The heavy price of the next election: “Disaster instability”


The following horror scenario is likely to happen to us soon: Prime Minister Benjamin Netanyahu and his replacement, Bnei Gantz, will continue to clash politically under the guise of a professional debate on the state budget; The deadline for the budget transfer, in less than a month, will pass; The unity government will be disbanded and the State of Israel will degenerate into a fourth election in November, still economically and socially wounded by the corona crisis.

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Having another election can have devastating consequences. Officially, all parties in the political arena oppose going to the polls. Politicians are aware of the public consensus against another round of elections and understand that the people will come to terms with whoever is marked as responsible for dissolving the government.

Netanyahu insists on transferring an annual budget, until the end of the current year. Such a budget, until approved, will be valid for only 3 months. Ganz is still holding on to the position that a biennial budget must be brought for government approval, by the end of 2021, as stipulated in the coalition agreement between the Likud and Blue and White. However, it is no secret that the real debate between an annual and a biennial is not about approving the budget, but rather about canceling it. That is, the reason for going to the polls that will provide an explosion in budget discussions. According to various reports, Netanyahu is positively considering taking advantage of the budget conflict as a window of exit from the unity government that was imposed on him in the previous round of elections.

“Ridiculous to move budget to 3-4 months”

“The question of the budget is political and only concerns the situation of Prime Minister Netanyahu,” former Prime Minister Yossi Kochik, former director general of the Ministry of Foreign Affairs, told N12. There is no doubt that a biennial budget is needed and the fact that this is also what was agreed in the coalition agreement, which was signed a ‘huge’ period of time of two months. The claim that a biennial budget will not fit in the long run is wrong because a biennial budget can be corrected in real time. From the voices I hear, the Ministry of Finance does not currently support an annual budget. ”

The heavy economic price of elections | Photo: N12

If a budget is not approved, the State of Israel of 2021 will have to rely on a budget set as early as 2018, long before anyone imagines the corona plague. Already today, government ministries are operating without an orderly budget for 2020. The current “temporary” budget allows the government to spend 1/12 of last year’s budget each month, which was approved in 2018, and will continue to form the basis for the 2021 budget in an election scenario.

“Elections are a catastrophe when there is no budget,” Kochik explains. “Once there is no budget, there is no ability to move anywhere. It disrupts all those hundreds of actions that the government has to take in the areas of health, education, transportation and more. Continue to cut a budget of 1/12 from previous years, “In addition, the budget is not synchronized to the corona period, which requires additional investment in vocational training, welfare, health, etc. At present, the government promises funds to care for the corona not from the state budget, but there are economic damages that will not be felt immediately.

“It’s hard to find more failing governments than ours”

Prof. Eyal Winter, from the Department of Economics at the Hebrew University, also does not sound optimistic about the near future. In an interview with the N12, he says: “It is difficult to find more failed governments than we have, both economically and in the treatment of Corona. If we go to another round of elections, will they have a different result? After all, a long period of temporary government , And even worse.

“All the options we have at the moment are bad. The only positive scenario is that the political system will organize in a different way and appoint an alternative leader for Netanyahu, from the Likud or another party. Such a leader who will lead to a different result, “Winter says.

Winter explains that the real damage to the economy that lies in the dissolution of the government does not lie in the cost of the election campaign itself, which alone is estimated at several billion shekels. “The economic consequences of going to the polls stem first and foremost from instability. It is instability at the level of disaster. In a temporary government, the state has no patron, no one takes responsibility and no balances. The state of the employment market will worsen, and if that is not enough, Israel’s credit rating may decline “.

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