Senior Treasury officials, at a closed meeting yesterday, warned the government that its economic policies are leading the country to disaster, Israel Television reported last night.
According to the report, officials of the Treasury’s budget department called for the immediate implementation of an emergency budget, lest Israel be left without foreign currency six months from now. They warned that the draft budget submitted to the Cabinet Sunday, amounting to $22.9 billion, would not foster the needed changes in the economy.
According to the officials, the TV report said, what the Cabinet discussed this week was not budget cuts but budget increases. The Defense Ministry asked for a larger budget to cover the costs of the withdrawal from Lebanon.
The officials expressed doubt that the government is capable of facing such challenges as the need to cut price subsidies for basic products. They warned that the government would be forced to inject massive amounts of currency into the economy which would re-fuel inflation and create a foreign currency reserves crisis.
On the same TV program, Hebrew University economist Michael Bruno suggested that the government tackle the economic crisis the same way it dealt with the withdrawal from Lebanon-by setting a target and reaching it within a definite timetable.
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