Israel's Finance Minister Feeling the Pressure

Steinitz heatedly explained the reasons why tax on gasoline should not be lowered, and what happened? Netanyahu decided to play people's favorite and lowered the gas tax by 15 agorot per liter.

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One might suspect that Finance Minister Yuval Steinitz is a masochist. Otherwise it's hard to explain what happened yesterday, went he went on air and made a series of statements that would ultimately humiliate him.

Steinitz heatedly explained the reasons why tax on gasoline should not be lowered. He noted that the citizens prefer to pay a bit more on gas than lose sleep over the Iranian nuclear program. He repeated that the gas tax in Israel is among the lowest in the developed world. And what happened?

Prime Minister Benjamin Netanyahu, right, and Finance Minister Yuval Steinitz. Credit: Emil Salman

Two hours later, all his statements were shattered when Prime Minister Benjamin Netanyahu decided to play people's favorite and lowered the gas tax by 15 agorot per liter - even though Bank of Israel governor Stanley Fischer opposed him, as did all the senior officials in Netanyahu's bureau and the Finance Ministry.

This is not the first time this has happened to Steinitz. Netanyahu previously did it to him a month ago, when he went over his head and lowered the price of gas by 10 agorot per liter.

Steinitz has told Netanyahu the price drop is the wrong move, and that no European country is doing likewise. It is a move that is not sustainable; what will happen when sanctions on Iranian oil exports become even tighter and the price of oil rises even more? Steinitz told the prime minister that he should not give in to pressure, because this would lead to other pressure and that a few MKs should not be allowed to run the government.

But Netanyahu is calculating what will happen to his popularity ratings, how the public will perceive him, and whether they will love him or not - and then there's the Shaul Mofaz factor. This is the way Netanyhau works: He sticks his hand out of the window, senses the way the wind blows and decides. The minute a few MKs from Likud frighten him - and there are some protests - and Mofaz proclaims his own popularity, that is enough for him to lose his self-confidence and ignore the economic principles he believes in.

All this is happening even before Netanyahu has announced early elections. So just imagine where we'll be when we have a date. Help!

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