Israel’s budget sham

Prime Minister Benjamin Netanyahu is lying to the public when he attributes his insistence on a one-year state budget to economic considerations. His steps are dictated not by the desire to solve the economic crisis, but rather by the desire to dissolve the government. For him, the budget is the only escape hatch from his promise to rotate the premiership with Benny Gantz. He is refusing to sign off on a two-year budget in order to break that promise. Netanyahu is not sacrificing the government in order to save the economy, he is sacrificing the economy in order to remain in power.

A member of his inner circle who weighed in recently on the budget crisis said that Gantz was “playing poker without cards.” It would be more accurate to say that Netanyahu is gambling with money he doesn’t have. The multinational credit rating agencies have not yet cut Israel’s rating. They did not respond to the failure to push through a budget over the course of three election cycles, trusting the promises that the new government would approve the budget and that the only exceptions would be those necessitated by the coronavirus pandemic.

It now turns out that these were false promises: Netanyahu’s Israel is fleeing from a budget and searching for an additional election adventure. It is breaking all of the budget guidelines and apportioning money in a populistic manner. The loss of trust in Israel’s promises could cost it a reduction in its credit rating.

• Political Chaos Looms as Israel’s Deadline for Passing Budget Nears
• Israel’s Credit Rating Is in Jeopardy Amid Growing Debt and Budget Delays
• Coalition Spars Over One or Two-year Budget, and Israel’s Economy Waits

Netanyahu claimed Monday that a two-year budget “is the exact opposite of what we need to do.” He even warned that it would lead to funding cuts, at a time when he wants “to keep the money flowing to citizens.” Contrary to Netanyahu’s demagoguery, Israel is not at a junction where it must choose between a one-year or a two-year budget, since 2020 is nearing its end. More than a dozen senior economists signed an open letter last week calling on the government to pass a budget for 2020-21. Its signatories included Elhanan Helpman, who was awarded an Israel Prize in economics, and former Bank of Israel governor Jacob Frenkel. Finance Ministry accountant general Rony Hizkiyahu announced last week that he is stepping down early as an act of protest.

After he dragged the country through three elections in a bid to avoid prosecution and managed to break the political deadlock by forming a fictitious unity government, Netanyahu is now getting ready for a fourth round in order to avoid ceding the premiership to Gantz as their agreement stipulates. Without shame, he brazenly breaks the agreement, stealing time in power as a temporary prime minister. Netanyahu is acting contrary to his own economic logic, contrary to the advice of economic experts and now he is also jeopardizing Israel’s credit rating. But what does Israel’s future matter to a person whose only concern is his own survival.

The above article is Haaretz’s lead editorial, as published in the Hebrew and English newspapers in Israel.