Finance Minister Avigdor Liberman told Maariv last week that Israel’s credit rating will be jeopardized when presumptive incoming prime minister Benjamin Netanyahu breaks through the budget deficit framework.
Liberman said that he has heard murmurs that this will cause problems and warned that it will actually happen in order to meet all of the coalition partners’ demands that have been listed as the new government is formed.
He further discussed injecting an additional NIS 3 billion into ultra-Orthodox schools, even those which refuse to provide even core studies. He warned against injecting a billion shekels to finance Shas leader Arye Deri’s food stamps.
The finance minister warned that there are no budgetary funds for these demands. If they are given, it will be necessary to dramatically increase the deficit, which is now at zero percent.
Although he is very sorry that they’ll waste funds which were saved with great effort, the fact that Israel is part of the global economy reassures him.
Israel's credit rating will be downgraded
On that note, Liberman highlighted that Israel is now part of the modern global economy and isn’t an isolated island, like North Korea. Still, he’s been hearing rumors that Israel’s credit rating will be downgraded if the economy isn’t treated responsibly.
If this happens, interest rates will jump far beyond today’s level and the economy will start a long slide down a slippery slope.
What else did Liberman have to say about the Israeli economy and Finance Ministry?
Regarding the continuation of the gasoline subsidy (which currently stands at NIS 1 per liter), Liberman clarified that this should continue but a budgetary source will be needed. However, he believes that the decision on the issue should be made by the new finance minister.
On the fate of administrators in the ministry, Liberman instructed Director-General Ram Belnikov to cooperate and convey all economic issues in an orderly manner, saying that he will remain in his position until an orderly transition is made. Nevertheless, Liberman is concerned about the fate of the professional level in the Treasury.
The finance minister also said that the salary agreement with the teachers’ union was approved and that in order to finance it, the cut in the budget of the ministries should be implemented – as long as the state budget has still not been approved.
According to the current schedule, he doubts it will be possible to approve the 2023 budget by the second and third reading in March 2023 so it will be necessary to postpone approval until next summer.
Liberman said that in this state of affairs, it won’t be possible to implement moves involving budgetary expenditure that don’t appear in the 2022 budget – such as the Pension Law, which has already passed the first reading in the Knesset, and the wage agreements in the public sector, which were supposed to be signed at the beginning of 2023.