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Bank of Israel vs. Lapid on Running Up Deficit

Lapid seeks leeway in 2013 budget; Bank of Israel chief Stanley Fischer nixes change to deficit plan.
By Maayana Miskin
First Publish: 4/14/2013, 11:39 AM

Yair Lapid
Yair Lapid
Hezki Ezra

Prime Minister Binyamin Netanyahu and Finance Minister Yair Lapid cancelled a meeting that had been scheduled for Sunday morning. Instead, Lapid was told to first iron things out with Bank of Israel head Stanley Fischer, who is strongly opposed to his latest proposal regarding the deficit.

Lapid wants to change the deficit goal for 2013 in order to prevent a large-scale budget cut for 2013-2014.

Netanyahu wants Lapid to reach an agreement with Fischer, who opposes any change that would mean a higher deficit than planned, so that the amount of money available for the 2013-2014 budget will be clear before he and Lapid debate various proposed budgets.

Senior Likud member Danny Danon, the Deputy Minister of Defense, has already criticized Lapid over the proposed 2013 budget. Danon said a budget cut proposed by Lapid would hurt state security.

In addition, he said, it would lead to the layoff of thousands of employees in the military industry.