Israel faces 'serious challenges'

Israel's central bank governor Stanley Fischer who is to step down from his post early, said on Wednesday he was leaving the economy in good health but warned of "serious challenges" ahead. "I'm leaving the economy in a good place, but there are serious challenges ahead including the adoption of a budget to ensure stability while reducing the deficit at a reasonable level," Fischer said at a press conference. Asked about reported differences of opinion with Israeli Prime Minister Benjamin Netanyahu, Fischer told military radio that he had "confidence in the prime minister's financial management, he knows the issue well." "Our decisions on economic questions were always highly professional and I'm sure that would have continued if I had stayed on," he told reporters, saying he was leaving the central bank "in a better condition than I found it." Fischer said Netanyahu had asked him to stay on in his post, but that that he had declined. He will end his term in office on June 30, two years before the end of his second five-year term. "I agreed to stay until June, which is to say after the budget is adopted," he said, confirming reports he had turned down a request from Netanyahu to serve as finance minister in Israel's next coalition government. Fischer, 69, is credited with having steered an economic "miracle" in Israel despite the global downturn. In 2011, he put himself forward as a candidate to replace Dominique Strauss-Kahn as head of the International Monetary Fund but was ruled ineligible because the post carries an upper age limit of 65.