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The spat between the director-general of the Defense Ministry and the Finance Ministry's accountant general has reached new heights. Director-general Amos Yaron sent a sharp letter of complaint against Nir Gilad, the accountant general, to the Civil Service Commissioner. Gilad hit back with a letter of his own, detailing what he called Yaron's "basic falsehoods" and calling for him to apologise.

The letters are simply the outward signs of an earthquake rumbling through the corridors of power in the defense establishment and the treasury over the size and control of the defense budget, and over the very nature of democracy in Israel.

"The Defense Ministry's budget is different from that of all other ministries," wrote Yaron. "It has always been a budget framework, on the assumption that only the army knows how to allocate its budget." Yaron promised that this will always be so. But that is the very root of the problem.

After years of fighting, the treasury has finally moved the government to appoint an external accountant for the Defense Ministry, as is common practice for other ministries. The defense establishment sees this as a declaration of war. "This will not happen," Yaron wrote in his letter. "I will use all legal means to prevent the appointment of an external accountant." And what about the government's decision, I ask. Yaron shoots from the hip: "They, the treasury, stole that decision because the defense minister did not support it in the cabinet, while every proposal by the finance ministry was accepted. It was agreed that there would be another discussion on the matter."

But why does every ministry have an external accountant except for the defense ministry, I press on. "Because the Defense Ministry is strong, while all the others are weak," Yaron replies. "Therefore, the Defense Ministry is the only one that can do things. When they decide to construct a security fence, we will get it done in 10 months, while if it had been given to the Housing and Construction Ministry it would have taken 20 years!"

On the budget cuts, Yaron has this to add: "It is out of the question to cut NIS 6 billion from our budget in one year, a non-starter. There will be a new government in February, and then we'll see." In other words, the director general of the Defense Ministry does not accept decisions from the government today. Nor does Defense Minister Shaul Mofaz. As Nir Gilad put it, "The Defense Ministry has chosen to ignore the government decision to cut the budget." Yaron volleys back: He [Nir Gilad] wants to control the defense budget but he cannot. Nor can his replacement. They do not have the wherewithal."

When asked why he does not implement the government's decision to raise health insurance payments from career army personnel to 4.8 percent of wages, Yaron says that this decision was also hijacked by the government and that first and foremost the army should be taken into consideration.

In other words, this is not only a budgetary problem, it is a problem of democracy. The reality is that we are living in an army with a state, not vice versa. There is a name for places where defense ministries disregard government decisions: banana republic.