Statement by Prime Minister Netanyahu and Finance Minister Steinitz
(Communicated by the Prime Minister's Media Adviser)

Prime Minister Benjamin Netanyahu and Finance Minister Yuval Steinitz issued
the following statements after their meeting this morning (Tuesday, 26 June
2012):

Prime Minster Netanyahu: "I have decided to adopt Finance Minister
Steinitz's recommendation on the deficit outline. I think that we will also
maintain fiscal responsibility and a responsible and real economic framework
for the State of Israel. But, of course, we will need to adopt a series of
steps that the Finance Ministry will submit to us in order to ensure that
this framework will indeed take place. In so doing, we will maintain
important national programs such as blocking the entry of infiltrators and
the free education law that we will apply in another two months."

Finance Minister Steinitz: "After a long series of discussions at the
Finance Ministry, with the participation of Bank of Israel and Prime
Minister's Office representatives, I have decided to update the 2013 deficit
target to 3%.

Following the sharp slowdown in Europe, we have a decline in state revenues
in Israel; therefore, we must update the deficit target. This is still a
challenging and conservative deficit target that is lower than in most
Western countries and we will need to make an effort over the coming weeks
to submit steps to the Government in order to meet this deficit target.

We also decided to set long-term deficit targets – lowering the deficit to
2% by 2016 and 1.5% by 2019, and to maintain the original goal that we
decided upon, which is the most important, of lowering Israel's debt-to-GDP
ratio to around 60% in 2020. In the coming weeks, we will present a plan to
meet these targets.

I also met with the Prime Minister yesterday evening and I received his
agreement to submit this decision for Cabinet approval on Sunday, July 1."