Editorial

Israel's Budget Chief Sounds the Alarm

Haaretz.
Haaretz Editorial
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Shaul Meridor gives a lecture at a conference in Tel Aviv, November 2019.
Shaul Meridor gives a lecture at a conference in Tel Aviv, November 2019.Credit: Tomer Appelbaum
Haaretz.
Haaretz Editorial

Sunday’s resignation by the Finance Ministry’s budget director, Shaul Meridor, is additional evidence of the ministry’s reckless conduct under Finance Minister Yisrael Katz, and more generally, of the dangerous populism that has grown like a weed under Prime Minister Benjamin Netanyahu.

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“You aren’t enabling me and many other civil servants in Finance Ministry departments and those of other government ministries to do what we know how to do,” Meridor wrote Katz. He objected that “the decision making process has been characterized by decisions influenced by narrow, irrelevant, short-term interests as well as the silencing of professionals, blatant contempt for professional staff work, shooting from the hip and riding roughshod over budgetary rules and tools.”

And indeed, Katz has been running the treasury like someone preparing for a primary rather than someone responsible for the public purse. His latest moves – first adding 11 billion shekels ($3.3 billion) to the continuation budget, then making additional expenditures in the framework of the emergency budget – crossed red lines so blatantly that Meridor was unwilling to accept it.

Even though he’s considered a strong, centralized finance minister, Katz isn’t acting solely on his own initiative. He is subordinate to a prime minister who’s preoccupied with his political survival and, for the sake of achieving this goal, is willing to damage the Holy of Holies of the Israeli economy – the budget framework. Under Netanyahu’s reign, through the finance minister’s agency, the budget law has essentially been emptied of content. The budget ceiling has been exceeded time after time, while the deficit and the national debt have lost all importance. Even the fear that Israel’s credit rating will be lowered seems to have waned. Billions of shekels in spending are determined by Netanyahu’s personal caprices based on what will serve his narrow interest of influencing public opinion.

One example of this recklessness happened just recently, when Netanyahu and Katz announced on social media that they planned to hand out a billion shekels through another pointless grant. The cabinet should have discussed the grant, but it wasn’t at all clear that it would approve it. Consequently, Katz decided to join forces with members of the Knesset Finance Committee to approve the grant without the cabinet doing so first. This circumvention wasn’t accidental. Both Netanyahu and Katz knew the cabinet wouldn’t support another populist grant that doesn’t solve the unemployment problem, but is merely a kind of election bribe.

This spendthrift behavior is sending Israel 35 years back in time, to the dark days before the Economic Stabilization Plan of 1985. Meridor’s resignation, and especially his harsh remarks in his resignation letter, ought to set off alarm bells among all Israelis, since they are the ones who will likely pay the heavy price of this recklessness. Katz isn’t fit to be finance minister. And Netanyahu has proven once again that he isn’t fit to be prime minister.

The above article is Haaretz’s lead editorial, as published in the Hebrew and English newspapers in Israel.

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