(Communicated by the Cabinet Secretariat)

At the weekly Cabinet meeting today (Sunday), 7 June 2009:

1. Prime Minister Benjamin Netanyahu made the following remarks at the start of the meeting:

"In recent days, I have read and heard quotes attributed to me that I did not say. I would like to make it clear: We want to achieve peace with the Palestinians and with the countries of the Arab world, while attempting to reach maximum understanding with the US and our friends around the world. My aspiration is to achieve a stable peace that rests on a solid foundation of security for the State of Israel and its citizens. Next week, I will make a major diplomatic speech in which I will present the citizens of Israel with our principles for achieving peace and security. Ahead of the speech, I intend listen to the opinions of the coalition partners and other elements among the Israeli public."

2. Mossad Director Meir Dagan briefed ministers on the purpose, functions and structure of the Mossad.

3. Industry, Trade and Labor Minister Benjamin Ben-Eliezer briefed ministers on his 3-6 June 2009 visit to the St. Petersburg International Economic Forum. He noted that he participated in two panels, on the effects of global economic crisis on global security and renewal energy resources and energy efficiency. He held 15 meetings with heads of multi-national corporations and ministers from Russia and other countries, as well as a press conference for the Russian media.

4. Pursuant to Article 4b of Basic Law: The Judiciary, the Cabinet named Minister Gilad Erdan to the Judges’ Election Committee, alongside Justice Minister Yaakov Neeman who chairs the Committee.

5. Pursuant to Article 6a of the 1955 Rabbinical Court Judges Law, the Cabinet named Minister Eli Yishai to the Rabbinical Court Judges Appointment Committee, alongside Justice Minister Yaakov Neeman who chairs the Committee.

6. Pursuant to Article 11a of the 1962 Druze Religious Court Law, the Cabinet named Minister Zeev Binyamin Begin to the Druze Religious Court Judges Appointment Law, alongside Justice Minister Yaakov Neeman who chairs the Committee.

7. Pursuant to Article 4a of the 1961 Kadi Law, the Cabinet named Minister Yossi Peled to the Kadi Appointment Committee, alongside Justice Minister Yaakov Neeman who chairs the Committee.

8. Pursuant to article 31a of Basic Law: The Government, the Cabinet decided to establish the Regional Cooperation Ministry.  The ministry will promote economic cooperation with the countries of the region and with the Palestinian Authority and the implementation of joint economic projects in the area, in order to create conditions conducive to regional economic welfare and stability.

9. The Cabinet decided to appoint Minister Avigdor Liberman to be responsible for the strategic dialogue between Israel and Russia, and chair a team that will be responsible for strengthening bilateral strategic relations. The other members of the team will be: Mossad Director Dagan, National Security Council Chairman Uzi Arad, Foreign Ministry Director-General Yosef Gal and Defense Ministry Director-General Pinchas Buchris.

10. The Cabinet approved the draft amendments to the 2009 Political Party Financing Law. 

11. The Cabinet approved the draft amendments to the 2009 Local Councils Law.

12. The Cabinet approved the draft amendments to the 2009 Collective Wage Agreements Law.

13. The Cabinet approved the draft amendments to the 2009 Workers Rights Improvement Law.

14. Due to the affects of the global economic crisis on the Israeli economy, the Cabinet instructed Finance Minister Yuval Steinitz to request that the Knesset Finance Committee to advance legislation that would lower the monthly salaries of the prime minister and all ministers by 5%.

The State of Israel has been affected by the wide-ranging global economic crisis, the likes of which have not been seen for decades. The crisis began far from Israel’s shores and is the product of events which occurred and decisions that were made in the US and in other countries. Given that the Israeli economy is part of the global market, it has been affected by the global economic slowdown, which will be a dominant factor in the Israeli market for the foreseeable future.

Due to the crisis, the Israeli economy has been hit in various areas. The effects of the crisis may be felt in Israel in – inter alia – the capital markets, the drying up of credit, declines in investment, reductions in imports and exports and a considerable rise – in recent months – in the number of jobseekers. Recently, state revenues from taxation have declined which has led to increases in the budget deficit and increased public debt. In 2009, these processes are likely to continue and even worsen.  Private consumption is also expected to decline.

In such circumstances, there needs to be a careful, measured and considered use of public funds as part of policies designed to give a fair, measured and appropriate response to the economic crisis. Such policies will facilitate the reduction in the negative effects of the crisis while providing a response to the unique risks of the Israeli economy, including a relatively high external debt and a complex geopolitical situation.

Alongside the state’s actions to assist the economy in dealing with the financial crisis and the economic slowdown, which will cost billions of shekels, Government ministers are required to set a personal example.

It should be noted that the Knesset House Committee and the Knesset Finance Committee decided in late December 2008 that the base salaries of senior public officials such as the President, ministers and deputy ministers, MKs and others would not be adjusted and that the scheduled 3.8% adjustment would be cancelled.