Bank of Israel Governor Stanley Fischer told Channel Two on Friday that the Israeli economy is prepared in case war breaks out with Iran.

"The foremost responsibility of any country is the security of its citizens," Fischer said responding to a question about Iran. "If there is a need to take money and spend more on defense, then that simply is what will have to be done, and we will have to pay for it... Scenarios in which Israel faces all-out war would be very difficult to deal with. We are preparing to face a real crisis."


Asked if he felt responsible for the deteriorating economic situation facing Israel, and whether he should have presented a "less rosy" picture to the Israeli public in recent months, Fischer said: "It's not that we are not facing a crisis today. What is happening is that we are acting responsibly" to prevent a crisis in the future.

Earlier this weer, the Knesset approved the Bill to Shrink the Deficit and Deal with the Repercussions of the International Economic Crisis, a robust package of budget cuts and tax hikes. The move drew sharp condemnation from across the political spectrum, and a number of organizations and movements held demonstrations against the decision.

Fischer complimented Prime Minister Binyamin Netanyahu and Finance Minister Yuval Steinitz for their "courageous" economic moves. "We must give credit to the finance minister and the prime minister, who are doing something that very few leaders in other countries are doing, by taking care of a problem that they see on the horizon. And they are doing so before an election," he said. "This is courageous policy. And for this we must give them credit."