Israel's Foreign Ministry Paralyzed After Treasury Freezes Budget

Israeli diplomats abroad have been ordered to put any plans for new spending on hold due to a major budget deficit

Israel's Foreign Ministry building, Jerusalem, 2018.
Olivier Fitoussi

On the orders of the Finance Ministry’s comptroller general, Foreign Ministry budget activity has been frozen and Israeli diplomats abroad have been ordered to put any plans for new spending on hold due to a major budget deficit.

A diplomatic cable obtained by Haaretz on Sunday instructs Israeli diplomatic missions around the world to immediately refrain from any work-related travel as well as “initiatives and steps related to new contractual relationships.”

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Israeli missions abroad have also been told to put a hold on fees paid to outside consultants, overtime pay and entertainment expenses.

Reacting to the exceptional spending limits, senior ministry officials said it was coming at a particularly sensitive period in which Israel was facing diplomatic and strategic challenges, including most notably threats from Iran and its allies and just prior to the United Nations General Assembly meetings in New York later this month.

The Foreign Ministry said in response: “There is no disputing that the deep deficit, which we have been warning about from morning ‘til night, is the result of underfunding that the Finance Ministry’s budget staff knew about in advance. This is an unprecedented case of Finance Ministry staff paralyzing a government ministry without any discussion, and in the process causing serious damage to the foreign relations of the State of Israel.”

Foreign Minister Yisrael Katz is working to find a solution to the problem, the statement added.

The Finance Ministry attributed the problem to a shortfall between the budget allocated to the Foreign Ministry and the actual costs of activity. “[As a result,] the Finance Ministry was forced to order a halt to all new expenditures by the Foreign Ministry,” the statement said. As part of ongoing negotiations, last week a proposal was submitted to the Foreign Ministry that “will make continued operations possible,” the Finance Ministry added. At this time,”the ball is the court of the Foreign Ministry’s management.”

About two months ago, the heads of Israeli diplomatic missions abroad complained about a grim situation that they said they were facing due to 350 million shekels (about $100 million) in cuts in the Foreign Ministry budget. There is no funding for a train ticket or even a cup of coffee for working meetings, they wrote in internal cables sent to senior ministry officials in Jerusalem.

At the same time, the diplomatic staff declared a labor dispute over what they said were plans to hurt their employment conditions.