Ultimate magazine theme for WordPress.

Israel’s governing coalition passes its first budget in three years

0 8

Israel’s parliament passed its first national budget in three years after a marathon overnight voting session, averting snap elections and proving the resilience of an unwieldy coalition government.

The 61 members of the eight-party coalition voted through the $194bn budget for 2021 — eleven months into the year — despite 780 challenges from the opposition, trading barbs with former prime minister Benjamin Netanyahu until 5am.

The vote restores normality to Israel’s finances after three years of political gridlock, where the passage of budgets had been tied to various coalition agreements. The Knesset will reconvene on Thursday to vote in the $183bn budget for next year.

Netanyahu allowed a previous government to collapse a year ago by holding off on passing a budget, which would have advanced a clause that handed the premiership to his then coalition partner Benny Gantz.

Avoiding that official budget also allowed Netanyahu and his allies in the finance ministry to push through ad hoc stimulus packages during the coronavirus pandemic, which led to an exodus of senior officials from the Treasury and elsewhere.

At the same time, the lack of any formal budget left ministries and local governments receiving their budgetary allotments on a month-by-month basis and unable to make multiyear plans.

“Thank God, we passed a budget for Israel,” Prime Minister Naftali Bennett tweeted. At one point in the late night drama, Netanyahu accused the finance ministry of transferring money to Hamas, the Islamist group that controls the Gaza Strip.

On Thursday, Miki Zohar, head of the opposition and a Netanyahu ally, said the Likud party that is the largest in parliament would withdraw its objections to the 2022 budget if it was allowed to examine the spending on Israel’s Arab citizens to ensure none of it was diverted to Hamas.

“The answer is no,” foreign minister Yair Lapid, who has corralled the governing coalition, said in reply. “Good to see the long night hasn’t ruined the opposition’s sense of humor.”

The marathon overnight budget vote was widely seen as a rebuke to Netanyahu, who has been trying for weeks to chisel away a single member of the ruling coalition, which is governing on a razor-thin majority, in order to trigger new elections.

His failure to do so underlined the durability of a coalition that stretches from the far-left to the hard-right, and is anchored by an Islamist party that has won major spending increases for the traditionally underserved Arab minority.

Underlining the symbolism, Bennett told the 120-seat Knesset before the vote that it was “the most important moment since the government took office. After three and a half years of insanity, terrible administration and paralysis, years in which the budget was a pawn in personal game.”

Avigdor Lieberman, finance minister, is seeking to rein in deficit spending after pandemic related spending led overall government debt to swell by a fifth to just over 72 per cent of gross domestic product. The 2021 budget will target a deficit of 6.8 per cent, and the 2022 budget will try and reduce that to just under 4 per cent.

Israel’s economic recovery has been driven by billions of dollars of venture capital inflows into the technology sector, while unemployment has yet to return to pre-pandemic levels.

The central bank expects economic growth at 7 per cent this year and about 5.5 per cent on 2021, buoyed by strong foreign investment inflows.

Leave A Reply

Your email address will not be published.