(Communicated by the Prime Minister’s Media Adviser)

Prime Minister Ehud Olmert, today (Thursday, September 11 2008), held a discussion on the economic situation and the conduct of economic policy in light of global economic trends and ahead of passage of the 2009 state budget.  Finance Minister Ronnie Bar-On, Bank of Israel Governor Stanley Fischer, Prime Minister’s Office Director-General Ra’anan Dinur, National Economics Council Chairman Prof. Manuel Trajtenberg, Finance Ministry Director-General Yarom Ariav, Finance Ministry Budget Director Ram Belinkov and 16 leading senior businesspeople attended the meeting.

Prime Minister Olmert said: "I asked to convene this meeting at a time that has become significant regarding how we continue to conduct economic policy, in relation to ourselves and to the global economy.  The first half of the year was impressive enough; we estimate that the second half will be less good.  I assume that in the business world, you feel the changes more quickly, and sooner, than we do.  This is one of the reasons why it is important to me to hear what you are saying and feeling in order to make the necessary changes and adjustments in our decisions.  As the Government, it is important to us to maintain the channels of dialogue with the business elements that represent the entrepreneurial spirit and dynamism of the Israeli economy.

Regarding the 2009 state budget, Prime Minister Olmert said: "I was of the opinion that, regardless of the political situation, we had to pass the budget as we decided and to overcome all obstacles.  The State of Israel is affected by the global economy and is part of it.  Not approving the budget would, in effect, freeze 40% of economic activity, i.e. the Government’s share of output.  This would have been a major mistake that would have broadcast insecurity and a lack of independence, regarding the international system as well."

The economic leaders commended Prime Minister Olmert on passing the budget, on maintaining the budgetary framework and for the Government’s not deviating from the expenditure ceiling beyond 1.7%.

National Economics Council Chairman Trajtenberg briefed those present and also submitted data to the effect that from the end of 2003 to the present, the State of Israel has enjoyed the longest and most stable period of growth in the last two decades.  He also noted that GDP has risen by 7.6% in two years.

Prime Minister Olmert said: "The peace negotiations being conducted by Israel, and the diplomatic processes, contribute both to the country’s economic stability. My Government has created an international environment in which cooperation with Israel has become something that the world lives with very well. Israel’s future security will not be decided by the fate of this or that hilltop but by strategic strength and economic security. We can achieve this through peace negotiations with all of our neighbors."