Buoyant Israeli economy fails to dent fury at banks
THE ISRAELI economy continued to grow in 2011 and unemployment was at its lowest level in three decades over the course of the year, according to the Bank of Israel annual report released last Wednesday.
The report found that, in 2011, the Israeli economy grew by 4.7 per cent, more or less the same as 2010, while unemployment dropped to 5.6 per cent. At the same time, the consumer price index climbed by 2.2 per cent and energy prices went up by 9.2 per cent.
Alongside this rosy picture, the report also highlighted that social inequality in Israel remains higher than in most Western countries.
Israel still faces a serious wealth gap and economic risks relating to security, demographic changes, and problems in the education system, according to Bank of Israel Governor Stanley Fischer who presented the report last week.
Meanwhile, anger is growing in Israel towards the country’s banks, with customers furious that they pay higher charges and receive less interest than people in many other countries.
Bank profits have long been a sore point for Israelis. But, as last week was the first time that banks presented their annual reports since the country’s social protest movement was born — and since the governmental commission launched in response found indications that banks “charge households a higher price than the competitive price” — hostility was particularly high.
Banking executives were forced on to the defensive as they revealed their profits for 2011, up on average 10 per cent on 2010.
“The other day I was told that, if I wanted to slightly increase the sums I pay back on a small loan, there would be a 350 shekel (£60 fee),” said Dana Gilson, a 32-year-old designer from Jerusalem. “And the banks charge for every little service, even for depositing cheques.”
In Tel Aviv last week, 150 people, including Labour politician Avishay Braverman, held a so-called “day of rage” protest against the banks. “The main demand is for the Bank of Israel to monitor and regulate the banks,” said protest leader Regev Contes.