Euro crisis? Not for us, thank you

This blog first appeared in the Times of Israel on June 21, 2012.

“If Israel were in Spain’s situation, Heaven forbid, no body or state would inject 100 billion euros to help us out.”

Such were the wise words of our finance minister, Yuval Steinitz, this week, just hours after Spain’s banks were assisted out of their little troubles with a 100 billion euro rescue package (Spain so downplayed the occasion that the Spanish prime minister made no statement until a day after the bailout, after which he hopped on a plane to watch the football in Poland).

So, thank you Mr Steinitz. That makes at least three people now (him, my neighbour from across the landing, and me) who understand that Israel is in no position to gloat while others are capsizing. There’s a mood in the country that, “Well, we managed to weather that storm, well done to us for keeping far away.” Now, that may be acceptable thinking by your greengrocer or reflexologist. But anyone in politics, and I mean all 120 damage-wielding, overpaid members of Knesset, should congratulate themselves less on missing the boat and think more along the lines of, ‘Would we have fared any better had we been on the boat?’ and ‘How sure are we that we won’t hit the same storm ahead?’

There’s a Greek tragedy playing out before our eyes, and the drama is spreading across the continent. The Greek populace, facing stark austerity plans, is up in arms, the Spanish banks are reeling, the Italians are poised on the brink, and the Germans are rattled at the bill that they—and largely they—will have to pay to save the day.

Once upon a time (about 20 years ago actually), some European countries got together to work towards a more unified economic bloc, bound together by a single currency. The Maastricht Treaty, that paved the way for this union, set targets for individual member countries on such measures as inflation, government budget deficits, and public debt. For example, the budget deficit (how much more a government spends than it receives in any given year) shouldn’t be more than 3% of the previous year’s GDP and public debt (total debt owed by the government) shouldn’t be more than 60% of GDP.

So how comes Greece has come a cropper? Its economy, now contracting fast, has been on the rocks for a while. Its unemployment is very high, heartbreakingly so among the young. All of this has led to a budget deficit of 10% or more (compared to the 3% in the Maastricht rules) and public debt soaring to…. wait for it…. a colossal 161% of GDP in 2011.

Greece is often referred to as “a poor country of rich people”. Indeed Greeks have an aversion to paying taxes or contributing to the common good and now it’s coming to haunt them.

And now for the Israeli smugness: Our economy isn’t contracting, it’s not even sluggish. Our budget deficit last year was 3% and our public debt has contracted to a decent 75%. We may grumble about taxes–who doesn’t?–but we do pay them.

So should we be patting ourselves on the back?

Not yet.

It has long been held that in good times a government makes a budget surplus (i.e. takes in more money from taxes than it spends) and in bad times, it does the opposite. In other words, when times are good, a government puts something aside for that inevitable rainy day.

The underlying logic is simple: the burden of spending should fall fairly across generations (quote from a UK government document, which must be up there on the best-sellers list, just after Jackie Collins). In other words: all public consumption benefiting the current generation should be paid for by that generation.

The trouble starts when you abandon this philosophy, and start spending money you don’t have, pushing the bill onto your children. It’s what the US has been doing for years, and UK, Greece, and others in Europe have practiced in the past decade or so.

And Israel? Well worryingly, we’re heading in that direction too.

While Europe has been reeling from recession, Israel has indeed notched up impressive economic growth rates of 4.6%, and 4.8% in recent years. But at the same time it’s borrowed, with budget deficits nudging 4% of GDP, when according to traditional theory, the government should have been recording surpluses. If you can’t make a surplus when your economy’s growing by over 4%, when can you?

Our politicians would do well to read Aesop’s fable of the Ant and the Grasshopper. Because it’s been a wonderful summer, and we’ve been singing (our own praises) when we should have been preparing for the hard times ahead.

Never mind the debris, have a pina colada

I was cycling along yesterday evening, from Tel Baruch Tsfon in north Tel Aviv (pleasant dull suburbia, with orderly top-end apartment blocks, wide streets) through Park Hayarkon (joggers, cyclists, strollers, after-work get-fitters), onto Ibn Gvirol Street (cafes, meeting places, friends sitting, chatting on benches), past Habima (children playing and families sitting in the sunken garden), and finally down Rotschild Boulevard (cycling, walking, couples hand in hand) and I thought, “This is Tel Aviv. And I love it.”

