Israel faces threat of yet another round of elections over budget disputes
Rating agencies have cautioned that further budget delays would raise concerns about Israel’s ability to implement prudent fiscal policies and could affect credit ratings
Reuters | 14:16 21.10.2020
A festering government crisis over passage of a national budget could push Israel into its fourth election since mid-2019, further straining an economy hard hit by the coronavirus pandemic. Crunch time is approaching: Prime Minister Benjamin Netanyahu's bickering coalition, patched together in May, has by law until Dec. 23 to pass the 2020 budget, a move held up by political stalemate and successive national ballots.
Street ProtestsThree top finance ministry officials have already quit, in a sign of frustration over the budget bickering. Israel is still using a pro-rated version of the 2019 budget. The power-sharing accord between Netanyahu and Gantz stipulated Israel would pass a biennial budget for 2020 and 2021 - a de-facto insurance policy for a smooth transition of power. But with Netanyahu's trial over alleged corruption, which he denies, due to resume in January, a fresh ballot next year could delay proceedings. A renewed mandate gained by Netanyahu at the ballot box might help supporters promote legislation to freeze his trial. "Forget the pandemic, forget the economy, forget everything. Netanyahu wants to survive," said Reuven Hazan, a political scientist at Jerusalem's Hebrew University. "We're basically in the hands of one person." But another election soon would be risky for Netanyahu, even as he hails the economic potential of agreements on formal relations with United Arab Emirates and Bahrain. "The budget by nature is political. But it's normally political with a sense of responsibility," said former Bank of Israel Deputy Governor Nadine Baudot-Trajtenberg. "Now it's political with no sense of responsibility. And that's what's so worrisome." A spokesman for Netanyahu declined to comment and a Likud spokesman did not respond to a request to comment. Street protests calling for Netanyahu's resignation have become commonplace. Opinion polls show only about 30% of Israelis believe he has handled the health crisis effectively, while Likud may lose a quarter of its parliament seats in an election.