Jerusalem, 31 December 1998

FINANCE MINISTRY: EURO ENTRY AS SEEN IN ISRAEL

(Communicated by Finance Ministry Spokesman)

Finance Ministry Ben-Zion Zilberfarb today (Thursday) 31.12.98, said, "The entry of the Euro is expected to have a positive effect on Israel’s economy." He added that the move to a single currency will lower intra- European business costs, increase competitiveness and bring about lower prices in Europe and therefore the cost of European imports to Israel.

Dir.-Gen. Zilberfarb believes that Israeli exporters to Europe will enjoy only some of the benefits of the lower business costs and are likely to encounter higher competition from European manufacturers. On the other hand, the Euro will have positive effects on economic growth in "Euroland", which will raise consumer demand for imports from Israel. Overall, the effect on Israeli exports will be positive, in combination with the expected lower prices of imports, thus resulting in a positive effect on the Israeli economy.