Netanyahu Announces Expanded Coronavirus Aid Package for Israel’s Health System, Economy
Israeli Prime Minister Benjamin Netanyahu on Wednesday announced the government would expand an aid package to help the country deal with the coronavirus outbreak by 6 billion shekels to a total of 10 billion shekels ($2.8 billion).
Of that, 8 billion shekels will be in a fund to provide cheap loans to businesses.
“Corona is greatly affecting the global economy and our economy as well,” Netanyahu said. “We are entering this crisis in a good situation. The Israeli economy is in a better situation than most economies in the world: Unemployment is low, growth is high and the debt-to-GDP ratio is good.”
“However, we have a great challenge here that we all are feeling and which we are all aware of,” he continued. “In our view, we can also deal with it in a way that will allow us to get through it successfully in peace. Not without difficulty, and not without sacrifice, but in the end, in peace, and I think that we can do this together in an optimal manner.”
“In this NIS 10 billion, the first thing is NIS 1 billion for health,” Netanyahu stated. “We see this as not only for health, but for life. We are talking here about saving lives. If somebody gets through this crisis with general malaise, a kind of minor flu, nothing has happened. However, we know that there is also the possibility that this could claim a high price in lives and we want to minimize the cost in lives here. Therefore, we are giving preference to the health system and we are using NIS 1 billion here to first increase the supply of drugs, to purchase medical equipment, to prepare the hospitals to receive a greater number of patients and to prepare the medical teams.”
He added that businesses hurt by the outbreak could apply for loans from the aid funds. Interest rates would be lowered and assistance provided to vulnerable industries such as tourism.
Netanyahu noted that further aid funds would be made available, if needed.
It was not immediately clear where the money would come from since a 2020 budget has not been passed due to a year-long political stalemate. A version of the 2019 budget is being used by a caretaker government, after no clear winner emerged from the election on March 2, the third vote in less than a year.
Later on Wednesday, Netanyahu announced a ban on gatherings of more than 100 people.
Israel has 82 confirmed coronavirus cases and is taking strict measures to contain the virus’ spread, including requiring anyone arriving from overseas to self-quarantine for 14 days. Many airlines have suspended service to Israel.
Finance Minister Moshe Kahlon said that if the situation did not improve soon, more tools would be announced next week.
Bank of Israel Governor Amir Yaron said the economy and banks remained in good shape but that the central bank “has tools to restore liquidity to markets” if necessary.
Israel‘s economy grew 3.5% in 2019 but is expected to take a hit this year due to coronavirus.
The main Tel Aviv share index — the TA-125 — is down 20% this year. The shekel has fallen 4% against the dollar in the past three weeks.
“The Israeli economy has ample room to cushion uncertainty,” Citi strategist Luis Costa said.
Earlier in the day, flag carrier El Al warned of a significant adverse affect on its operations from the government’s quarantine order. Kahlon said the airline sector would receive special state aid.