Prime Minister Binyamin Netanyahu on the contacts for the abductee deal/Prime Minister's spokeswoman
Finance Minister Bezalel Smotrich was quite accurate for a change when he labeled Netanyahu a liar son of a liar.
As time goes by, it becomes clear that the title is justified.
However, over time it becomes clear that the Minister of Finance also suffers from similar symptoms: although he does not lie, he bluffs profusely and the flow of his words is not accurate.
His reference to the downgrading of Israel's credit rating by Moody's proves this well.
Only a week has passed and it turns out that the downgrade is not the main problem facing the economy.
The real attack is hidden in the furious reaction of Netanyahu and Smotrich to the decision.
Another confidence-building step is bringing forward the VAT increase by 1% from 2025 to the current year or canceling the illusory exemption from VAT on Internet shopping on websites abroad that remains unchanged due to populist considerations. None of this happened in the last week, it was proven that the state of the economy will continue to deteriorate Because of the promiscuous conduct.
Smotrich and Strock.
The hope that the serious report will be answered by cutting coalition funds has been disappointed/Flash 90, Sraya Diamant
It is difficult to ignore the damage of Smotrich's delusional statements according to which "the decision is a 'political manifesto' that does not contain serious economic arguments. The 6-8 economists sitting in New York (the mistake in the original as they are sitting in London) have no relative advantage neither in security, nor in policy nor in the understanding of constitutional law".
But in this week's supplementary report, the exact opposite was proven: Moody's is mainly troubled by the economic fiscal developments and the fear of an increase in the economy's debts and much less by the political situation in Israel
. That his understanding of the economy until a year ago was similar to that of Itamar Ben Gvir will benefit us much more than his angry reaction.
Let us recall that as long as the rating went up or remained unchanged, no claims were made about the quality of the economists or the credit rating methodology. At Moody's we waited with the rating announcement until it was approved on first reading.
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Signs at a demonstration last weekend.
Smotrich had no complaints about the quality of the economists or the methodology as long as the rating did not go down/Navat Tzur
The hope was that with the approval of the budget, the Treasury would prepare an allocation for improvements in the spirit of the rating company's recommendations.
For example, they will implement additional moves to reduce the deficit, steps to encourage growth (such as reforms in education or transportation) or further cuts in coalition funds.
In the last week, not only did they not implement the recommendations of the report, but they did the exact opposite. In the Knesset, they punished the Treasury for violating a basic law by bringing the budget for approval late. Therefore, contrary to the promises of the 2024 budget and the Law on Arrangements, they were not approved as one piece.
Some of the laws will be split and discussed separately in the Knesset committees, which puts I doubt their full approval due to political considerations. As a result, there may be a lack of budgetary sources to finance the deficit.
Items that will not be automatically approved are the utilization of the surplus funds of the Standards Institute (NIS 200 million), the reduction of one recovery day for all workers in the economy (NIS 1.7 billion), the taxation of excess profits in banks (NIS 1.4 billion in 2024), carbon taxation, raising the health tax and eroding the National Insurance rates.
The Treasury tried to approve all the decisions with a financial significance of about NIS 5 billion. This will not happen and the Treasury will be forced to look for alternative sources. If these are not found The deficit will cross 6.6%, as the Treasury assumed, on the way to a double-digit deficit. By the way, Smotrich originally promised a deficit that would not exceed the 5% mark.
Netanyahu is afraid of Smotrich and Ben Gvir.
We got a "celeb discount" on this rating, we went cheap/photo manipulation, Jonathan Zindel/Flash 90, Tomer Appelbaum
Netanyahu fears harsh measures for fear of the fate of his government.
And yes, he trembles in fear of Smotrich, but mainly of Ben Gvir, also in economic matters.
So it turns out that Moody's was also right about the political aspect of the rating and proved that there is a close connection between politics and the economy.
The fact that Israel's credit rating went down by one notch and not two occurred because we received a "celeb discount".
In the current rating we got off cheap and we will miss the current rating.
In this whole circus, the credit rating companies S&P and Fitch expect to publish Israel's rating decision soon.
If still today they were debating what to do, the events of the week give them the final opportunity to reduce.
Let's hope they settle for one point and not relegate us.
And good luck to us.
More on the same topic:
Bezalel Smotrich
Benjamin Netanyahu
Moody's
Credit Rating