Katz denies Treasury turmoil as top officials exit ministry

Minister says he won’t address gossip, claims Finance Ministry functioning well after director-general follows others out the door as crisis swirls over budget, virus response

Then-Foreign Minister Israel Katz speaks during an emergency meeting the at the Foreign Ministry in Jerusalem on February 13, 2020. (Flash90)
Then-Foreign Minister Israel Katz speaks during an emergency meeting the at the Foreign Ministry in Jerusalem on February 13, 2020. (Flash90)

Finance Minister Israel Katz pushed back against criticism following a number of high profile resignations from his ministry, writing on Monday that all discussions there are “professional and respectful.”

The statement came after Finance Ministry director-general Keren Terner Eyal announced on Sunday that she would be stepping down after five months on the job, with comments made to the media by “close associates” saying that she felt decisions were being politicized and Katz was stifling debate.

“The resignation has nothing to do with the budget, policy and conduct of the Finance Ministry. I will not address gossip from close associates and self-interested attacks from the media,” Katz said.

“Under my leadership the Finance Ministry is functioning well, independently and with full authority, and fulfills all its tasks well during this difficult and challenging period,” Katz wrote.

Keren Terner Eyal, then-director general of the Transportation Ministry, attends a hearing at the Knesset, on March 20, 2017. (Yonatan Sindel/Flash90)

“Of course, the reality is that in the face of Blue and White and the mutual paralysis in some areas makes it difficult for everyone, especially regarding the important arrangements and reform laws I want to promote and prevent, but I have managed to navigate and pass all major decisions I have initiated,” Katz said, referring to the deepening row between coalition partners Likud and Blue and White.

The post was accompanied by a photo of Katz walking down an empty road on his own.

באשר לפרישת מנכ״לית משרד האוצר קרן טרנר. נפרדנו בהודעה משותפת יפה עם דברי שבח הדדיים, ובואו נשאיר את זה כך. אין לפרישה…

פורסם על ידי ‏ישראל כ״ץ – Israel Katz‏ ב- יום ראשון, 11 באוקטובר 2020

The resignations have stemmed from ongoing disagreements in the Treasury over how to stem Israel’s coronavirus infection rate while attempting to minimize damage to the economy.

Terner Eyal’s resignation follows the departures of the head of the Finance Ministry’s Budgets Department, Shaul Meridor, and Accountant General Roni Hezkiyahu.

Officials have for months charged Katz with pushing policies for political reasons with the goal of boosting Prime Minister Benjamin Netanyahu and the Likud party. Katz has also been accused of stifling dissent by ministry officials.

Prime Minister Benjamin Netanyahu, right, listens to then-Foreign Minister Israel, now Finance Minister, Israel Katz during the weekly cabinet meeting at his office in Jerusalem, October 27, 2019. (Gali Tibbon/Pool Photo via AP)

Terner Eyal reached her decision in coordination with Katz, according to a joint statement issued on Sunday, which said that she would step down in the coming weeks “in light of her personal request.” Terner Eyal was a personal appointee of the minister’s.

However, the Ynet news site reported that Katz had asked Terner Eyal to remain in the position until after the so-called coronavirus cabinet meets later in the week, but due to increasingly acrimonious relations between the two, she turned down the request and demanded the announcement go out immediately.

Quoting comments to her close associates, Ynet reported that Terner Eyal — who took over after her predecessor Shai Babad resigned in May — had complained on Sunday that “what’s going on in the ministry is crazy. Everything here is shooting from the hip. There are no professional consultations. I can no longer continue in this situation.”

Channel 13 quoted her associates saying she was pushed over the edge by her belief that decisions were being imposed from above for political reasons, and felt unable to remain in the post especially with jobless totals nearing a million. Some 960,000 Israelis are currently unemployed, about a quarter of the workforce.

She reportedly also complained that the ministry’s failure to prepare a state budget was “unforgivable.”

Finance Minister Israel Katz holds a press conference at the Finance Ministry in Jerusalem on July 1, 2020. (Olivier Fitoussi/Flash90)

Shortly after the announcement of Terner Eyal’s resignation, Katz said that he had ordered the Treasury to prepare the 2021 state budget for government approval in December, rejecting the Blue and White party’s demand that it be prepared immediately along with the 2020 budget set to be passed days before the end of the year.

Israel has been without a state budget since 2019 and could end 2020 without one, due to an ongoing feud between Likud and Blue and White over whether the budget should include 2021 as well.

Defense Minister Benny Gantz of Blue and White is calling for the budget to cover all of 2021, while Netanyahu is insisting that it only address 2020, which would provide him another exit ramp to go to elections without having to hand over the premiership to Gantz, as part of their power-sharing deal.

Katz’s announcement means that Finance Ministry officials will not be able to work on the two budgets together.

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