Israel warns of 'anarchy' if meets all reform demands

01 Aug, 2011

Israel's government hit back on Sunday at protests against the rising cost of living, saying some reforms being demanded might lead to economic crises like those besetting parts of Europe and the United States.
The warnings followed marches by some 100,000 demonstrators, the resignation of a top treasury official and questions from leading commentators over Prime Minister Benjamin Netanyahu's ability to ride out a revolt by the middle class.
"We see the talk about the debt crisis in Europe. We are even hearing talk of a possible default in the United States," Finance Minister Yuval Steinitz said. "My supreme duty is to ensure we do not reach this situation in the State of Israel."
He rejected calls for the authorities to curb industry leaders who are often accused of artificially inflating the price of consumer goods through cartels tolerated by Netanyahu and his predecessors.
"We will not part with our principles. We will not create anarchy here," Steinitz told reporters. "We will attend to (market) concentration but we will not turn the rich and the business people and the investors and the industrialists into the enemies of the people, because they are part of a healthy economy."
Steinitz, a stalwart of Netanyahu's right-wing Likud party, has been the focus of criticism in the crisis that erupted this month, and was dealt another blow on Sunday when his ministry's director-general, Haim Shani, resigned.
Shani, a former CEO of Nice Systems, one of Israel's most successful high-tech companies, complained in a statement of "long-running disagreements over significant issues and the overall management manner" in the Finance Ministry.
They have been joined by activists of various demographic and political stripes, broadly representing the middle class, which is burdened by high taxes and serves as the backbone of the conscript military and its reservist forces.
The crisis has eclipsed the face-off with the Palestinians and other adversaries.

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