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Treasury budget chief quits, lashes government for ‘shattering red lines’

Shaul Meridor decries decision-making process influenced by ‘narrow interests,’ disregarding decades of budgetary rules; Finance Minister Katz accuses him of ‘political interests’

Shaul Meridor, head of the Finance Ministry's budget department, speaks at the Maariv newspaper conference in Herzliya on February 26, 2020. (Miriam Alster/Flash90)
Shaul Meridor, head of the Finance Ministry's budget department, speaks at the Maariv newspaper conference in Herzliya on February 26, 2020. (Miriam Alster/Flash90)

The Finance Ministry’s top professional official resigned Sunday as head of the Treasury’s budget department in protest of the government’s recent economic policies, after months of infighting with Finance Minister Israel Katz.

The dramatic departure of Shaul Meridor came after 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 any dissent by ministry officials.

“I can’t lend a hand to the poor conduct taking place in recent months, which all Israeli citizens will pay a heavy price for in the coming years,” Meridor wrote in a resignation letter to Katz published by Hebrew-language media.

“In the last few months, and especially during the last few weeks, my ability to carry out my work has become impossible,” Meridor wrote to Katz. “Unfortunately, you are not enabling me and many other public servants to do our jobs.”

He decried a decision-making process influenced by “narrow interests” and the “blatant contempt for staff work,” alleging the ministry’s financial toolbox had been trampled on and that decades-old rules were being disregarded.

Katz responded to the resignation by accusing Meridor of objecting to his policies for “political reasons,” even as a report said other senior ministry officials were considering stepping down as well. Meridor is the son of former minister Dan Meridor, an ex-Likud party stalwart from the party’s more moderate wing that has lost influence over the last decade.

Meridor recently came under fire from Katz and Netanyahu for opposing their plan to cut checks to all Israeli adults, regardless of income or whether they were negatively affected by the coronavirus pandemic. In response, Netanyahu’s son Yair, known for his incendiary rhetoric, claimed in an Instagram post at the time that Treasury bureaucrats were intentionally “sabotaging” aid to increasingly disgruntled self-employed Israelis “in order to agitate the public.”

Israel has been without a state budget since 2019 and will likely end 2020 without one, thanks to an ongoing fight between Likud and its Blue and White coalition partner over whether the budget should include 2021 as well. Meanwhile ministries have continued to plan spending, albeit without the backing of a solid budget framework.

“Every week, I am horrified to discover that the budget framework changes without any professional discussion, orderly thinking or long-term planning,” Meridor wrote. “I have been asking myself for some time what is the right thing to do.

“Even when the struggle became personal and ugly, it was clear to me that the personal attacks against me are nothing compared with the importance I attribute to my public mission in these days,” he said.

“In the last few days, more and more red lines were shattered, as were elementary rules of correct budgetary and economic policy. I have decided that I can no longer be part of the system and hand legitimacy to a series of wrong decisions, which do not consider the long-term implications and their effect on the economy and citizens’ lives.”

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

Katz fired back, claiming he had given a broad backing for Meridor and other ministry officials, accusing Meridor of acting out of “narrow political interests” and publicly criticizing his economic policies. He said Meridor’s resignation was therefore a “right and necessary move,” while vowing to soon appoint a replacement.

Channel 13 reported, without quoting a source, that Finance Ministry Director-General Keren Terner Eyal was considering resigning as well, even though she was specifically brought to the ministry by Katz after heading the Transportation Ministry under him for several years. Accountant General Roni Hizkiyahu could also be on his way out, the report said.

The resignation drew measures of concern and alarm from politicians and economic officials, some of whom pointed to it as a sign of the unity government’s dysfunction.

“This is a genuine alarm,” said opposition chief Yair Lapid, head of Blue and White. “The handling of the economy in the coronavirus crisis is a failure that rivals the [1973] Yom Kippur War. This is criminal negligence by a gang of irresponsible politicians who are only focused on themselves.”

President Reuven Rivlin said he was very concerned by the departure.

“Shaul is a first-class professional and one of the most dedicated civil servants I had the privilege to work with in recent years,” Rivlin said in a statement. “In these days, more than ever, Israel needs a professional and strong public bureaucracy that works together with the elected echelon to save the people and the country from the serious crisis that has befallen the entire world.”

President Reuven Rivlin during a meeting with hoteliers, business people, and residents in Eilat on June 6, 2020. (Mark Neyman/GPO)

“Shaul Meridor is a professional, dedicated and experienced person who contributed greatly to the Israeli economy in the framework of his role,” Defense Minister Benny Gantz tweeted. “He did this in a complicated economic period and his departure is unfortunate.”

Bank of Israel chief Amir Yaron thanked Meridor, said he was confident an adequate replacement would be appointed quickly, and called on the government to quickly pass a state budget for 2021.

Netanyahu last month lashed out at Finance Ministry officials who reportedly opposed his plan to disperse financial aid to all Israeli adults, a strategy that has met with considerable backlash — from economic experts, opposition leaders and members of the public who say aid should be going to the country’s struggling populations, and not to those people who have not been greatly damaged by the coronavirus crisis.

“It’s inconceivable that bureaucrats are briefing [the media] against decisions made by the government, and are working to thwart them. We won’t accept this,” Netanyahu wrote on Facebook. The premier did not name any officials, but shared a post by Likud MK Shlomo Karai that included a large photo of the head of the budget department Shaul Meridor.

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

Terner Eyal, in a series of tweets last month, said it was “very difficult for me to remain indifferent to the unprecedented criticism of my ministry’s staff, and in particular the head of the budget department Shaul Meridor.”

She lamented “the very violent discourse that has been developing against us on social media.”

Terner Eyal said the role of Meridor and the others was simply to implement the policy decisions of the government, and stressed they were not involved in making policy themselves.

Katz reprimanded Terner Eyal at the time for her comments, saying she should have received his prior authorization before responding publicly.

Katz in a statement said it was not Terner Eyal’s job to wage public fights nor to defend the ministry’s bureaucrats, but to “carry out the decisions of the political level. He added that it was up to him as minister to “resolutely defend the positive contribution of professional officials.”

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