No conversation with Minister of Finance Yuval Steinitz, no appearance at a conference, no speech he makes, does not turn within minutes to the biennial budget. He believes that it is his stellar achievement as minister, a unique global discovery - one that will naturally be named for him.
At every opportunity over the past two years, Steinitz has presented the biennial budget as a singular economic achievement and he has awarded himself superlatives over the genius invention.
"Maybe one day we'll nominate him for the Noble Prize in Economics," a top Ministry of Finance official, who could no longer bear it, once told "Globes" sarcastically.
The Ministry of Finance has been greatly weakened during Steinitz's term. Its influence on the budget is waning, while the National Economics Council and the Prime Minister's Bureau and its emissaries have become dominant. The ministry's budget department has lost its power, its moral is down, and top ministry officials have been quitting one after another, and the ability of finding suitable replacements is vanishing. As a result, Steinitz was forced to appoint a third-rate official as budget director.
The epitome of the process is the Trajtenberg team, the first committee since 1985 to take the handling of budget priorities away from the Ministry of Finance, and ministry officials only appear before it to express their positions.
But Steinitz is unconcerned. As far as he is concerned, he has chalked up a huge success - the biennial budget.
Steinitz turned a controversial technical matter into ideology, and an achievement to crow about. But there is a good reason why almost no country in the world uses a biennial budget, and not just because it violates the balance of power between the executive and legislative branches of government.
The reason is changing realities. "Every plan is a base for change," is an old military adage about the unpredictable events that overturn reality and require new preparations. In these conditions, flexibility is the name of the game, and the biennial budget, which handcuffs decision-makers, worsens the problem.
Steinitz is trying to force his will on reality, but reality is painfully hitting back. We are not yet half way through the biennial budget, and it is already clear that it is irrelevant. The combination of the Arab Spring, which has worsened the security threat; the deteriorating global economic climate; and the social protest have overthrown the basic assumptions of the biennial budget. The macroeconomic figures that were the cornerstone of the budget plan and the numbers derived from them no longer exist.
Steinitz must now do what politicians hate doing: admit a mistake, and prepare a new budget for 2012 - a budget that is relevant to reality, and meets demands and needs, especially social ones.
Is Steinitz capable of grasping the fact that the biennial budget, his darling, is a flop? We find it hard to believe. Steinitz may be a politician with integrity, better than average courage, and less arrogance than others, but he has so attached himself and his reputation to the biennial budget that admitting to the mistake will be impossible for him.
Published by Globes [online], Israel business news - www.globes-online.com - on August 29, 2011
© Copyright of Globes Publisher Itonut (1983) Ltd. 2011