"Experience shows that the economy is immune at the macro level, and recovers fairly quickly, although it is clear that people have been hurt, especially residents of the south, small businesses, and people issued emergency call-up orders," she said.
Asked whether the cost could be contained within the 2014 budget, Flug answered, "There is still no estimate for this." In response to a question about raising taxes, she stated, "It will be necessary to decide next year about taxes. The defense requirements resulting from this operation are liable to grow, among other things, and the government will have to decide whether to raise taxes or cut civilian spending." Flug refused to directly express an opinion about raising taxes, noting that this was the government's job.
Commenting on the elimination of VAT on a first apartment, Flug said, "This isn't really related to the fighting that took place. The VAT exemption is ineffective as a solution to the problem of housing prices. The solution has to be a massive increase in supply. Prolonged uncertainty is liable to affect the supply that is the solution."
Addressing the possibility that a peace agreement with the Palestinians could help the economy, Flug said, "The potential of a diplomatic settlement for helping growth is clear, and it's also clear that a settlement could have helped. I don't make recommendations in this matter to the prime minister, but it's obvious that there is potential for a substantial contribution to growth."
(c)2014 the Globes (Tel Aviv, Israel)
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