How to assist their citizens in coping with the growth in living expenses has been a major concern for the majority of governments in European nations during the past six months. They acted as soon as it became clear that the inflation was not “passing” as the central banks had predicted and that the conflict in Ukraine was aggravating rises in consumer price indices across the continent. The generally more educated European people started to demand this through the media, political voting, or even public demonstrations.
Nearly every government in central Europe has already launched a multi-billion scheme to actively assist the populace in coping with price hikes. You could read more in Globes about the several new measures: For three months, Germany made public transportation nearly free. The cost of gasoline and diesel at the pump was subsidized in France (and many other nations), while the price of electricity was capped. In order to help its citizens cope with rising food and heating expenses, Austria distributed cash subsidies. Most nations boosted welfare payments, gave out vouchers for food and heating, and some even said they would raise pensions.
In Europe, people run deficits without hesitation.
The basic line is that European governments do not hesitate to re-enter the deficits that they have tried to lower since the corona virus because of the severity of the crisis and their grasp of the effects of rising costs on the general public, especially on the weakest strata. It is frequently an internal budget diversion rather than a net deficit, and it is inevitable that government expenditure will rise for initiatives aimed at facilitating the public’s lives: Italy will set aside 17 billion euros, and France will invest 25 billion euros in the upcoming budget to assist citizens in coping with inflation. It is anticipated that Germany will allocate a sum greater than 20 billion euros. Is there a nation in the Eurozone that leaves its citizens to deal with inflation alone?, French Finance Minister Bruno Le Maire asked rhetorically during a speech before the French Parliament to summarize the European strategy.
The answer is no in the Eurozone, but it is unambiguously affirmative in Israel. In actuality, the Israeli government is allowing its citizens to handle the growing prices on their own. Everyone for themselves. The Israeli government took essentially no active measures, with the exception of temporarily lowering the tax on fuel and coal and halting the increase in the price of regulated bread.
It saw the impending inflation with calm, assigned the Bank of Israel and monetary controls the task of addressing it, but essentially abdicated its responsibilities to assist the locals through price hikes.
For better or worse, Israel presently employs a different economic strategy from that which has gained traction in Europe since the corona virus as the explanation for this. The Israeli economic strategy continues to adhere to the tenets of deficit reduction, moderation in public spending, lack of market interference, and growth above all else. The situation has altered in Europe. It is imperative to run a deficit in order to fund infrastructure improvements and resident aid. The phrase “the idea of thrifty countries has been dead for a long time” was used by French Finance Minister Le Mer.
Why not tax powerful banks and corporations?
Governments have “modified the laws” legally in addition to spending their own money to combat inflation. New taxes on the “excess profits” of energy companies, which profit from the global price increases without lifting a finger, were suddenly imposed in Great Britain, Greece, Spain, and Italy. On the basis that the country’s banks are profiting from interest rate increases and recording “excess earnings,” the Spanish government has decided to impose a new tax on the excess profits of the country’s banks, which are expected to total at least 3 billion euros in the next two years.
Does anyone in the State of Israel seriously consider taxing the banks in Israel, which made approximately NIS 18 billion last year? Is there any chance that the Israeli government will shut down large firms that benefit from price hikes and utilize the money from these revenues to relieve living conditions for the populace?
The Israeli strategy might be superior to the European one. The growth projections for Israel substantially surpass the apparent European slump. Additionally, Israel is ranked higher by international organizations. However, these are not the only ones.
- Future investment, a greater standard of living, affordable housing, significant purchasing power, and a lower poverty rate all have an equal impact on Israeli life and are currently disregarded.