2 July 12 15:59–The tension between Governor of the Bank of Israel Stanley Fischer and Minister of Finance Yuval Steinitz has worsened. At the cabinet meeting yesterday, when the subject of raising the fiscal deficit target in the 2013 budget to 3% of GDP arose, Fischer tried to persuade ministers to vote against Steinitz’s proposal , which had the support of Prime Minister Benjamin Netanyahu. In the end, as we know, the ministers ignored Fischer’s pleas, and approved a rise in the deficit target.
“Fischer came with an agenda of his own,” a source familiar with the matter says. “He wants a deficit target of 2.5%, and his considerations are purely economic. There was tension at the meeting, and each side tried to pull in its direction. In the end, the finance minister won, and it’s no trivial matter to stand up to Stanley Fischer.”
The source reported that Fischer went over Steinitz’s head directly to the ministers and said to them “there’s no money” and “we mustn’t be spendthrift” because “the situation in the world is not good.” According to the source “the 0.5% was very material as far as Fischer was concerned.”…Read More>>