But apparently this is all a sham. A bluff, as they say in Hebrew. According to a report on CBS’s 60 Minutes program, aired on TV in Israel just this week, the buzzing, happening city of Tel Aviv is only partying because, apparently, we all expect to die tomorrow. “It’s the last day of Pompei,” as some unknown Israeli with strong opinions told the 60 Minutes reporter.
It was a scathing, hyperbolic take on life in the “city that never sleeps”, voted as third hottest city in the world (Lonely Planet 2011), best gay city in the world (American Airlines 2011) and ninth best beach city on the planet (National Geographic 2010). According to 60 Minutes, we are surrounded by war, and yet prefer to stick our hands in the sand.
It was a picture of Tel Aviv that I simply didn’t recognise.
And when I hear people praise the mayor Ron Huldai for the wondrous things he’s done in the city, I don’t wish to steal his thunder, but I really think the true praise should go to the ones that make the city the vibrant wonderful Tel Aviv that it is. Yes, the Tel Avivians. The ones out strolling, sitting, cycling, frequenting theatres and clubs, sipping espressos in cafes. Because at the end of the day, any city is only as great as the people who live there.

Of course there are those that come here, and see a very different city.
The African other world. The actual numbers are unknown, as many of them have entered the country illegally and are without official papers, but there are reportedly upward of 50,000 immigrants from South Sudan, Sudan, Eritrea and the Ivory Coast. Many have fled untold horrors in their native countries, and have managed to escape danger, travel across continents, avoiding bullets along the way, until finally reaching... well let’s call it the Promised Land for want of a better name. Many are caught and are incarcerated for short periods by Israel before being eventually released and given a bus ticket to anywhere. Which normally means Tel Aviv, you know the city where they’re busy partying before the volcano erupts.   

Immigrants celebrating Seder in Tel Aviv Photo: Nathan Jeffay/The Jewish Daily Forward

When the numbers of Africans grew too big, some of the locals grew restless. Until finally, the government decided to take immediate (as usual, read “knee-jerk”) reaction, and is now repatriating as many South Sudanese as will voluntarily step forward. This Sunday, on the first plane, Israel sent some 127 back, each with $1,300 as a gift from the Israeli taxpayer (and $500 for each child). Of course, “voluntarily” can be misleading, as apparently if you don’t step forward, the authorities will track you down and send you back anyway (but without the $1,300, I imagine, and without our smiling Interior Minister waving you off from the airport tarmac). 

Now there are reportedly only 1,500 South Sudanese in Israel. In other words, to address a problem concerning 50,000 people, the government, up to its usual standard of incompetence, has taken very firm action regarding... well... 1,500 of them.

Why have the South Sudanese be singled out? Simple, because the courts said they can, because theirs is a newly independent state and “safe”ish.  

Which brings me onto a philosophical question: When times are bad, do you flee or stay?

Taking a global look, all the great countries of today have been through troubled times, revolutions, and wars, including civil wars. Britain, France, USA, Russia, Germany, Italy, Spain, have all been through awful stages in their evolution. There were times when a wrong word in the wrong ear could get your head chopped off in England or France. When innocent people were sent to labour camps in Spain, or exiled to the Gulag.

In the 2006 film The Lives of Others, a woman pokes her head around her front door in a block of flats in East Berlin and accidentally sees the Stasi putting in a wiretap in her neighbour’s flat. Eyes lock, but then she silently closes the door. To me, that sums up the fate of a country. If millions behave in that manner, then evil and dictatorship will win. I am most encouraged when I see Israelis argue with figures of authority, because that’s a country that will survive, where evil and dictatorship shall not prevail. Now I am not belittling the tragedies that occur today in many forsaken places in the world, and I’m not advocating that we send everyone back to where they came from, no matter how dangerous those places are. But I am raising a thought: that the “safe” places in the world were not made so by some heavenly decree, that the great, free, democratic countries of today are great and free not because they always were, but thanks to their people who stayed, and fought to make them so.

