MK Shelly Yachimovich
MK Shelly YachimovichIsrael news photo: Flash 90

If Israel is to remain solvent, taxes have to go up, and the government has to cut back, the Bank of Israel said Monday. That announcement, said Labor MK Shelly Yechimovich, was “a huge slap in the face” to the government of Binyamin Netanyahu and Yair Lapid.

In its announcement, the BOI said that Israel had no choice but to cut NIS 18 billion from its budget. In its semi-annual fiscal survey of the Israeli economy, the Bank said that the government had overstepped its budget significantly in funding several programs, and negotiating contracts with public workers. To get back on track, NIS 18 billion must be found – either by cutting budgets or raising taxes.

What that means, Yechimovich said, is that “the middle class dream of Netanyahu and Lapid has evaporated. Already many Israeli small businesses are empty of customers because people do not have money to buy as growth slows. Finance Minister Lapid's promises of a rosy future are dissipating in the face of economic failure.

“It is the poor and the middle class who will pay for the mistakes of this government,” Yechimovich said. “They must pay for health and education from their pockets, while the 'tycoons' make out like bandits, with huge government gifts. The gap between promises made by politicians and the sad reality has never been greater,” she added.