Full Text Israel Political Brief November 13, 2013: PM Benjamin Netanyahu’s Speech at the Ceremony for the Appointment of Dr. Karnit Flug as Governor of the Bank of Israel



Address by PM Netanyahu At the Ceremony for the Appointment of Dr. Karnit Flug as Governor of the Bank of Israel

Source: PMO, 11-13-13
יום רביעי י’ כסלו תשע”ד


Photo by GPO

It is on these kinds of occasions that we say: “all’s well that ends well”. We are celebrating the appointment of a woman as Governor of the Bank of Israel. This is new and important, but I believe that more important than the gender issue is your personal achievement and the fact that you have reached this position.

This is an exciting day for you, your family, your mother, your husband and your children. I am sure that you, as well as your family, wish your father Noah could have been here. I knew him and admired him for his historic deeds. He was a man passionately committed to bringing justice where justice was missing, and I know that this principle has guided you in your public life no less, and perhaps even more, than any other.

We built a country here from ruins and created something out of nothing. I know that this is a joyous day for the workers of the Bank of Israel, to have a Governor from the ranks of the Bank. I was impressed with your leadership over the past six months. I would define it as cold and calculated. Not cold at heart, but calculated, adapted to the needs of the economy and primarily to financial stability. Now, we will all be tested on the basis of the outcome, as a former government minister would define it.

The test first of all is to continue the growth, continue our low unemployment rates – exceptionally low in today’s Western world. We belong to the Western economy, we belong to the global economy. This is not a trivial thing, because the State of Israel has great needs. Our needs are equal to those of two great powers, and we would happily settle for the GNP of Germany or Britain, but we do not have it. Nevertheless, we are, in a certain sense, a national miracle – an international miracle, and certainly an economic one. Our per capita GNP continues to rise and will soon exceed that of Europe’s leading countries. It has already exceeded that of large European countries, and I believe we can continue along this path because we are in the age of information. Not in a decade of information, but in a century of information.

We need first and foremost to nurture our own abilities. We have been discussing it continuously. We have to provide opportunities for the enormous creative power that exists within our people, and it is indeed an enormous creative power. The President always says to me: look at what I find when I travel around this country. I see this great creative force that ultimately translates itself into a great output.

I know that we are expected to work together as a team – I and the Minister of Finance and Karnit. We get into a room, and nothing comes out. It is completely quiet outside and often stormy inside. We make a decision and go. And the Bank of Israel is entirely sovereign. This should be clear. This is one of the unique things that we have created. There are some countries which still refuse to acknowledge it, but not us. This joint leadership will be tested on the basis of many things.

I have read about some of the things you have been dealing with, several of which we have been doing together – the committee to increase competitiveness, the committee for socio-economic change, the committee for the examination of the security budget, the committee for the financial viability of the National Insurance Institute, the national strategy committee, and so on and so forth. We are constantly engaged in this, because reality keeps changing and we need to address it and to show results.

I believe that there is one more thing that we need to do, and the President spoke about it. We need to create a sense of justice or at least a sense of decency in the economy. We must not become one of those countries whose citizens believe that their success is not the result of their efforts, talents or education, but rather the product of some system of connections. This tension always exists, and we must reduce it as much as possible.

I was very impressed with a book I recently read by Prof. Luigi Zingales, an economist of Italian origin who is currently residing in the US. He claims that there is a difference between being pro-market and pro-business. He argues that pro-business in the sense of big business means supporting the cartelization or the monopolization of the economy, whereas pro-market means the opposite – encouraging competition. Competition is good provided that there is no combination of factors that work to prevent competition, be it the government, private business or other factors. We should, to the best of our ability, allow real competition, refrain from centralization, ensure fairness and allow for the distribution of financial and other resources to produce the tools for growth and for the distribution of the products of growth. This is not a simple task because Israel is characterized by a great deal of centralization. This is the reason that approximately four or three and a half years ago, I established the centralization committee, and we have been working on it to this day. We will have to continue to pursue this and to guarantee the foundations of fairer and more equitable competition. Not entirely equitable because that does not exist in reality, but there is a middle road here, and Israel is committed to it, apart from all the other things that we will have to do.

I believe, Karnit and Yair, that we are capable of achieving this goal. Knowing you, and I have come to know you better recently, I believe that this mission is within our reach. I believe Israel faces formidable challenges, but also has a bright future. We stand out in the global economy. We cannot disconnect ourselves from it, but we want to excel within it and this is what we are doing and I believe that we will continue to do this. I want to congratulate you on this special day. May we all be blessed with the fruits of our common labor.

Good luck.

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