International rating agency Moody's sees the inclusion of Avigdor Liberman's Yisrael Beitenu party in Prime Minister Benjamin Netanyahu's coalition as "a credit positive." "Mr. Netanyahu now has a broader set of individuals on which to rely to move his agenda forward, giving him greater flexibility to assemble the necessary votes to pass key legislation. For instance, reforms to the labor market, including the incorporation of a larger percentage of the Haredi (ultra-Orthodox) male population into the labor force, may now be up for reconsideration after coalition partners previously torpedoed measures taken under the previous Netanyahu government," Moody's says.
Moody's previous comments on Israel, last week, made waves as it described the weak first quarter growth numbers as "a credit negative" for Israel. Moody's most recent note to investors analyzes political developments in Israel in a more positive light.
At the same time, Moody's comments that events such as the resignation of Moshe Ya'alon as minister of defense and the departure of Orly Levi-Abekasis from the Yisrael Beitenu party are signs that "coalition politics will remain challenging given the number of parties and divergent demands."
On the two-year budget presented in outline to the prime minister last week, Moody's says that "the cost of Mr. Liberman joining the coalition will add to the difficulties in formulating a budget for next year, where identified spending is already NIS 10 billion higher than the fiscal rule permits."
Published by Globes [online], Israel business news - www.globes-online.com - on May 30, 2016
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