Reform of Financial Markets in Israel

Reform Plans
30 May ’04

ICSEP has circulated the following letter together with a PowerPoint presentation: “A Competitive Capital Market – A Growth Engine for the Israeli Economy”.

Dear friends,

Enclosed is a draft document on the reform of financial markets in Israel.

We hope it explains why such a reform is so vital for Israel’s viability, and why Israel needs a strong economy to meet the extraordinary threats and challenges facing it.

Finance Minster Benjamin Netanyahu has embarked recently on such a reform. The banks and other powerful vested interests will, however, do all they can to prevent the reform from being implemented. They have already started trying to have it indefinitely postponed and to whittle away at it. They will use every legal maneuver possible to block it. They will offer counterproposals that make the reform ineffectual, and they will pressure the government and lobby the Knesset for support for their proposals.

The group that formulated the reform plan, consisting of businessmen, economists, former public servants and academicians, a group that is growing daily, is determined to help the Minister of Finance see the reform through and accomplish its vital purposes.

To this end it has been engaging in a public relations effort to both explain the merit of the reform to Israeli citizens, and to counteract the immense drive financed by the banks to discredit its main premises.

Our group is also trying to gain support from internationally recognized individuals and bodies that will vouch for the viability of the reform plan and counteract the opinion of the many hired hands that the banks are recruiting in order to discredit it professionally. A similar effort is also underway in Israel.

Since past experience indicates that the opponents will also employ legal tactics against the reform, the group has spun off a group of jurists who will try to anticipate and counteract such delaying legal tactics and other legal objections designed to nix the reform.

At the moment the reform initiative enjoys wide political support among Knesset members. But there is little doubt that its opponents will try to reduce such support and undermine it. Our group is determined to do all it can to preserve political support for the reform by lobbying Knesset members and by appealing to decision makers and public opinion leaders to assure its enactment and implementation.

What we ask our friends is to lend us both moral and financial support.

A letter to Finance Minister Netanyahu encouraging him to pursue the reform will strengthen his hand. A contribution to this effort will enable us to not be hopelessly outgunned by the very wealthy interest groups that oppose reform.

Since as a tax-exempt organization ICSEP is not allowed to engage in political lobbying, our group has formed a not for profit organization called “Citizens for True Social Justice” that will do the lobbying work. Contributions to this group can be made by another tax exempt entity (details available on request).

Should you be interested we would be happy to supply you with further details about our proposed operations, as well as detailed budgets. Our goal is to raise about $500,000 (of which we raised nearly $200,000), a modest sum considering that similar initiatives have cost about $5 million to put through.

Sincerely,

Daniel Doron

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