Israel Political Brief June 26, 2012: PM Benjamin Netanyahu Pushes for Deficit Spending

ISRAEL POLITICAL BRIEF

ISRAEL POLITICAL BRIEF: ISRAEL NEWS

Netanyahu Pushes for Deficit Spending

Prime Minister Binyamin Netanyahu sought to offset reduced state revenues by setting a 3% deficit spending target.
Netanyahu

Netanyahu
Reuters

Prime Minister Netanyahu and Finance Minister Steinitz on Sunday decided to seek a deficit target of 3% to compensate for reduced state revenues due to the slowdown in European economies.

In line with the decision, the government will be asked to set a lower deficit targets in the long run: 2% by 2016, and 1.5% until 2019.

Netanyahu noted that the government will make efforts to meet the objective of reducing the debt to GDP ratio in the field of 60% in 2020.

In their recommendation of the Minister of Finance is contrary to the position of Budget Division, proposed to increase the deficit target by only 1% – 2.5%.

Prime Minister Netanyahu said that the rise in the deficit to 3% instead of raising taxes will add to the budget 15 billion….READ MORE

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Full Text Israel Political Brief June 26, 2012: Statement by PM Benjamin Netanyahu and Finance Minister Yuval Steinitz After Their Meeting on Deficit Spending

ISRAEL POLITICAL BRIEF

ISRAEL POLITICAL BRIEF: ISRAEL NEWS

Statement by PM Netanyahu and Finance Minister Steinitz

Photo by GPO

Source: PMO, 6-26-12

Prime Minister Benjamin Netanyahu and Finance Minister Yuval Steinitz issued the following statements after their meeting this morning:

Prime Minster Netanyahu: “I have decided to adopt Finance Minister Steinitz’s recommendation on the deficit outline. I think that we will also maintain fiscal responsibility and a responsible and real economic framework for the State of Israel. But, of course, we will need to adopt a series of steps that the Finance Ministry will submit to us in order to ensure that this framework will indeed take place. In so doing, we will maintain important national programs such as blocking the entry of infiltrators and the free education law that we will apply in another two months.”

Finance Minister Steinitz: “After a long series of discussions at the Finance Ministry, with the participation of Bank of Israel and Prime Minister’s Office representatives, I have decided to update the 2013 deficit target to 3%.

Following the sharp slowdown in Europe, we have a decline in state revenues in Israel; therefore, we must update the deficit target. This is still a challenging and conservative deficit target that is lower than in most Western countries and we will need to make an effort over the coming weeks to submit steps to the Government in order to meet this deficit target.

We also decided to set long-term deficit targets – lowering the deficit to 2% by 2016 and 1.5% by 2019, and to maintain the original goal that we decided upon, which is the most important, of lowering Israel’s debt-to-GDP ratio to around 60% in 2020. In the coming weeks, we will present a plan to meet these targets.

I also met with the Prime Minister yesterday evening and I received his agreement to submit this decision for Cabinet approval on Sunday, July 1.”

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