A week into his new job, Finance Minister Yair Lapid says that the picture that unfolds before him regarding the state of Israel’s economy is much worse than he expected, and that he intends to reduce spending and make painful cutbacks.
According to Lapid, Israelis who will be feeling this year that their situation has worsened should know that it’s only temporary.
On his Facebook page, Minister Lapid wrote that Israel’s deficit is monstrous, ominous and growing worse. “The reason the deficit – wasting of money we didn’t have and making commitments that we shouldn’t have made.”
The Finance Minister stressed that his first year in office will be devoted to reducing the deficit, so that next year it will be possible to reduce housing prices, pursue burden equality, help small businesses, and improve education.
Lapid, who initially pressed for the Foreign portfolio, was aware that becoming minister of finance could become a career ender for him. Practicing fiscal responsibility in government is not the type of task that makes for great popularity – have a look at Greece and Cyprus these days, or review Israel’s 2011’s summer of social protests. Undoubtedly, it would have been easier for the flashy television journalist to strut his right stuff as foreign minister.
Indeed, some have suggested that Prime Minister Netanyahu has lured his younger challenger into the finance ministry trap precisely so that the youthful Lapid age fast and lose his shin trying to deal with the $15 billion plus deficit left him by his predecessor.
But from his first statement on the state of the economy, it appears that Lapid continues to understand communications better than the prime minister, and, in fact, could turn his stint at his troubled office into an even more meteoric rise to the premier’s seat.
By describing Israel’s economy in the worst possible details, Lapid is laying the ground for his own eventual role as the savior of the same economy. Israel’s economy remains robust, but could stand to improve in terms of a more equal distribution of jobs, goods and services.
On April 25, 2012, Fitch Ratings affirmed Israel’s credit rating at ‘A,’ with an outlook of ‘stable.’ The agency predicted 3.00 percent growth for 2012 and 3.50 percent growth for 2013. The “monstrous deficit” Lapid describes can be attributed to the fact that, with a poorer Europe’s appetite for Israeli goods diminishing, Israel’s tax revenues have not hit the anticipated mark. It shouldn’t have been allowed to slide and accumulate as it has done, but it remains more robust than most.
Politically, Prime Minister Netanyahu may rue the day he invited his arch nemesis to get his hands on the state books – because Lapid could actually improve them, or at least look really good trying.