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The rating action reflects S&P view of Israel's improved economic policy flexibility as a result of strong growth and careful macroeconomic management.

(Communicated by the Ministry of Finance)

Standard & Poor's Ratings Services (S&P) raised its long-term foreign currency sovereign credit ratings on the State of Israel to 'A+/A-1' from 'A/A-1'. At the same time, S&P affirmed the local currency ratings at 'AA-/A-1+'. Also, S&P's outlook is stable, and the transfer and convertibility (T&C) assessment remains at 'AA'.

Notes by Standard & Poor's on Israel's rating upgrade:

S&P mentioned that their ratings on Israel are supported by their view of its "prosperous and resilient economy, strong institutions, ongoing fiscal consolidation, and robust external performance." The ratings are also constrained by significant geopolitical risks, partially offset by U.S. support, and its still-sizeable public-sector debt burden.

According to S&P, Israel is on a credible path toward continued government debt burden reduction and stronger external indicators, having weathered the global financial crisis well. S&P also noted that Israel's external position is sound, as a result of consistent current account surpluses since 2003, and that that the production of natural gas by the middle of the decade is likely to further increase the economy's efficiency as well as strengthen its fiscal and external positions.

The stable outlook reflects S&P's opinion that Israel's popular consensus about containing public debt will remain intact despite social protests. S&P noted that "despite rapid appreciation in housing prices, we do not consider the sovereign to be exposed to significant contingent liabilities from the financial system.

Also, according to S&P, the banking sector appears to be tightly regulated, resident banks seem to pursue relatively conservative business models, and Israeli banks and households are also fairly well capitalized by international standards.


Israel's credit ratings:

S&P first upgraded Israel's credit rating to 'A' in 2007. In January 2009, it reaffirmed its decision, further giving Israel's market a "solid" forecast. Alongside the decision by S&P to upgrade Israel's credit rating to A+ this September, the two other major credit rating firms, Moody's and Fitch, also reaffirmed their rating towards Israel, as Moody's left Israel's A1-Stable rating unchanged, and Fitch ratings left Israel's A Stable rating unchanged.


Comments by Ministry of Finance officials:

Minister of Finance, Dr. Yuval Steinitz, noted that "this is an impressive credit given to the Israeli economy and its successful coping with the global economic crisis. This achievement of credit upgrade is especially unique given the debt and massive unemployment crisis, which hurt many economies' credit rating." Minister Steinitz also noted that "the fact that S&P mentioned the latest natural gas findings as a point of strength for the Israeli economy indicated the importance of the work done by the Committee to Examine the Fiscal Policy on Oil and Gas Resources in Israel, Headed by Prof. Eytan Sheshinski." The minister added that "Israel cannot rest on its laurels, as the on-going global crisis demands us to keep our budget frameworks and economic policies.

The Accountant General in the Ministry of Finance, Ms. Michal Abadi-Boiangiu, noted that "the announcement by S&P in such times, when the world is confronting a deep global economic crisis, testifies on the strength of the Israeli economy and reinforces the importance of reducing Israel's public debt."

Tourists from both Israel and abroad can travel the country and enjoy activities that have minimal impact on the environment and build environmental awareness.

Environmental tourism options in Israel are growing apace, especially in the verdant Galilee region. If you want a healthy holiday, check in to the 

Mizpe-Hayamim Hotel, Spa and Organic Farm.

 Dating from the 1960s, the complex was the vision of Dr. Eric Yaros – a physician and homeopath who emigrated from Berlin.

 The vegetarian restaurant gets a personal recommendation and while you're there, be sure to walk up the hill to the 28-acre farm that supplies every single one of the restaurant’s seasonal vegetables, fruits and dairy products.

 The valley below the hotel is home to the bird-watching paradise of the Hula Valley and Lake Agmon. More than 500 million birds – 400 species – stop over in the valley, as they migrate between Europe and Africa in the spring and fall. Visitors can rent electric golf carts or bicycles, and set out alone or with a resident ornithologist for a tour of the restored wetlands

 For a more intimate green getaway, try Hemdatiya in Moshav Sejera–Ilaniya. It's a small B&B with five rooms, in carefully-restored stone farm buildings dating from the early 20th century. Vineyards, goats and seasonal organic vegetable gardens, provide salads, wine and cheese for guests.

 Another attractive and practical eco-feature for drought-plagued Israel – all the water from the rooms is channeled down to the wetlands, to irrigate the orchards.

 Atalya Trua, one of the owners of Hemdatiya, is passionate about the importance of the eco-holiday site: "The ecologic life is the only way to live today… for the environment, and for the next people, the next generation."

The delegation is compiling data and information for the preparation of an Environmental Performance Review of Israel.


A delegation of experts from the Organization of Economic Cooperation and Development (OECD) and its member states including Norway, Germany, Korea and the USA has completed its visit to Israel to assess environmental conditions in the country and to compile data and information for the preparation of an Environmental Performance Review of Israel.

According to Environmental Protection Minister Gilad Erdan, "The arrival of the mission underlines the importance given by the OECD to the environment and to assuring quality of life in its member countries alongside economic growth. I hope that Israel's Environmental Performance Report will help upgrade the environment on Israel's national priority list."


Within the framework of Israel's accession to the OECD , the organization will be preparing an Environmental Performance Review (EPR) of Israel. During the delegation's 11 day visit to Israel, members met with the Minister of Environmental Protection as well as with representatives of government, local authorities, industry, environmental non-governmental organizations, etc. Their visit included field trips to the Hiriya recycling park, the Dan Region Wastewater Treatment Plant and the Hadera desalination facility.

Minister Erdan: "Analysis of the report which will be prepared by the OECD will allow Israel to assess its progress in attaining its goals and its international commitments. Its recommendations will serve as a catalyst for promoting our environmental performance."


