Amir Yaron, governor of the Bank of Israel, pleaded with Prime Minister Benjamin Netanyahu to continue exercising fiscal restraint on Wednesday in front of a cabinet decision on a revised 2024 budget that includes massive increases in money for the fight against Hamas.
A vote on a wartime budget for 2024 that would add tens of billions of dollars in more spending is scheduled for Thursday afternoon, with ministers expected to begin debating it in the late hours of Friday.
Yaron, who recently began a second five-year term as head of the central bank, has been pleading with the government for weeks not to overspend and to balance any increases in spending required for the war with cuts elsewhere and tax rises – demands that officials have rejected.
In a letter to Netanyahu that was obtained by Reuters, Yaron emphasized that markets are keeping a close eye on fiscal policymakers by saying, “There is no free lunch.”
Yaron claimed that the letter included everything he had discussed with Netanyahu during their January 3 meeting.
He calculated that the defense and compensation for those living close to the Gaza and Lebanese borders who have been forced to flee their homes due to months of cross-border rocket fire will cost 210 billion shekels ($56 billion) in the Gaza conflict, excluding lost wages.
