Lapid slams Likud for blocking budget

OECD sees Israel's economy recovering.

By
November 25, 2014 19:21
2 minute read.
Yair Lapid

Finance Minister Yair Lapid. (photo credit: MARC ISRAEL SELLEM/THE JERUSALEM POST)

Finance Minister Yair Lapid slammed the Likud for opposition to his budget plan on Tuesday, saying it is too involved in politics to worry about society.

“As soon as the Likud started worrying about the central committees, it stopped worrying about society at large,” he said at a speech at the Sderot Conference for Society at Sapir Academic College.

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A series of coalition crises have left Lapid struggling to pass the budget. If the Knesset does not pass a budget by the end of the year or grant itself a short extension, new elections will be triggered automatically.

“They are so disconnected that they will lead to totally unnecessary elections and are blocking the budget for three weeks already; while the streets of Israel are burning, violence is running wild, and citizens are unable to make ends meet,” Lapid said of his fellow politicians.

In his speech, Lapid defended his plan as a “social budget,” reiterating that it does not raise taxes or increase spending in fields such as education, health, and welfare.

Recent economic headlines have reflected badly on the Finance Ministry. The economy shrank in the third quarter for the first time in five years, though mostly as a result of the summer war with Gaza. Then, credit ratings agency Fitch lowered the outlook for Israel from positive to stable, indicating that Israel’s “A” rating is no longer likely to improve in the coming years.

The OECD on Tuesday came out with somewhat rosier projections.

“After a pronounced but temporary weakening in 2014, growth is projected to rebound to about 3% in 2015 and 3½ per cent in 2016, which should avert any rise in unemployment,” the OECD said in its growth forecast for Israel on Tuesday. The Bank of Israel has projected 2015 growth at 2.8%.

The forecast also seemed to give Lapid support by saying that the “pause in fiscal consolidation in 2015” – a reference to Lapid’s decision to raise the deficit ceiling for the year – would help support the economy.

The Bank of Israel has argued for a lower deficit and redirecting spending toward social ministries such as education, health, and welfare.

The OECD concurred that, when Israel returns to its stricter deficit path in 2016, “civilian budget expenditures, notably already relatively low in education and social spending, should be protected from cuts as much as possible.”


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