Israeli News: A Daily Analysis

A Daily Analysis

By Marc Schulman

October 5, 2008- Livni Speaks Out of Olmert Interview, Economic Crisis Arrives in Israel

Tzipi Livini, Foreign Minister and new leader of Kadima spoke today about negotiations with the Palestinians for the first time since her selection as the new party head. As would be expected of someone trying to put together a coalition, Livni's speech was not groundbreaking. Without mentioning his name, she strongly attacked the recent interview by Prime Minister Olmert about peace with the Palestinians. She did not criticize his positions, but did attack his timing. She criticized him for presenting Israel's final position and his attempt to tie a future Israeli government to a timeline that she believes is not workable. Livni re-stated her commitment to the Annapolis process. However, she believes it will take more time than many think it will take to accomplish.

In the meantime, coalition negotiations continue. Barak and the Labor party are trying to convince Livni to increase the budget deficit, a proposition to which the Finance Minister is completely opposed.

What is happening in Syria? The bombing last week was one of a number this past year. Syria used to be considered a very safe place (at least if you supported the government). Hezbollah told its members that it was not safe to travel to Syria. It's not clear what is happening. With 1.5 million Iraqis in the country, Hezbollah, the Palestinians and others having bases in the Syria, its really not clear that Assad has control over all the players. There are those who support peace talks with Israel and those who want to strengthen their ties with Iran. Those who want Syria to take one position, and those who are in favor of the opposite position in Lebanon. Sometimes it's hard to juggle.

The economic crisis hit Israel today, with a 6-7% drop in the stock market and the real estate index dropping 11 percent. That index has dropped 2/3 since the beginning of year. Today, fear seemed to grip the exchange, as rumors spread that the large conglomerates were in danger of collapse. The view was enhanced by the realization that most of the large conglomerates were heavily leveraged. Many of the debt offerings of these groups were being sold at 50% discount. Some of those were being snapped up by those very same corporations, allowing them to pocket some very nice profits.