Israeli Finance Minister Yair Lapid started his first week of work by telling activists from his Yesh Atid party that Israel’s fiscal situation is far worse than he had imagined, and warned that he would have to undertake painful measures to correct it.
“The picture that is slowly unfolding before me is a lot worse than I had expected,” Lapid wrote in an email over the weekend. “Don’t use words like ‘deficit’ or ‘fiscal crisis.’ I’m telling you that it’s simply a lot worse. I wanted to fix the house but discovered that our bank account is in overdraft. What kind of overdraft? Monstrous, ominous and growing.”
Lapid has until the end of July to get a budget package through the Knesset. The Bank of Israel has warned that the fiscal deficit could balloon to 4.9% of gross domestic product if government spending is not massively reduced – while meanwhile, taxes are raised and tax breaks abolished. This year alone, the government needs to reduce its planned spending by NIS 13 billion just to keep spending growth in line with government-mandated ceilings, according to the Bank of Israel.
Lapid will devote his first year as finance minister to reducing the so-called “overdraft,” he vowed, even if he’d have preferred to address other, “happier” issues. “I believe that my job is to go exactly where it is most difficult,” he said. Read more at Haaretz.