Netanyahu Sounds a Fiscal Note at NIS 50-bill Launch

Calls for fiscal discipline and higher defense spending to preserve value of new NIS 50 bill.

Prime Minister Benjamin Netanyahu used Wednesday’s launch of the Bank of Israel’s new 50-shekel note to take a tough line on the 2015 budget.

“In order to ensure that this note preserves its value, we need to ensure our security and our economy,” Netanyahu said at a ceremony at the central bank’s Jerusalem headquarters. “We need to increase defense spending, because of Operation Protective Edge, but we also need to care for the economy. These things come together through a deficit that’s under our control and won’t destroy us.”

Bank of Israel Governor Kranit Flug expressed concern that delays in getting the budget approved might leave Israel entering 2015 without a spending package, which under law would mean that the treasury allocates money on a month-by-month basis, using the 2014 budget.

Netanyahu and his finance minister, Yair Lapid, are engaged in a battle over how to fund the extra 11 billion shekels ($3 billion) demanded by the defense establishment for next year and how much to allow the fiscal deficit to grow. The standoff has delayed the first cabinet meeting on the budget, which usually takes place in June, even though the Knesset will need to get the budget legislation by November 1 if it is to approve it in time for 2015.

The new 50-shekel note, which is worth about $13.80 at the current exchange rate, features the visage of the poet Shaul Tchernichovsky in place of the author S.Y. Agnon. It officially goes into circulation next Tuesday, but the old Agnon bills will still be legal tender for another decade.

The Bank of Israel said the security and accessibility features of the new, green-and-white banknote are “among the most advanced in the world,” with state-of-the-art anti-counterfeiting technology and special features to aid the blind and vision-impaired.

“Developments in the field of banknotes, the increase in counterfeiting and the technology employed today by counterfeiters require the bank to raise the standards of its banknotes to meet the challenges of the coming years,” said Flug.

Despite the advanced technology, the central bank warned that not all automated teller machines had been adjusted to accept the new bills and urged operators and importers to ensure they are by next week..

The 50-shekel bill is the first of a series of new notes graced by pictures of Israel’s leading poets, in place of former presidents. They include a 200-shekel bill featuring a picture of Nathan Alterman (in place of Zalman Shazar,) a 20-shekel bill with the poetess Rachel (in place of Moshe Sharett) and a 100-shekel note with the portrait of Leah Goldberg (in place of Yitzhak Ben-Zvi.)