Coalition Crisis Over, Budget Will be Passed

After it appeared last night that the government coalition might break up over the proposed budget, the pieces suddenly fell into place as all four of Kadima's partners agreed to drop their demands.

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Hillel Fendel and Nissan Ratzlav-Katz, | updated: 09:00

The Labor Party appeared yesterday evening to be on their way to voting against the budget, and Shas and the Pensioners were also making strong fiscal demands - when suddenly the Prime Minister's Office announced that all the coalition parties had agreed to support the budget.

Finance Minister Avraham Hirschson (pictured) and Prime Minister Ehud Olmert were uncompromising on the proposed budgetary cap of 295 billion shekels. Hirschson said the Finance Ministry simply does not have the necessary funds to meet all of their additional demands, while Prime Minister Olmert made it clear that the coalition agreements will be respected, but nothing beyond that.

The exception is Avigdor Lieberman's Yisrael Beiteinu party, which joined the government several weeks ago without a detailed coalition agreement. It will receive 180 million shekels in benefits for the elderly, newly-released army veterans, and Holocaust survivors.

Shas, too, claims it has an understanding with the Prime Minister. Party leader Eli Yishai told Army Radio that Olmert promised him that monthly child allowances would be increased by some 120 million shekels.

Labor Party head Defense Minister Amir Peretz, in explaining his about-face, said only that he has no desire to break up the government.

The way is now paved for the Knesset Finance Committee to approve the Economic Arrangements Bill, which accompanies the budget proposal to be presented to the parliamentary plenum next week. The committee convened at 11 AM, but had still not completed voting on all the clauses by press time. "It is advancing nicely," a committee spokesperson told Arutz-7 shortly after 3:30 PM.