Finance Minister Yair Lapid delivered a stern warning regarding Israel-PA peace talks at an Institute for National Security Studies conference. "If the negotiations with the Palestinians stall or collapse and we enter the reality of a European boycott – even if it's extremely limited – the Israeli economy will falter and every Israeli citizen will feel the pain directly," he said.
Lapid's warning comes on the back of tense exchanges between Prime Minister Benjamin Netanyahu and Economy Minister Naftali Bennett regarding the peace talks.
"If there is no political solution, the Israeli economy will face a dramatic pullback that will substantially hurt the checkbook of every Israeli," said Lapid at the Tel Aviv conference.
Lapid based his talk on a special study prepared at his request by the Treasury Minister. "We cannot accept the boycott option with open arms and we must began a hasbara assault of our own, but let's not fool ourselves – the world listens to us less and less."
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Lapid added, "We must recognize that if the talks fail – and the world believes they failed because of us – it will have a price, and we better know what that price is. If there was to be an economic threat, it is my job to present the economic intelligence."
The Treasury Minister stressed that "the bottom line in the chief economist's study is clear: Israel is an export-based country, and thus particularly vulnerable to outside pressure."
Addressing the possibility of a European boycott, Lapid said: "When you tell Israelis 'European boycott' they think you mean that this year the camembert won't arrive on time. That's not the situation. Europe is our main commercial market."
He stressed, "If there isn't a political solution and we enter the likely scenario – and there are worse out there – in which there is only a 20 percent hit to EU-bound exports and EU foreign direct investments stop – the export sector will take a loss of 20 billion shekels ($5.7 billion) in 2013 terms."
The warning he delivered was harsh: "Production will be hurt by 11 billion shekels ($3 billion) a year and 9,800 workers will be fired immediately."
He further warned the establishment that "Israel today is vulnerable financially far more than it is vulnerable from a security standpoint. The security dialogue lets us forget at times the fact that our military capability isn't a target but a tool, a tool that is intended to help us reach an agreement that will strengthen the Israeli economy and promise its future as the Jewish State."
During his speech the treasury minister attacked Economy Minister Naftali Bennet: "I will note that Minister Bennett's quote that 'a Palestinian state will destroy the Israeli economy' does not stand any professional test we conducted."
Speaking of Defense Minister Moshe Ya'alon, Lapid said: "Minister Ya'alon's quote that 'the alternative to a European boycott is rockets from Nablus, Jenin, and Ramallah on our strategic home front, on Ben Gurion Airport' does not stand up to the test."
Lapid said the Israeli Left has tried to sell this vision over the years, but has found no buyers in the Israeli market. He added: "It's sad, but there will always be terror, and people who believe that Allah or Elohim speak through them will always be there. The Israeli Left tells us we must make peace at any cost – it is wrong."