Government passes part of new economic rescue plan 

What happened: Yesterday the Israeli government approved the first part of an 80 billion shekel (£18.32bn) rescue plan, which includes grants of up to 7,500 shekels (£1,723) to the self-employed and small businesses. The second part of the plan is meant to be presented today.

  • Prime Minister Netanyahu said at the weekly Cabinet meeting: “This support, this grant, is not dependent on legislation, and we have instructed that it be put into effect today. The button will be pressed, and the money will reach accounts in the coming days.”
  • Netanyahu added that he would submit additional components of the financial stimulus plan to the Cabinet on Monday. He insisted that the plan would quickly reach the Knesset and pass through a streamlined legislative process. “This plan will provide wage-earners, the self-employed and business owners with certainty for the coming year, for the next 12 months … we can overcome the coronavirus or at least bring Israel to an economic and health routine that enables us to live in a reasonable manner in the coming year. This is the goal. This is the first step.”
  • On Saturday night more than 10,000 people demonstrated in Tel Aviv’s Rabin Square. The protests were led by the self-employed and small business owners who have been badly affected by the coronavirus crisis. Some of the demonstrators held up placards that read, “We haven’t got any air” and “No money, no bread and no hope.”
  • Last night, hundreds of residents demonstrated at a major Jerusalem intersection to protest the lockdown on ultra-Orthodox neighbourhoods and police violence. The demonstrators broke through the police barriers and set fire to rubbish bins.
  • The Health Ministry reported last night that there was 646 new cases of COVID-19 in the past 24 hours. The number of active cases is 19,300, 151 of whom are in serious condition, an increase of ten, and 47 are on ventilators. The number of people in Israel who have died of the coronavirus has risen to 362.

Context: With over 800,000 unemployed Israelis there is increasing pressure on the government to pass a budget and create some economic stability.

  • However, Prime Minister Benjamin Netanyahu and Alternate Prime Minister Benny Gantz have not yet agreed on the nature or scope of the budget, in particular on whether it will be for one or two years.  Netanyahu favours a one year budget due to so much uncertainty and is supported by Leader of the Opposition, Yair Lapid.
  • Gantz is concerned that a one year budget not only contradicts the coalition agreement, but will give Netanyahu an opportunity to collapse the government before he becomes prime minister next year.
  • Blue and White are supported by Shas for their demand to pass a two year budget. Finance Committee chairman and Shas MK Yaakov Margi said yesterday: “A two-year budget must be passed as of today. If amendments are necessary, the government and the finance committee will be able to make amendments. A two-year budget will provide stability. Ministers will be able to plan their routine spending for the long term.”
  • The Finance Ministry is currently preparing a one year budget. However, they have a contingency plan in the event that a two year budget is decided upon. A Finance Ministry source told Ma’ariv, “The clock is ticking and time’s running out. Netanyahu and Gantz are continuing to argue, and the government is paralysed with no clear budget or perspective for the future.”
  • Last night, Channel 13 News revealed a series of polling question, including, “To what degree are you pleased with Prime Minister Netanyahu’s performance in the coronavirus crisis” with 61 per cent displeased. A clear majority of 75 per cent answered badly to the question, “How is the government handling the economic crisis, in your opinion?”
  • The poll also asked “if elections were held today, for which party would you vote,” with the Likud falling a few seats to 33, Yesh Atid-Telem on 19 seats, The Arab Joint List on 16 seats, Yamina on 13 seats, Blue and White on 9 seats, Yisrael Beiteinu on 8 seats, Shas on 7 seats, United Torah Judaism on 8 seats, and Meretz on 7 seats.

Looking ahead: Once the government agrees the second part of the rescue package, the budget, (whether for one or two years) is expected to presented later this week. However, it could be delayed again.

  • Later today Prime Minister Netanyahu will meet with ultra-orthodox leaders including Ministers Litzman and Minister Deri to discuss the restrictions in the ultra-orthodox neighbourhoods.

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