Towards a compromise? Source: There will be an addition to the defense budget, the deficit will decrease

September 14, 2014   

The meeting between the Prime Minister, the Minister of Finance, and the Governor of the Bank of Israel ended without results, but sources who participated in the discussion say that the Treasury's position has become more flexible and is beginning to move toward Netanyahu. Before the meeting, Treasury representatives presented tough positions regarding the addition to the defense budget and the size of the deficit, but during the discussions it became clear that the Treasury's positions are more flexible. As for the defense budget, the Treasury's official position is that an addition of 2.5 billion shekels will be given, but according to sources who attended the discussion, it was understandable that the Treasury understands that this is only the initial number and that there will be agreement to give a larger budget addition to defense. Also with regard to the deficit, it turns out that the Treasury's position is not final and that the rate of 3.18% is not sacred and can be changed. For his part, the Prime Minister did not bother himself with numbers. Netanyahu repeated that a formula must be found that will provide a response to security threats and a deficit that does not endanger the economy, that is, one that will not lead to a downgrade of Israel's credit rating. In the coming week, additional meetings will be held between the professional teams and between the Prime Minister, the Minister of Finance, and the Governor. Senior security official: "We need money to hit terrorists"" After the Finance Ministry emphasized today that an increase will be given to the defense budget but without raising taxes, a senior defense official claims that the state budget is "an eye-catching exercise that is completely disconnected from reality." The official claimed that despite the Finance Ministry's promises, "in practice this is not an increase but an overall budget that is lower than the defense budget for 2014, not including the expenses for Operation Protective Edge. The Finance Ministry is betting on the security of Israeli citizens and thinks that this is a game. This is irresponsibility of the highest order.""