The report will review Israel's environmental performance, with special attention to the use of economic tools for tackling environmental issues, including, among others, energy and air quality, transport and the environment, tourism and the environment, coastal zone management, the national greenhouse gas registry and reporting system, water, biodiversity, noise, waste and recycling, etc.

The report, which will be submitted to the government of Israel, will include conclusions and recommendations as well as a timetable for implementation designed to improve Israel's environmental performance. The OECD will formally follow up on Israel's progress in implementing its recommendations.


The Director General of the Ministry of Environmental Protection, Dr. Yossi Inbar, said: "This comparative assessment and the EPR process itself are an opportunity to review Israel's environmental performance in different subject vis a vis the existing knowledge worldwide. These tools will also allow us to contribute of the wide range of knowledge which exists in Israel in fields in which we are at the forefront."


In preparation for the delegation, the Ministry of Environmental Protection submitted background material, reports and data  to the OECD on a wide variety of subjects:

  1. Biodiversity in Israel - scientific data, information on open space, policy tools and Israel's National Biodiversity Plan, which was published in 2010.
  2. Examples of technological innovation in industry in Israel and the diversity of tools used to encourage innovation.
  3. The Clean Air Law and preparations for its entry into force in January 2011.
  4. The waste revolution and the introduction of extended producer responsibility on packaging spearheaded by the Ministry.
  5. Treatment and recovery of wastewater in agriculture, a field in which Israel is an acknowledged world leader.
  6. Desalination in Israel and measures taken to address the environmental aspects of desalination.
  7. Israel's active participation in international frameworks such as the Mediterranean Action Plan (MAP), cooperation on high production volume (HPV) chemicals, etc.
  8. Background material on local environmental activities such as community gardens.
  9. River rehabilitation in Israel and the chain of parks.
  10. Wide-ranging data on air quality in Israel, water quality, Sea of Galilee, etc.


An Environmental Performance Review is prepared by the OECD for member countries every few years, in order to improve the environmental performance of these states and to create a comparative index among OECD members. Furthermore, the report promotes a continuous policy dialogue among member countries through "peer learning" and stimulates a greater accountability from member countries' governments toward public opinion.





As has been customary for many years thus far, the largest Israeli business convention was once again inaugurated and sponsored by Globes.Stanley Fisher


The event played host to the most recognized and intriguing people in the Israeli financial and political world as they embark upon dealing with the issues that will design the forecasted outlook of the state and the economy over the next year.

It was thus no surprise that President of Bank of Israel, Prof. Stanley Fischer, was named 'Person of the Year' by Globes.  Fisher has been praised worldwide for his headstrong economic policies and how those policies have helped Israeli prosper and stay afloat during the world's far reaching economic downturn. 

Fischer showed his gratitude for the honor by thanking those in attendance.

"When we at the Bank of Israel come to make a decision on interests and interventions, we sit down in the office and we decide; it's that simple," explained Fisher.  "

"One time, I gave a lecture at a school in Modiin, and the teacher asked me how I come to make decisions on interest rates.  Well, without the extraordinary team that we have in the Bank of Israel - directors and employees - we could not have done what we did. It looks simple but it is not. They did it without hesitation and with great success and that is why the world of finance should congratulate these professionals," he continued.

Fischer did not hesitate in praising the Israeli Economy.

"We can press all the buttons we want, but if there is no economy that responds correspondingly, it will have no significant influence. For example, the low interests in the USA do not influence the mortgage loans, given that there are serious problems in this sector and that the banks are not willing to allow them.


We reduced the interest rates and attained a healthy financial system. That is why the banks responded immediately. Our ability to influence the economy is due to the fact that for many years there were people that worked to strengthen it. This started with the stabilization program of banks in 1985. The past representatives of the Bank of Israel and the ministries of Treasury and Employment also contributed significantly to our current, favorable situation.

In the times of the debt crisis in Europe and the United States, it is not shocking by any means that both are suffering the greatest financial disparity in the last hundred years."  

Fischer emphasized the importance of a stable economic model.


"If we are to learn anything from this crisis, it is that without a strong and healthy financial system, the economy can collapse," declared Fischer.

Look at Ireland: they did everything correctly except for one thing, they weren't cautious in the financial sector.  The revenue agents allowed for the banks to grow at 700% of the gross domestic product (GDP).

If the State needs to save a banking system whose substance is seven times greater than the economy, there is a problem. The fact that our financial sector is relatively conservative and that we have very strict control over the financial system are reasons why we [the majority of countries] are in the current situation; the biggest crisis since the 1930's."

In this light, Fischer shared with those present, the moment in which he was asked to be the President of the Bank of Israel

"It was at the end of 2004 when my wife and I were on vacation and Bibi [PM Netanyahu] spoke with us. He tried to convince me to accept his offer. It was his own proposition, after Prime Minister Ariel Sharon's previous offer. Now, I can tell them both, that I am grateful for having been granted the opportunity to conduct something I always wanted to - to contribute in some way or another to the success of the Israeli economy.

In his praises and thanks, Fischer referred to the issues that require attention in Israel

President Shimon Peres and Diplomacy's Danny Schwarz


"We have very serious problems such as poverty, infrastructures, peace...we are very good at dealing with the immediate issues but less so with the long term challenges. We must make a change. Five and a half years ago, I said that the Israeli economy was strong and very flexible. Many people approached me and told me I was too optimistic. I believe that if one does not listen to the all the scandals concerning the economy and if we look at what we achieve despite the challenges and wars; we have reasons to feel proud of ourselves.

But like everything in life, we must avoid indulgence. We are good for now, but these circumstances can change quickly and there still remains a lot to be done.''

Photos Silvia Golan