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The Israeli government looks likely to end the year 2007 with a handsome surplus of NIS 7 billion to NIS 10 billion, according to the treasury's latest calculations.

Tax revenues are running well above the government's estimate when compiling its budget for the year 2007. Meanwhile, spending remains on track with plans. The result is a surplus.

Analysis of the state's income in the first four months of the year shows that the surplus could be as high as NIS 10 billion.

The treasury has yet to think what it might do with the windfall. One reason it has no plan, is that it basically has no finance minister. Finance Minister Avraham Hirchson is preoccupied with being interrogated by police over sundry suspicions of embezzlement, fraud and so on.

One strong possibility however is to use the money to reduce Israel's mountainous debt. Usual debt-to-GDP levels in the west are around 60%-70%, while Israel's is closer to 90%, costing taxpayers vast annual interest payments - tens of billions of shekels a year - in service to the debt.

Another possibility is that the treasury will choose to accelerate its plans for tax cuts. That plan might be stymied by the Bank of Israel, which feels that the ministry has done enough to reduce tax levels, after three reforms. Israeli tax levels are close to the norm in OECD countries, says the central bank: that's plenty.

The central bank, headed by Governor Stanley Fischer, is wholeheartedly in favor of reducing Israel's debt, which (to be specific) is 87% of GDP.