CBNNews.com - TEL AVIV, Israel - The Tel Aviv Stock Exchange (TASE) experienced its sharpest decline in eight years Sunday -- 6.3 percent -- following the U.S. Congress' passage of a $700 billion bailout to rescue America's financial industry.
The TASE decline swept across all sectors -- corporate bonds, real estate, technology, with the TA-25 Index down 6.33 percent and the TA-100 Index down 7.08 percent by midday Sunday.
Meanwhile, Foreign Minister and newly elected Kadima party chairwoman Tzipi Livni and Defense Minister and Labor party chairman Ehud Barak met with senior Israeli economists Sunday night to discuss the pros and cons of increases to the 2009 state budget.
One of Barak's demands for joining a Livni-led coalition is an increase in spending in the 2009 state budget by 2.5 percent of the GDP instead of 1.7 percent recommended by the Finance Ministry.
According to a report in The Jerusalem Post, no consensus was reached. Three of the economic experts at the meeting opposed any increased spending at this time, three opposed increased spending period, and only one supported an increase.
"We are moving into a difficult period of time as the global financial crisis is inevitably turning into an economic crisis that will also affect the local economy," Professor Dan Ben-David of Tel Aviv University, who attended the meeting, told the Post.
"But for coalition-building purposes, you don't want to increase budget expenditure," Ben-David said. "This is not the right time to raise the government's expenditure ceiling. In a time of crisis, you need to convey seriousness. This is not the time for petty politics," he said.
Source: The Jerusalem Post