Warning that the army was operating under unprecedented financial constraints, IDF Chief of Staff Benny Gantz said Monday that he had cancelled reserve training for the rest of the year because of cuts to the defense budget.

Speaking at a ceremony at the IDF staff and command college in Glilot honoring outstanding reservist soldiers, Gantz said that “the national priorities have changed. And with it, sadly, so have the national decisions that have to do with security.”

“As a result,” he continued, “we are dealing with a complicated resource challenge, the likes of which we have not seen before, and which could have dramatic consequences for the future… These days we are forced to make painful decisions which affect all areas — reserves and standing army, training in the field and operations in the rear.”

“The state has clear priorities, but we have taken all the security risks possible.”

Gantz went on to say that “the very important security programs having to do with the reserves will not be able to take place this year. This year, the reserves will not train.”

A senior military official was quoted saying last week that “the IDF has run out of funds” and that the military needs “billions of shekels within days in order to continue to operate.”

The official was speaking anonymously last Monday to Channel 10 about deep cuts to the defense budget that had hurt the army’s training programs and general readiness.

He noted that the military had cut armored units and fighter jet squadrons and fired a thousand people in under three months, but said that was still not enough to counter the lack of cash.

“In the next few days IDF chief Benny Gantz will decide which exercises and trainings to cancel,” the official said at the time.

Also last week, Deputy Finance Minister Miki Levy (Yesh Atid) warned that the Defense Ministry would not see its budget increased, despite the news Friday that Defense Minister Moshe Ya’alon and Gantz had decided to cancel a major upcoming national preparedness exercise in light of the ongoing budgetary dispute.

Levy accused the defense establishment of mismanaging the budget and urged defense officials to “sit down and prioritize.”

Ya’alon last Wednesday described the fiscal state of the country’s defenses as a “crisis,” and criticized the Finance Ministry’s conduct in doling out funds.

“We are in a crisis; this is a fatal blow to training,” he told the Knesset’s Foreign Affairs and Defense Committee. “We are going to decrease the level of air, sea, and land training even further, and preparedness, readiness and competence will suffer.

“Starting next month we will be forced to enter a difficult period. This is a harsh blow to the competency of the regular fighters, not to mention the reserves,” he said.

Last May, the government set the IDF budget at NIS 51 billion ($14.5 billion). The military took a cut of NIS 3 billion from its 2014 budget, but argued that the cuts would actually amount to NIS 7.4 billion ($2.1 billion) due to factors beyond the IDF’s control, such as higher electricity costs and taxes, payments for injured soldiers and additional benefits for career soldiers due to the rising retirement age.

Meanwhile, the IDF said it had done its part, making cuts to its workforce and, in June, halting operational activity for reservist units for the rest of this year.

The standoff between the Finance and Defense ministries over the 2014 defense budget was thought to have come to an end in late October with the security cabinet approving an infusion of NIS 2.75 billion ($780 million) for the defense establishment.

The cabinet was unanimous in its decision, and the Prime Minister’s Office said in a statement that the cash for the budget increase would be drawn from a budget surplus.

The IDF had hoped to secure a NIS 4.5 billion ($1.28 billion) increase.

Times of Israel staff contributed to this report.