Economic Impact of EU and UK Actions on Israel: “Nstart Exist,” Says Finance Ministry Economist

EU and UK Decisions

In light of escalating diplomatic tensions between Israel and key European trade partners due to the ongoing conflict in Gaza, the Finance Ministry in Israel has sought to downplay potential economic repercussions. Following the European Union’s announcement of a “re-evaluation” concerning Israel’s compliance with the foundational agreement and the UK’s suspension of negotiations aimed at upgrading the free trade agreement, Chief Economist at the Treasury, Samuel Abramzon, stated firmly, “The economic impact of these measures, as we see it, does not currently exist.”

Analysis of Economic Effects

Abramzon emphasized the lack of identifiable economic consequences resulting from these recent developments. He noted that extensive searches for signs of economic disruption-such as contract cancellations, investment slowdowns, or declines in trade-yielded no significant findings. He explained, “Market indicators show that concerns may be exaggerated. Look at the capital and foreign exchange markets: they have shown minimal reaction, indicating a sober assessment from both the markets and investors.”

In the past month, the shekel has appreciated by four percent, and the stock market has returned to its highs, witnessing a six percent increase. Abramzon remarked, “There has been nothing significant or extraordinary today or yesterday; investors are considering long-term factors.”

Outlook on UK Trade Relations

The Chief Economist suggested that internal political considerations and public opinion in European countries may have influenced these actions. However, he believes the difficulties are transient, particularly regarding the UK: “There is no reason to view this as a long-term strategic economic event. The British specifically find themselves in a position where they are very interested in this trade agreement. Therefore, when political and security events return to normal, we anticipate that trade will also resume.”

Ongoing Treasury Initiatives

Despite the recent tensions, Abramzon indicated that the Finance Ministry continues to operate normally. He stated, “We have maintained constant communication over the last day and a half with international partners. We are actively engaged in negotiations for agreements with other countries, which we expect will gain momentum in the coming weeks.”

As the situation develops, the Finance Ministry remains focused on facilitating trade and economic stability amidst ongoing geopolitical challenges