset Finance Committee urging lawmakers to keep a watchful eye on Israel’s deficit, noting that continued government spending at the current rate, without tax increases, would lead to problems in the future.

“The 2013 deficit will reach 4.5% of GDP if we keep all the spending, but do not raise taxes. We’ll have a deficit of 6.5% of GDP if we don’t raise taxes and we don’t deal with the spending side. A deficit of 6% of GDP with 3% growth is a situation of structural deficit,” Fischer stated.

“The response must come now, when there is no recession here and there is growth.”

1 Comment

  • “Stanley Fischer is one of the smartest people on the planet, listen to everything he says, read everything he writes” Robert Rubin former Treasury secretary & senior executive Citigroup

Leave a Reply

Please note: comments may be published in the Algemeiner print edition.


Current day month ye@r *

More...

  • Arts and Culture Theater US & Canada New Play Explores the ‘Arrogance’ of American Jews Critical of Israel, Playwright Says

    New Play Explores the ‘Arrogance’ of American Jews Critical of Israel, Playwright Says

    In his new play Mr. Goldberg Goes to Tel Aviv, playwright Oren Safdie tackles an issue that he has a major concern with: the relationship between Israelis and left-leaning Diaspora Jews with their “I know better” critical views. At the heart of the one-act play is Tony, a Jewish and gay Palestinian sympathizer who expresses strong anti-Israel sentiments when the play begins and at one point even sides with a Palestinian terrorist who holds his captive. Tony, who is also an [...]

    Read more →
  • Music US & Canada Hassidic Parody of Taylor Swift Song Apes Long Jewish Holidays (VIDEO)

    Hassidic Parody of Taylor Swift Song Apes Long Jewish Holidays (VIDEO)

    A Jewish comedy troupe released a parody video on Wednesday of Taylor Swift’s hit song Shake It Off in which they joke about taking extensive time off from work for Jewish holidays. “And the goyim gonna stay, stay, stay, stay, stay. And the Jews are gonna pray, pray pray, pray, pray. I’m just gonna take, take, take, take, take. I’m taking off,” goes the chorus for I’m Taking Off. Menachem Weinstein, the video’s lead singer, is the creative director at [...]

    Read more →
  • Arts and Culture Jewish Literature On 75th Anniversary, Looking at the Jewish Influence on Gone With the Wind

    On 75th Anniversary, Looking at the Jewish Influence on Gone With the Wind

    JNS.org – The 75th anniversary of the premiere of “Gone with the Wind” on Dec. 15 presents an opportunity to examine the Jewish influence on one of the most popular films of all time. That influence starts with the American Civil War epic’s famed producer, David O. Selznick. Adjusted for inflation, “Gone with the Wind” remains the highest-grossing movie ever made. It earned the 1939 Academy Award for Best Picture, the same honor another Selznick film, “Rebecca,” garnered in 1940. Selznick [...]

    Read more →
  • Featured Music US & Canada EXCLUSIVE: Matisyahu Provides Most Extensive Analysis Yet of His Religious, Musical Evolution (INTERVIEW)

    EXCLUSIVE: Matisyahu Provides Most Extensive Analysis Yet of His Religious, Musical Evolution (INTERVIEW)

    Matisyahu got candid in an exclusive interview with The Algemeiner on Monday about his religious and musical journey – after shedding his Chassidic skin, yarmulke, long beard and all – from the start of his career in 2005 when he became a reggae superstar with hits King Without a Crown and Jerusalem. The singer-songwriter embarks on his Festival of Light tour this month, an annual Hanukkah event that stops in Montreal, New York, and other cities before ending in San Juan, [...]

    Read more →
  • Arts and Culture Personalities ‘Sheriff of Mars’ Unveils Endearing Life of Jewish Music Star Hidden in the Fields of France

    ‘Sheriff of Mars’ Unveils Endearing Life of Jewish Music Star Hidden in the Fields of France

    JNS.org – It was an era of steel strings, guitar heroes, and storytellers—high on heroin, rebellious. Outlaw country music, the hallmark of Nashville’s powerful and angry music scene of the 1970s, was the brew of greats such as Johnny Cash, Willie Nelson, and Townes Van Zandt. But there is another, little-known music hero of that era: Daniel Antopolsky. A Jewish lad from Augusta, Ga.—the son of immigrants who settled in the south and ran a hardware store on Main Street—the [...]

    Read more →
  • Arts and Culture US & Canada Iranian Actress Replaces Israel’s Gal Gadot for ‘Ben-Hur’ Remake

    Iranian Actress Replaces Israel’s Gal Gadot for ‘Ben-Hur’ Remake

    Iranian actress Nazanin Boniadi replaced Israeli star Gal Gadot as the female lead in the new Ben-Hur remake, Hollywood.com reported on Tuesday. The Homeland actress will play Esther, a slave that Ben-Hur sets free and falls in love with. Gadot quit the movie when it became clear that filming conflicted with her schedule for the Man of Steel sequel. The Israeli actress plays Wonder Woman in the superhero film Batman v. Superman: Dawn of Justice. Actor Jack Huston takes on the [...]

    Read more →
  • Book Reviews Personalities Biography Sheds New Light on David Ben-Gurion’s Place in Jewish History

    Biography Sheds New Light on David Ben-Gurion’s Place in Jewish History

    JNS.org – There is one sentence in “Ben-Gurion: Father of Modern Israel” that made me sit up in surprise. I thought that I knew the basic facts about how Israel came into being, but while describing what it was like in the days and hours before the state was declared, author Anita Shapira provides one important anecdote I was not aware of. On the 12th of May, the Zionist Executive met to decide what to do. Moshe Sharrett had just returned [...]

    Read more →
  • Arts and Culture US & Canada ‘Death of Klinghoffer’ Actress Compares Met Opera to ‘Schindler’s List’

    ‘Death of Klinghoffer’ Actress Compares Met Opera to ‘Schindler’s List’

    An actress starring in the controversial Met Opera The Death of Klinghoffer defended the show on Tuesday by comparing it to the 1993 Holocaust film Schindler’s List, New York Post reported. “To me, this was like [the movie] Schindler’s List. We make art so people won’t forget,’’ said the actress, who plays a captured passenger in the show and asked not to be identified. The Met Opera focuses on the infamous murder of Lower East Side Jewish resident Leon Klinghoffer, 69. The wheelchair-bound father of [...]

    Read more →



Sign up now to receive our regular news briefs.