Israel: Yet Another Top Finance Ministry Official Quits

Exodus from ministry continues as budget talks stall, election deadline approaches

Finance Ministry Director-General Keren Terner-Eyal abruptly announced her resignation on Sunday, barely four months after taking up one of the most powerful posts in the Israeli government.

Terner-Eyal, who joined the Finance Ministry at the personal request of minister Israel Katz, became the third – and highest-ranking – official to quit the battered ministry in the past few weeks, further raising already heightened concerns among financial experts over the government’s ability to battle the historic health and economic crises facing the country.

The ministry is in horrible shape. The entire management team has left. They were being ignored. When the minister doesn’t respect or listen to the professionals’ opinions and ignores the staff work or the alternatives presented to him, why would competent people stay?

“The ministry is in horrible shape,” Yarom Ariav, a former Finance Ministry director-general, told The Media Line. “The entire management team has left. They were being ignored. When the minister doesn’t respect or listen to the professionals’ opinions and ignores the staff work or the alternatives presented to him, why would competent people stay?” he asks.

While the joint statement released by the resigning director-general and the ministry struck a formal and cordial tone, in recent weeks Terner-Eyal has voiced, privately as well as publicly, frustration with the government’s failure to commit to passing a 2021 state budget.

[Netanyahu] has taken the budget discussions hostage so that he can go to elections whenever he wants.

“We will formulate [the budget bill] and submit it to the government. What they’ll do with it is up to them,” she said in September.

Because of the ongoing general elections that took up all of 2019, the Israeli government has operated without a budget for 2020, instead dividing the 2019 budget allocations by 12 to determine each month’s spending, with minor additions legislated by the Knesset. The unity government formed by Prime Minister Binyamin Netanyahu and Alternate Prime Minister Benny Gantz in early May has failed to pass budgets for 2020 and 2021.

“That’s not because of economic differences, but political ones,” stresses Ariav, who served during the first years of Netanyahu’s current term. “[Netanyahu] has taken the budget discussions hostage so that he can go to elections whenever he wants. He is more interested in his personal survival than the economy’s well-being,” he accuses, referring to the prime minister’s trial on charges of bribery, fraud and breach of trust.

By law, if the 2020 budget is not passed by deadline − currently December 23 because of delays caused by elections and the Knesset’s amendment of a Basic Law – the government is automatically dissolved and Israel will head to another election, in March.

The 2021 budget is supposed to be passed by December 31, but the real deadline is March 31, 2021, or else an election will be triggered, in this case in June.

The prime minister’s Likud party in recent months has refused to pass a long-term budget, seemingly so as to assure itself the option of triggering an election and so avoid handing the prime ministership over to Gantz in November 2021, as agreed on in the coalition agreement reached back in May 2020.

On Monday, Gantz addressed the turmoil in the Finance Ministry, saying he is “gravely concerned by the disintegration of the professional class” there and by “attempts to force a personal agenda” into its work.

As for the looming budget talks, Gantz lobbed a thinly veiled threat at Netanyahu: “We will pass it. It’s not political or personal. This is a time of national emergency. Don’t test us.”

Sunday’s shocking news came barely a month after the resignation of another top Finance Ministry official, Budget Department head Shaul Meridor. Unlike Terner-Eyal, Meridor was explicit and unequivocal in his resignation letter, accusing Katz of fudging the numbers “to create fictitious resources and hand out extra funds” to interest groups, and warning of “red lines” crossed long ago. “In my many years of public service, I have never been witness to such behavior,” Meridor’s scathing statement read.

One month earlier, accountant-general Ronny Hizkiyahu announced his departure as well, citing “a feeling that the job had run its course.” Days after his announcement, sources close to Hizkiyahu told several news outlets that frustration with the stalled budget talks was the main reason for his resignation.

Any attempt to paint the ministry as crumbling is political and far from true

In a Facebook post on Monday, Katz responded to the resignations, promising that his ministry is “functioning flawlessly.” He added that “any attempt to paint the ministry as crumbling is political and far from true.”

“This situation is unparalleled; it’s never happened,” Ariav says. “There were times of friction between the political and professional ranks [at the ministry], more than once, but never like this, especially at a time of an economic crisis such as the one we’re experiencing.”

At a time of complete uncertainty, a budget provides certainty. Government ministries need a program to work off of. This was needed long ago

Gal Hershkovitz, who, until 2013, also served under Netanyahu as Budget Department chief, explained that passing a budget for 2021 was “crucial.

“Regardless of what’s happening [in the Finance Ministry] right now, they need a budget as fast as possible,” Hershkovitz told The Media Line.

“It’s necessary because it provides the framework for government spending, because it allows the government to articulate its national priorities, because it enables you to begin critical reforms, which will, in turn, lead to growth and employment.

“At a time of complete uncertainty, a budget provides certainty,” Hershkovitz says. “Government ministries need a program to work off of. This was needed long ago.”

On Monday, President Reuven Rivlin called on lawmakers to act swiftly. “For two years, Israel has been running without a budget,” the president said in a speech in parliament. “Pass one now, and give the economy the fundamental stability it requires.”