Mitrache, Leumi: Lack of orders from state is apparent

Orders from the state would be the only way for private companies to resume operations amid continued low consumption as far as the population is concerned, says Laurentiu Mitrache, CEO of Bank Leumi, a small bank held by the largest Israeli financial group.

"Only state consumption has got the ability to encourage private consumption, even at the risk of higher inflation. We have five clients with vehicle fleets of over 120 lorries that have not moved in a year," Mitrache says. Under the circumstances, it is obvious that the non-payment of loan instalments has nothing to do with ill will, but to firms genuinely not having the money any more. Even when the state does place orders, payment is late, which contributes even further to the arrearage. In the first two months of the year, the state's capital spending amounted to a mere 1.59 billion RON (nearly 390 million euros), down 34% against the similar period of 2009. Mitrache believes the population is already overindebted, so a rebound is unlikely to be encouraged by private consumption.