“Israel’s” Calcalist: A Multi-front War Will Lead to Economic Catastrophe

The site said: “Everything is linked to each other: “The end of the war in Gaza, the return of the prisoners, Hezbollah's attack on the north and perhaps also Iran's strong response.

“We seem to be facing two extreme scenarios: The first is a truce scenario and the second is a war scenario that may turn into a full-scale, multi-area war,” it added.

 According to the website, these two opposing scenarios have very large implications for “Israel” in terms of growth, deficits, debt, employment, the status of hi-tech “Israeli” industry and every possible economic aspect.

 It is not certain that “Israel” has prepared for the worst-case scenario, if it is generally possible to prepare for it. However, we can try to understand where the “Israeli” economy could deteriorate.

Prof. Tzvi Eckstein, former Bank of “Israel” deputy governor, said: “Regardless of al-Sinwar's fate, what matters is a ceasefire and potential prisoner exchange.”

He further stated, “the scenario of an Iranian and a Hezbollah threat in which all airplanes stop flying to “Israel” is a terrifying one, there are no assumptions about it.”

He continued: “We are talking about a scenario of rockets on the north up to Haifa for a month and a half.

He also noted that in this scenario there will be a decline in output to 2.5 percent, while output debt reaches 75 percent of GDP, and a significant decline in “Israel's” credit rating.”

The scenario that worries Eckstein, and should worry all “Israelis,” is the multi-country one, which he calls the “horror scenario.”

According to him, the name is intentional: “because it involves rockets on “Tel Aviv” and a flight stoppage.

This is a scenario from which it is not clear how we will emerge. It's a dangerous crossroads. The problem is that it's not clear what Prime Minister Benjamin Netanyahu wants. It's not clear where this government is taking us,” he concluded.