Israel’s Minister of Finance, and his ‘Ides of March’ moment
We are approaching the 15th of March, the day when the Emperor Julius Caesar was stabbed to death by his friends. “Beware the Ides of March” wrote Shakespeare.
Yesterday, we learned that the debt of the Israeli government jumped to 12.4% of GDP, the total of the value of what the country produces.
Obviously, like many countries, the central authority has had to save the economy from the wretchedness of corona. The problem is that the numbers continue to get worse, despite the apparent improvement in the country health stats. (I can only assume that there is a change for the better, as most lockdown restrcitions have been removed.
What is worse, as I have mentioned several before at the risk of being boring, there is no budget. A budget offers you a framework, targets, direction. The Israeli populace has not benefitted from any of these essential elements.
To show how farcical the situation, I repeat what one commentator described on the radio this morning. Apparently, because there is no rule book in place for 2021, any expenditure above 50,000 nis (about US$15,000) requires special approval – even if this is to purchase stationary for a government ministry!
Do not be fooled by any seemingly positive stats.
Sure; average wages by 7% in 2020, primarily because those jobs lost from corona were lower paid positions.
Israel’s international trading account hit a massive surplus last year, more to do with the strength of the Israeli current rather than the discovery of additional markets.
Yisrael Katz, the Ministry of Finance, remains optimistic. He has to be. That is his job, especially just before an election. A better indication of the immediate future comes from his appointee, Prof. Amir Yaron, the Governor of the Bank of Israel. Despite inflationary concerns, he is intent on keeping down rates of interest.
Let me spell it out: The Bank of Israel believes that the government’s policies are unlikely to ease the country out of the fiscal mess. He is worried. After all, as I wrote above, somebody has thrown away the rudder.
Punctuality is not a characteristic associated with Israelis. If you ‘shift’ the 15th by 8 days, you come out at 23rd March, the day of the general election. Israel’s Minister of Finance will turn up at the market of polling booths and will find out if and by how much his electorate believe that he can save their bank accounts.
Beware sir! The social implications of that debt are too hard to hide for ever and a day, ………… although maybe another 2 weeks will suffice.