Disagreement and harsh mutual recriminations have emerged between Prime Minister Benjamin Netanyahu and his aides and Ministry of Finance officials over the handling of the wave of price rises. Sources at the Prime Minister's Office accuse Ministry of Finance officials of torpedoing every attempt to promote measures to help the population.
Today, Netanyahu personally accused Ministry of Finance officials of being alienated from Israel's citizens. "They only look at the numbers," he said.
Ministry of Finance officials are furious at the attempt to make them the scapegoat for the state budget on them. "Economic policy is not imposed. You can't raise VAT or cut the income tax rate because prices are rising. It simply doesn’t work that way," said a senior Ministry of Finance official. "Who approved the state budget? Who voted in favor of it? [Budget Director] Udi Nissan?"
Another Ministry of Finance official said, "Only a few weeks ago, we presented all the alternatives to the government, which, together with the prime minister, approved the economic plan and the 2011 deficit target, which cannot be deviated from. It's illogical to say, a few weeks later, and start changing everything because gasoline prices rose. You have to be consistent."
The Ministry of Finance spokesman's office declined to comment on the remarks, but said that ministry officials regularly meet with officials from the Prime Minister's Office.
Minister of Finance Yuval Steinitz is caught in the crossfire. He is trying to rebuff the harsh criticism leveled against him from his colleagues in the Likud. His aides vehemently deny claims of a rift with Netanyahu.
"There is no rift. There is full and close cooperation. The two men's political alliance of 12 years is the longest in Israeli politics. Even if there are disagreements, they are over practical issues, and don’t spread into personal ones," said a source close to Steinitz. He added that Steinitz and Netanyahu met today to discuss the package of measures to ease the price rises.
"The prime minister has full confidence in the Finance Ministry. Together, they will continue to responsibly lead the economic reforms. The prime minister is currently considering a number of alternatives, and he will soon make a decision that is not populist," said the prime minister's spokesman in response.
Published by Globes [online], Israel business news - www.globes-online.com - on February 8, 2011
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