3 July 12 16:11–Prime Minister Benjamin Netanyahu and Minister of Finance Yuval Steinitz have so far evaded the hard questions about the budget cuts and tax hikes needed to meet the new and higher deficit target, but that may now end. Sources inform ”Globes” that a team from Standard & Poor’s is in Israel and that this year’s talks will not be easy, as S&P will demand explanations about the significance of Netanyahu’s decision, based on Steinitz’s recommendation, to double the 2013 deficit target from 1.5% to 3%. The team will also want to know what operative measures the government plans to take to achieve the new target, given that officials and analysts expect the actual deficit to hit 4.5% of GDP in 2013, after the 2012 deficit will exceed the 2.5% target to reach 4%.
The team will meet with senior officials from the Ministry of Finance, Israel Tax Authority, and Bank of Israel, as well as executives from the financial system and top economists. The team will then write S&P’s annual report on Israel and give a credit rating…Read More>>