BICOM

Israeli leaders have responded to the UK’s decision to leave the European Union (EU), concluding that there is unlikely to be any specific impact on Israel beyond the wider global economic implications.

Speaking to his cabinet yesterday morning, Israel’s Prime Minister Benjamin Netanyahu said: “There is no direct effect [of the vote] on Israel apart from the fact that we are part of the global economy. Over the weekend I held a discussion with the Finance Minister, the Governor of the Bank of Israel… I can say one thing: The Israeli economy is strong… to the extent that there is some effect, it is not expected to be strong, other than unrest in the global economy.”

Israel’s Finance Minister Moshe Kahlon sent a similarly reassuring message. He said that Israel’s economy is in a good position, but that “we will continue to follow developments closely and react accordingly, if necessary”. Kahlon added that a 24-hour situation room had been established to this effect.

Meanwhile, UK Ambassador to Israel David Quarrey said that the referendum is unlikely to impact the strong UK-Israel relationship. He told Channel Two, “I don’t think that things will change very significantly.”  He added: “We have been a friend of Israel in the EU, we’ll be a friend of Israel outside the EU, but Israel’s relations with the EU in the future will have to be determined without Britain at the table.”

The Tel Aviv Stock Exchange (TASE) dropped yesterday by 3.1 per cent, in the first day of trading since the referendum. However, this was a comparatively minor shift compared to other stock exchanges on Friday. Meanwhile, Israel’s government bonds increased in value by 2.5 per cent. The chief economist of Israel’s Finance Ministry Yoel Naveh predicted that even a permanent depreciation of the pound would have a negative impact of less than 0.1 per cent on Israeli exports. Britain is Israel’s second largest trading partner by country, while the EU represents Israel’s largest single trading partner.