Netanyahu: "Surrendering to Hamas' demands will not lead to the release of the abductees - but to another massacre"
It's not the stupid economy.
This is the way in which the country was managed in the last decade, which peaked at a historic low in the last quarter of 2023 following a fierce war.
Nor did the war in Gaza cause the international credit rating company Moody's to downgrade the economy with a negative forecast that will not be updated soon.
Although it was not the war that caused the downgrade, but the conduct that followed it.
With the story of the abductees in the background, fear of war in the north and conduct according to Netanyahu's political survival, it is not clear when it will end.
And if these are delayed, there may be a political upheaval if the state camp separates from Netanyahu.
All of these caused the first historic downgrade in the history of the economy.
In the bottom line, it turns out that the stories that Israel's economy is strong were a Grandmaster story.
The State of Israel under the leadership of Netanyahu continued to conduct itself economically as if October 7, 2023 took place in one of the remotest countries in Africa.
Netanyahu continues to conduct himself according to the old politics of October 6.
Netanyahu.
The war is being waged according to his survival needs and it is not clear what the end will be/Government Press Office, screenshot
Israel learns about wars and operations: the first and second Lebanon war, the operations in Gaza and the West Bank.
The credit rating was never lowered because the world understood that this was a temporary event after which the economy would recover and return to growing as it was.
But this time it is a very long conflict that is not handled properly.
The continued flow of coalition funds, the lack of efficiency plans for the government ministries, the lack of growth engines and of course the lack of revenue intended to cover the huge deficit (with the exception of the increase in VAT) which will also only be in 2025.
And if all this is not enough, the Treasury is still trying to spoil and tax the system The banker who is praised by Moody's for her efficient performance. So why destroy it?
What actually went down is not the credit rating of the economy that went down, but the rating of Netanyahu, who in the last decade has been branded Mr. Economy and has since become Mr. Death. Netanyahu and his Finance Minister who have declared several times that the Israeli economy is strong have happened knowingly and spreading Grandmaster stories.
They realized that after a jump of hundreds of billions of shekels in defense spending, the immediate necessity was to raise taxes and create at least the semblance of equal burden-bearing, but they ran away from responsibility in the name of survival. What is actually happening? The deficit jumps to 6.6% of GDP.
Debt-GDP ratio which is the most fundamental measure of the economy's ability to repay is about to jump to 70% and this is only the beginning. The assumptions in the budget regarding the growth of the economy were terrifyingly optimistic.
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Demonstrators protest against Ayalon.
The protest was praised/Ruben Castro
On the eve of the downgrading of the credit rating, they began discussing the conscription law, which greatly burdens the burden of the secular population, who carries on a stretcher and dismisses hundreds of thousands of ultra-Orthodox.
So how can we talk about equal burden?
But luckily we had the Kaplan protest, thanks to which we won praise for the resilience of society, the decision of the Supreme Court that was praised for canceling the cause of reasonableness and kicking democracy.
It is now clear that Moody's will be followed by the latest credit rating companies, S&P and Fitch, and will also lower the rating.
Downgrading the riskier country's credit rating is just like a banker telling a customer that they are going to pay more for their overdraft because it has become more dangerous.
The increase in interest on a debt of hundreds of billions of shekels will, according to estimates, result in an additional budget expenditure of 5 billion shekels.
This missing money, which is more or less the amount of the coalition funds, we all have to pay back, if not today then tomorrow and if not tomorrow then the day after tomorrow.
Unfortunately, the chance that the Bank of Israel will lower the interest rate this month is getting farther and farther away - bad news for mortgage holders.
The Moody's report is a wake-up call for the Netanyahu coalition. The situation is indeed bad, but it is going to be gloriously bad. Don't sell us stories of "total victory" or "together we will win", because it is not clear when such a victory will come and if it will not be a Pyrrhic victory. But The change will not come as long as Netanyahu is in office, and if he does not resign, another downgrade will come and the country will burn.
More on the same topic:
Benjamin Netanyahu
Credit Rating
credit rating
Moody's
Bezalel Smotrich
coalition
religious
economy
War of Iron Swords
Gaza war