Without Anyone in Charge, Israel’s Economy Is in Danger

Haaretz Editorial
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Shaul Meridor at an economics conference, December 31, 2019
Shaul Meridor at an economics conference, December 31, 2019 Credit: Tomer Appelbaum
Haaretz Editorial

Shaul Meridor, the head of the treasury’s budget division, resigned last week and made some tough accusations against Finance Minister Yisrael Katz, spurring a momentary debate on the relationship between politicians and the officials who serve them.

It’s certainly an important debate, and personal issues regarding the Meridor family and their original political home are also interesting. But we mustn’t let this noise contradict a basic inconvenient fact: Israel has been operating without a state budget since 2018.

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In such a situation, the state ostensibly has a measure that limits government spending and sets a framework. But since the onset of the coronavirus pandemic, this would-be strict tool hasn’t been relevant because the government has adopted a system of boxes to bypass the restrictions – target budgets for coronavirus matters, security matters, education and various other issues.

This has sown confusion and has even provided a temptation for populist decision-making. This state of affairs stems from a “once in a century” event, but because of the tens of billions of shekels being poured into the handling of the coronavirus crisis, thorough work is necessary to prevent the exploitation of the boxes, and particularly to think about the day after, which has already come.

Nothing of the sort is being done now, and that’s the message of Meridor’s letter to the finance minister. While Meridor has already moved out of his office and disappeared in search of a future in the private sector, it’s not only about him.

Even the accountant general, Rony Hizkiyahu, who announced his resignation at the end of July, has had enough regarding the government’s handling of the budget. The departure of him and Meridor under these circumstances raises fears that the government prefers those who nod yes to every whim of the finance minister and Prime Minister Benjamin Netanyahu, not brave and honest professionals.

Israel is in the throes of a health, economic and political crisis, and on a slippery slope that requires checks and balances more than ever. Netanyahu prefers to perpetuate a sense of emergency that allows him to demonstrate leadership.

But such an emergency requires planning and implementation capabilities, and for the politicians to set clear priorities. The coronavirus crisis is far from over, and its handling may lead to another lockdown that will worsen the economy and require another budget increase.

This situation finds the Finance Ministry without a state budget for this year or next, and without anyone in charge of the budget, not even the accountant general. Nor are any preparations being made for a budget. This amounts to a serious failure.

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

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