On video: NIS 80,000 for clothing: the Finance Committee approved the increase in the expenses of the Prime Minister's residence (Knesset Channel)
As someone who passed more than 15 state budgets during his career, Prime Minister Benjamin Netanyahu showed off yesterday at the beginning of the cabinet meeting to approve the budget and promised: "Israel's economy is strong and it will continue to get stronger."
The economic headlines of the past week indeed heralded exactly the opposite - the interest rate has risen, the shekel is crashing, the stock market is falling, emergency meetings at the Bank of Israel and many more international recommendations and warnings to withdraw funds and investments from Israel.
For almost two months, since the legal revolution was launched, frightening predictions have been placed on his desk, from the world's greatest economists, to the heads of the banks, the senior officials of the economy and the top of the high-tech industry in Israel, who warn of the consequences of the extreme and hasty regime changes that the government is promoting;
And the cumulative data and indicators show that this is a true alarm.
Netanyahu, as usual, doesn't let reality confuse him: "This is political hysteria," he repeated yesterday at the budget meeting before firmly stating: "It has no hold on reality."
Still wanted to hear the position of the professionals.
Nir Barkat with Netanyahu in the Knesset, February 22, 2023 (Photo: Flash 90, Yonatan Zindel)
Earlier this week, Finance Committee Chairman Moshe Gafni, at the request of members of the opposition, convened a special discussion on the impact of the legal reform on Israel's economy. One by one, professors and economics experts warned of the devaluation and human damage to the thriving Israeli economy, from capital smuggling to the downgrading of the credit rating, as a result of the hasty regime changes that the government is promoting.
There was not a single one who said that the reform would strengthen or be good for our pockets. The professionals in the Ministry of Finance, the Economy and the Tax Authority were absent from the discussion, as were most of the coalition members, who honored their presence only at the end of the discussion to approve the chairman's summary proposal , which was worded as follows: "There is no connection between the legal reform and the danger to Israel's economy."
How simple.
Back to yesterday's budget discussion.
After the cameras left the room, Economy Minister Nir Barkat nevertheless asked to hear the position of the professionals regarding the risks of the legal reform, and in light of the great anxiety in high-tech and the business world.
The Chief Economist at the Ministry of Finance, Shira Greenberg, indeed warned of a significant danger that could roll out "like a snowball", and Bank of Israel Governor Amir Yaron said that this could cause significant damage that would be very difficult to stop.
More in Walla!
Barkat at the budget meeting: "I was warned that the economy would collapse. Even if we don't get everything, it's not bad"
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There was no one who said that the reform would be good for our pockets.
Discussion in the Finance Committee (Photo: Flash 90, Yonatan Zindel)
The governor already warned Netanyahu last month that the regime changes could damage the country's credit rating, but the prime minister ignored it.
Also yesterday, at the budget meeting, he tried to skip over the issue quickly and sent Barkat to talk to Justice Minister Yariv Levin.
Earlier, Minister of Tourism Haim Katz wondered if it was even right to discuss this and commented: "It will leak", faithful to the approach of not seeing, not knowing, not hearing that also rules over him.
Under the auspices of the ombudsman's ban on Netanyahu engaging in Levin's legal reform, the prime minister allegedly removed his hands from the entire process, and above all removed from himself the responsibility for the decision-making process. For nearly seven weeks now that the country and the economy have been buzzing and excited, the government has not held a single orderly discussion On Levin's plan, not even the Likud faction, not even the political-security cabinet. At the opposition's demand, the chairman of the Constitution Committee, Simcha Rothman, convened a secret meeting this week to discuss the international and security implications of the reform;
The representatives of all security agencies were unanimous that the violation of the independence of the courts would increase the risk of lawsuits against IDF soldiers and Israeli officials in The Hague. In the cabinet, however, the issue has not yet come up for discussion.
In the absence of a proper and in-depth discussion of the plans, Netanyahu and Levin also did not foresee the economic push, neither in its strength nor its speed.
The prime minister's office has been searching for a world-renowned economic expert for the last few weeks to defend the reform and provide the government with PR services. All of them agreed to come, some of them have since publicly joined the criticism of all their friends. As far as is known, apart from Yanon Magal and Sharon Gal, the only economist who expressed support for the plan He is Netanyahu's associate, Prof. Avi Simhon, and head of the National Economic Council in the Prime Minister's Office.
warned Netanyahu already last month.
Nagid Ben Israel Amir Yaron (photo: photo processing, Flash 90, Yonatan Zindel)
Director General of the Prime Minister's Office Yossi Sheli at the Finance Committee hearings (Photo: Flash 90, Yonatan Zindel)
In the political system, it is estimated that Simhon, a Likud member, is Netanyahu's leading candidate to replace Bank of Israel Governor Yaron, who will retire by the end of the year.
This week, Netanyahu was forced to publish two clarifications on the independence of the Bank of Israel, following a tweet by Foreign Minister Eli Cohen who called for intervention in the governor's interest rate hike policy.
If Simhon does win the appointment, they will not need tweets or clarifications: the Bank of Israel will be politically colored, and all its independence will go down the drain.
This week it was revealed in Khan 11 that the Prime Minister wants to appoint another Likudi associate, the CEO of the Prime Minister's Office Yossi Shelli, as acting chief statistician.
Controlling the Central Bureau of Statistics, which is responsible for the national growth, product and employment indicators, will allow Netanyahu to engineer economic consciousness, and at the very least avoid publishing negative indicators that will cloud the mood and atmosphere, considering what is the data worth if we do not control it?
Following the publication, the Prime Minister apparently withdrew his intention to appoint Shelley, and will try to appoint another candidate on his behalf to the Central Committee through a search committee. The first unwritten threshold condition will be loyalty to the reality he wants to create.
But in the meantime, reality defeats Netanyahu and his government and confronts them with data that they cannot ignore.
According to the Panels Politics survey published in Maariv today, if the elections were held today, Likud would have 26 mandates - 6 mandates less than today, and the 64 coalition has lost 9 mandates since the elections and currently receives only 55. This is a clear sign of upside: even before the government turned 100 days - Netanyahu lost almost 20% of his support.
Even the decision of the Prime Minister and his wife to request precisely now, at the height of the economic storm and just before the budget cuts, double funding for their dormitories does not exactly convey a connection to the reality of the small citizen.
If the economic crisis worsens, and continues to erode Likud's support base, there may be more significant internal pressure on Netanyahu and Levin to soften the reform and reach a compromise that will stop the spiral between the two realities.
As long as they continue to ignore the data and the experts, both the economic and political indices will continue the trend of collapse.
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Benjamin Netanyahu
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Nir Barkat
Bank of Israel Governor
The legal revolution