At the end of the 60 Minutes report, the presenter asked Yossi Vardi, the grandfather of Israeli venture capital, if he liked Tel Aviv (despite the rumblings of the volcano, imminent death etc.). He leant forward until their noses almost met. “I LOVE IT” he said.

I agree.

But Dougal, it's not really magic, said Florence

When the traffic lights are green, what does this mean to an Israeli driver?

"Step on the gas", of course.

At least, that's the answer I got when I asked a hall full of engineering students when I recently gave a lecture on Road Design: Thinking Outside the Box.

That was quite an experience I can tell you. When I recall the lectures I attended in England way back in the previous century, I think of hundreds of students sitting in tiered lecture theatres (lovely term) hanging on to every word, as some lecturer espouses a theorem, defines a school of thought, or attempts a joke, while imparting his or her pearls of wisdom. Noticeably, other than the lecturer, the room is silent. Not one student speaks.

Now shift the camera to Israel, and zoom in on some lecture theatre, here. You'll find a very different picture. The more appropriate word that springs to mind is Interaction. Noise. Audience participation.

A new experience certainly.

So I delighted the crowd with some pearls of wisdom. On roads, and how they could be safer.

Roads are notoriously dangerous in Israel. Though now I've said it, I should qualify that.

It's all relative. Very possibly it's more dangerous crossing the road in Delhi, having to maneuver between 15 lanes of trucks, cars, buses (all belching out lethal fumes) bicycles, rickshaws, scooters, motorbikes (often carrying an entire family) and a cow or two.

When I first arrived in Israel many years ago, in my innocent stage, when everything seemed achievable, accessible, agreeable and at the same time unintelligible, I approached the Road Safety Authority. I met with the chairman and suggested, in my childish innocence, some ways of improving the design of roads in Israel. At one point, I made some comparison to England, to which he immediately bristled. He poohpoohed my suggestions. (Now, when was the last time you had a good "poohpooh"?)."Well of course," he dismissed, "England's at the top of the league in safety", as if it was ridiculous I should even mention it in the same sentence as road safety in Israel, as if the two worlds had nothing in common, and he showed me the door. But let's not be put off by his appalling attitude. (He was also little concerned over the dreadful rates of pedestrians injured or killed on the roads, and I quote him here, "Yes, but many of them are foreigners."!! This was years ago, and I'm sure his replacement has more feeling. Possibly he was replaced by a biro. Actually, the government clearly thought something was amiss as the National Road Safety has seen its budget shrink over the years)

Photo: Architecture.org.il

Now back to the lecture.

You don't see many roundabouts in Israel. Certainly not on major roads, though they are popping up here and there in smaller urban intersections. Jerusalem, Tel Aviv, even Modi'in-Not-By-The-Sea has hopped on the bandwagon. This is encouraging.

Roundabouts are safer than regular junctions with traffic lights. And they're more efficient too.

How so?

Well they're more efficient in one simple way: you don't have to necessarily stop when you come to one. Slow down, certainly, but if there's no traffic around, off you go. Particularly at quieter times, traffic flows more smoothly over roundabouts. And having no traffic lights saves electricity. (Which would delight the Israel Electric Corporation, but I'm not even going to mention them this week).

And why are roundabouts safer?

Studies abroad showed that when a regular junction was replaced with a roundabout, accidents dropped by 40%, injuries fell by 80% and fatalities plummeted by over 90%.

Why?

First of all, serious accidents and injuries (including fatalities) are the result of side-on or head-on collisions. But at a roundabout, cars are never facing each other, or at right angles to each other. They merge, roughly moving off in the same direction (hopefully anti-clockwise).

But the other reason I and my enlightened Israeli students concluded was this: At a roundabout, the driver has to slow down, THINK and USE HIS/HER JUDGEMENT. So whilst the brain is in active mode, the driver is a safer driver.

At a traffic light, in contrast, the driver – in automatic mode – just watches the lights, and steps on the gas, as the students eloquently put it.

There are plenty of things in Israel that could drive you round the bend. But let's hope there'll be more reasons that will have us driving, safely, round a roundabout.