Dispute Over War Cost Reflects in Budget Crisis

September 15, 2014  

The debate over how much Operation Protective Edge cost Israel is having a practical effect on the state budget. A report on Israel Radio Monday said that as a result of its lower estimates of the war’s costs, the Finance Ministry is unlikely to give the Defense Ministry all of the money it is demanding.

Defense Minister Moshe Ya’alon said that the operation cost Israel at least NIS 9 billion ($2.5 billion). The operation required heavy use of explosives, military machinery and vehicles, as well as expensive Iron Dome inteceptors.

“An Iron Dome interception costs $100,000. It is worthwhile, from a financial perspective, but is still expensive,” Ya’alon said. The Defense Ministry is demanding at least that much of an allocation increase in the state budget now under negotiation.

But the Treasury sees things differently. The report said that officials close to Finance Minister Yair Lapid believe that the war cost only NIS 6.5 billion, nearly a third less than the army’s estimate. As such, the Defense Ministry’s demands are unwarranted, Lapid’s aides say – and that conviction will be reflected in the final amount to be allocated to the Ministry.

Prime Minister Binyamin Netanyahu is supporting Ya’alon’s position. Netanyahu has argued for increasing the security budget and decreasing Israel’s deficit. Lapid, who was criticized for raising taxes soon after he came to office, has stated that he has no intention of passing a budget that will negatively affect the middle class.

Sources close to Netanyahu blame Lapid for the current dissensus, arguing that the steps he is taking are actually an attempt to dissolve the coalition and force new elections, through which he hopes to become Opposition Leader. Conversely, Yesh Atid, Lapid’s party, claims the delay is only due to professional disputes, and that Netanyahu is creating an “imaginary crisis” in order to serve his political needs.

Netanyahu and Lapid are expected to meet in the afternoon on Tuesday to discuss the budgetary demand for additional funds for the Ministry of Security. The amount is 11 billion shekels more than Lapid initially wished to assign to security.

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