Legal pressure mounts on government to pass budget as elections loom

AG presses Netanyahu and Gantz to advance 2020-2021 budget; Finance Ministry to present 2021 proposal to PM, as Blue and White mulls dissolving ailing coalition

Defense Minister Benny Gantz, left, and Prime Minister Benjamin Netanyahu seen during a vote at the Knesset, in Jerusalem on August 24, 2020. (Oren Ben Hakoon/Flash90)
Defense Minister Benny Gantz, left, and Prime Minister Benjamin Netanyahu seen during a vote at the Knesset, in Jerusalem on August 24, 2020. (Oren Ben Hakoon/Flash90)

Facing a High Court of Justice challenge and mounting pressure from the attorney general on Sunday, the Finance Ministry will reportedly unveil the state budget for 2021, amid speculation the government could be dissolved and early elections called later this week over the budget standoff.

Sources in the treasury told the Reuters news agency that it will present the NIS 426 billion ($128.5 billion) budget for 2021 to Prime Minister Benjamin Netanyahu on Monday. The proposal does not include tax hikes and incorporates dozens of reforms to combat the economic hit of the coronavirus pandemic, the report said.

The development comes as the government has held up the passage of the 2020 budget, which must be approved by the Knesset by December 23 or the country will go to early elections for the fourth time in two years.

In recent days, government officials have focused on the 2021 budget and the timeline of its possible approval in briefings to Israeli media, even as the deadline for the neglected 2020 budget rapidly approaches, threatening to send the country to the polls again.

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

Israel has limped through 2020 without a state budget, even though the coalition agreement signed by Blue and White and Likud in April provided for a two-year 2020-21 budget to be passed in the summer.

According to the coalition deal, Netanyahu is to serve as prime minister until November 17, 2021, at which point Blue and White leader Benny Gantz will succeed him. However, if the government falls due to failure to pass the budget, Netanyahu retains the premiership until the next election. He has therefore been accused of using the passage of the budget as leverage, while charging that Gantz has been violating the coalition agreement himself.

Attorney General Avichai Mandelblit on Sunday urged Netanyahu and Gantz to swiftly pass the 2020 and 2021 budgets, citing the ongoing court challenge that suggests the government is breaking the law with its refusal to pass a budget.

In the letter, Mandelblit said the draft needs to be submitted before the start of the year it deals with, and lawmakers need enough time to hold a debate on it.

Supreme Court Chief Justice Esther Hayut (C) during High Court of Justice deliberations on petitions against Benjamin Netanyahu being appointed prime minister, on May 3, 2020. (Yossi Zamir/Pool)

With just over a month remaining until the end of the year, the High Court of Justice instructed the government on Tuesday to explain why it has thus far failed to pass a budget for 2020. The court gave the government 21 days to explain the legality of an amendment to Israel’s Basic Law, passed by legislators in August, which allowed them to delay the passing of the budget until mid-December.

The government, however, could fall before the budget crisis comes to a head, with the opposition floating a no-confidence motion on Wednesday that Blue and White is weighing whether to support. If the bid receives the backing of Gantz’s party, it would likely bring down the long-dysfunctional coalition.

“There is a good chance that we will vote in favor of dissolving the Knesset on Wednesday,” Science Minister Izhar Shay told Army Radio on Thursday.

Also Thursday, Netanyahu said there was “no doubt” elections are coming, and blamed his coalition partners. “When agreements are not respected on the part of Blue and White, there is no doubt that we are on the way to elections,” he said.

“If we see a different approach from the Blue and White side and cooperation within the government, instead of a government within a government, we can continue to work together. If not, everyone can understand that this will lead to elections,” the prime minister said.

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