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PM Netanyahu's Remarks at the Ceremony to Extend the Term of Bank of Israel Governor Prof. Amir Yaron

Israel - Prime Minister's Office

The 37th Government
18.12.2023

Following are Prime Minister Benjamin Netanyahu's remarks today, at the ceremony to extend the term of Bank of Israel Governor Prof. Amir Yaron, at the President's Residence in Jerusalem:

"The Honorable President and his wife,
The honorable Finance Minister,
The honorable Bank of Israel Governor and his wife,
The honorable former Governors of the Bank of Israel
The honorable Prof. Avi Simhon
Honored guests,

The Israeli economy is a strong ship in stormy seas. It is strong because especially over the last 20 years, we have turned it from a mainly Government managed economy to a free economy. This is the great key to releasing the forces of creativity, innovation and entrepreneurship latent in our citizens, without which the technology could do nothing. In North Korea there is technology, also in Russia.

This has helped us, this free market revolution, it is what we need to continue developing constantly, to reduce bureaucracy and regulation, to facilitate entrepreneurship and success, as well as failure - this policy has given us a strong economy that has helped us weather international crises, to a large extent, better than almost any other country in the world, including our exit, almost first - if not the first - in the world from the coronavirus crisis.

This strength also give us the ability to meet the burdens of the war, against a brutal enemy who exacts from us a very heavy and painful cost - the fallen, their families and, of course, the challenges that we face. We are also committed to winning the war, to uprooting and eliminating Hamas, to releasing our hostages, to ensuring that no threat to the State of Israel arises from the Gaza Strip ever again, and to ensuring stability and security on the other fronts.

All of this is in our grasp and the economy is an important component that will also allow us to utilize the necessary resources, especially in strengthening the reserves and providing the necessary equipment, in order to achieve these goals today and also to ensuring security tomorrow.

In order to do this, we need a very experienced and seasoned team in charge of the right policy for the ship. Therefore, over the years I have thought that the position of Governor of the Bank of Israel is a critical position in the crew on board the ship, and two things are necessary: One, to ensure what is understood in all of the advanced world economies, that the Governor of the Bank will be truly independent and that the central bank will indeed be independent; we enacted legislation to this end. Second, to choose appropriate men and women for this position who will fulfill it with responsibility and professionalism according to the free market economic policy, without which there is no possibility of financing anything. This is not to say that you will always be in the same fiscal framework, because sometimes conditions change, you need to spend more, but you are capable of fulfilling it due to our strong economy.

Several years ago, when Prof. Simhon came to me and proposed the candidacy of Prof. Amir Yaron, I did not know him. But I read several articles that he wrote, both while you were at Wharton and elsewhere. I was impressed by your professionalism, your insight, and your policy, which is our policy; therefore, I thought that you were a very worthy candidate and you have proven this. This is not to say that we have not disagreed from time to time, we do so behind closed doors and in the optimal manner, but all in all there has been very great agreement, and I also think, very great success.

Therefore, I think that the continuity and stability that we are showing in my consultations with the Finance Minister, especially during the war, the continuity in your position broadcasts the same stability, professionalism and seriousness regarding the Israeli economy, which is essential.

I would like to add one more item about the economy. It is clear, maybe it is not, but I will define is as succinctly as possible, because I think that this is the greatest challenge we face beyond victory in the war. Over the years, we have increased the security budget but in practice we have reduced it as a proportion of GDP. We have done so because our free market policy has increased GDP and therefore, if the security budget has also increased as a proportion of GDP, it has declined.

We will be unable to continue with this policy. As of now, we must significantly increase - in absolute terms, a considerable increase - the security budget by at least NIS 20 billion per annum, also as a proportion of GDP. It is possible that the supplement will be 1% or more of GDP in order to meet our security needs.

We are in the midst of several very extreme caliphates that want to uproot and destroy us, and we must strengthen ourselves. This strength also gives us the ability to forge alliances within and beyond the region. This requires a very significant increase in the security budget.

Our ship, the ship of the Israeli economy, which is also a passenger vessel and a commercial ship, needs to arm itself with more cannon and become a very, very strong warship. This is the first thing that will ensure our ability to sail it to safe shores.

I am certain that with your help, in the continuation of your important work and that of our team, we will succeed in this mission as well.

May you have great success."