When the prime minister is under pressure, strange things happen, and when the Ministry of Finance is weak and the finance minister is the prime minister's doormat, every vision, even the most hallucinatory, turns into reality. That is what is happening behind the scenes at the Ministry of Finance in response to the protests.
On Thursday night, the Ministry of Finance sent out one of its most bizarre e-mail messages of all time. The message contained a document, entitled "Below are some of the demands by the various protests", which earned the nickname "The 60 billion document," and included a list of demands made last week on each tiny Facebook protest and every protest camp. The Ministry of Finance added up the figures and reached a total of NIS 60 billion.
Ostensibly, this is the Ministry of Finance's job - to protect the cashbox, quantify demands, and present how much each one costs. Thorough, in-depth, and meticulous staff work at the Budget Department was needed to prepare a document of this kind. In practice, the document is amateurish and with no relation to reality, except to send a message of hysteria.
For example, it is impossible to seriously relate to statements that "demands for affordable housing [will cost] billions," "the free mandatory education bill from the age of three months - at least NIS 16 billion," and "low-cost dorms - hundreds of millions."
A senior Ministry of Finance said, "We didn’t want to publish this paper, and if it were up to us, we wouldn’t have published it. We're not proud of this document."
Here is the story. On Thursday, as the public's protests proliferated, the level of anxiety at the Prime Minister's Bureau escalated. A decision was taken: we must get across the message that the demands are unacceptable, overblown, and astronomical, and agreeing to them will cause budgetary chaos. The Budget Department was asked to make estimates. A few hours were set aside, "because the Prime Minister's Bureau wants a document before the Thursday news," as one knowledgeable source put it.
It should be noted that all this happened on Thursday afternoon, when most civil servants are already headed home for the weekend.
Budget Department officials took what they had to hand for their "estimate." "There was no organized procedure. There was no time," said the source. Since the Budget Department knows how to crunch numbers - that's its specialty after all - the result was a document with a terrifying bottom line: NIS 60 billion. This figure provides the message that Prime Minister Benjamin Netanyahu wants to send: should he capitulate to the demands, we'll hit the highway to national bankruptcy.
The next stage would be a statement by Minister of Finance Yuval Steinitz, based on this price tag, why it is necessary to reject the protesters' demands, because accepting them will put Israel on the road taken by Greece and Spain.
This is no surprise. This is the Ministry of Finance's usual method of operating: take an agenda, attach numbers to it, and reject the demand on the budget. For years, it was the Ministry of Finance that said why desalination facilities should not be built, but that agriculture should be reduced because agricultural exports meant in effect that Israel was exporting water. Before the era of Ori Yogev, the Ministry of Finance blocked the development of railways. "We concluded that it was cheaper to sit in a traffic jam for an hour and half every morning than to build railways for billions of shekels," a senior Ministry of Finance official once told "Globes".
Now the ministry says that there is no money for affordable housing, for the government to share in the cost of a massive residential building campaign, to build subsidized daycare for infants and toddlers so that their mothers can work, or to subsidize rental housing.
So why should we believe the Ministry of Finance?
The Prime Minister's media advisor said in response, "This action was taken in coordination with the Prime Minister's Office, as in other matters."
Published by Globes [online], Israel business news - www.globes-online.com - on July 31, 2011
© Copyright of Globes Publisher Itonut (1983) Ltd. 2011