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Israel’s New Goverment Faces Do-or-Die Challenge in Budget

Israel’s New Goverment Faces Do-or-Die Challenge in Budget

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Israel’s new government is facing the biggest threat yet to its survival as Finance Minister Avigdor Liberman tries to corral a majority of lawmakers behind the country’s first new budget in three years.

The first of three votes on the proposed spending plan will take place in the Knesset on Thursday, but there’s rumbling on the coalition’s left-wing flank about several related regulatory proposals, including opening Israeli agriculture to greater competition from abroad and increasing the pension age for women. If Prime Minister Naftali Bennett’s coalition, which controls a wafer-thin majority in parliament, can’t get a budget passed in a final vote in early November, then the government falls and new elections will be called.  

The country has been running on a slightly amended version of its 2019 budget, approved three years ago, because drawn-out political turmoil and the absence of a stable government kept lawmakers from passing subsequent spending plans. Pressing economic issues such as outdated infrastructure have therefore been left largely unaddressed, even as the country went heavily into debt to offer households and businesses relief amid the coronavirus pandemic. 

The Bennett government has vowed to make the economy’s recovery a priority. 

Liberman predicted on Monday that the wavering lawmakers would ultimately support the two-year draft budget and the regulatory proposals.  “After three-and-a-half years, if people want the economy to progress, they will need to make difficult decisions,” he said at a news conference at the ministry in Jerusalem. 

The proposed spending plan puts outlays at 432.5 billion shekels ($133.8 billion) in 2021 and 452.5 billion shekels the following year. The budget deficit would fall to 6.8% of gross domestic product this year and 3.9% in 2022.

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