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Israel Finance Min. promises new budget by December

Israeli Finance Minister Yisrael Katz has vowed that the long awaited 2021 state budget would be ready by December, amid allegations of deliberate government delays for political reasons and the resignation of a third senior economic official in three months.

Tensions over the 2021 budget has again threatened to topple Prime Minister Benjamin Netanyahu’s fractious emergency government he formed with his rival, Alternate Premier Benny Gantz, to help the country cope with COVID-19.

Inability to pass last year’s budget was a major contributor to deep political turmoil in the country that resulted in three elections in a year, the last one held in March.

According to a statement sent TV7 by the Blue and White party headed by Gantz, he sent a “sharp letter to PM Netanyahu” last Thursday in which he “continued to insist upon a 2021 budget, consistent with the coalition agreement.” Moreover, the Alternate Premier “pointed to the catastrophic economic and social repercussions of the absence of an operational budget and suggested that any attempts to prevent it from being passed are rooted squarely in considerations of the personal benefit to the PM over the pressing needs of the country.” He also called on Netanyahu “to instruct the Finance Ministry to propose a budget and broad economic plan for government approval by December and urged Netanyahu to begin holding regular government meetings, and to promptly move government appointments forward to enable the government to begin functioning on behalf of the Israeli people during this time of emergency.”

Finance Minister Katz maintains that the 2021 budget is now being prepared, with discussions in the coming days to determine budget goals and targets. In a statement, he said it would “address the need to deal with the continuing coronavirus pandemic as well as the need to lead the economy back to full employment and activity and growth,”

Israel’s economy has been hit hard by the coronavirus pandemic and expected to contract this year for the first time in nearly two decades. The country is still using a pro-rated version of the 2019 budget, although the Knesset has approved more than ₪100 billion Shequels ($30 billion) in state aid to help businesses and households that have been economically impacted by the disease.

Shortly prior to the promise from Katz, the Director General of the Finance Ministry Keren Turner-Eyal declared she would be leaving her post. No reason for her departure was given, but Turner-Eyal had clashed with Katz over the best ways to protect the nation’s economy during the pandemic.

Turner-Eyal was appointed to the post in May by Katz, after Shaul Meridor stepped down in August over claims that the government was grossly mishandling fallout from the coronavirus crisis by making “short-sighted” decisions and ignoring economic norms. Turner-Eyal tweeted support for Meridor when he was subsequently criticized for his comments by public officials, to which Katz publicly said she was out of line.

A source identified as close to Turner-Eyal was cited by Channel 12 news as saying that she complained that “the decisions the Finance Ministry are not made in a proper way. There are no professional and thorough discussions. There are only decisions coming from high-up – the Prime Minister’s Office.”

Rejecting those allegations, Katz said today that, “any attempt to create an image of disintegration is political, biased and is removed from reality,” while insisting that, “all discussions in the Treasury are professional and respectful and, I as the Minister in charge, ultimately set the policy and the role of the officials is to execute it.”

Tax Authority Head Eran Yaacov has been named by Katz as Interim Director General of the Finance Ministry.

Adding to the flurry of resignations from the Finance Ministry was Accountant General Rony Hizkiyahu, who announced his intention to leave later in 2020.