Amid public protests in Jerusalem, the intense debate over judicial reform, and terror and riots in the West Bank, one might be forgiven for overlooking another significant event in Israeli politics: the cabinet’s budget deliberations on February 23 and 24, which ended in an unusual stalemate. Haviv Rettig Gur describes how this 21-hour marathon cabinet session, which happens every few years, normally proceeds, and what made this year different:
It’s called “Government Night,” and it always begins the same way—at 11 a.m. on a Thursday with a presentation by Treasury economists on the big-picture state of the Israeli economy. After the presentation, the Treasury’s budget teams choose different corners in the wood-paneled cabinet conference room and huddle there with their respective minister and senior aides: the healthcare team with the health minister, the education team with the education minister, and so on. Hours of ferocious bargaining ensue in each huddle, and over the next few hours the teams slowly piece together a state budget for the next two years.
Meanwhile, in an office down the hall sits the treasury’s “Macro Team,” a kind of internal budgets department for the budgets department. As each issue team negotiates with its respective minister, any concessions are then taken for approval to the Macro Team, whose job is to ensure overall spending doesn’t balloon out of control. Any funds added to one ministry must be pulled from another. It’s a complex and tense give-and-take that lasts through the night.
It is almost impossible to exaggerate the importance of Government Night in the proper management of Israel’s fiscal affairs; it is where the rubber hits the road, where ministers’ campaign promises and legacy aspirations run head-first into fiscal realities, where a government’s priorities are clarified in hard shekel terms. And at last week’s Government Night, the Netanyahu government couldn’t get the job done.
At around 10:30 a.m., long after the budget bill was supposed to have been approved in the traditional, festive cabinet vote, a worried Netanyahu concluded that the spectacle was causing real harm to the Israeli economy. Ordinary Israelis don’t know about Government Night, but investors follow it closely for signs of any slips in the government’s commitment to fiscal restraint.
In Gur’s view, the collapse of ordinary budget negotiations, together with the disappearance of key ministers during Sunday’s outbreak of violence, speaks to a cabinet that does not have a firm hand on the rudder of the ship of state.