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Israel set to approve 2023-24 budget amid protests

Israel economy Reuters/Ronen Zvulun
Controversial plans being pursued by Prime Minister Benjamin Netanyahu and his right-wing government are now impacting economic growth forecasts

Israel’s parliament began a final vote on the state budget late on Tuesday, granting some political reprieve to Prime Minister Benjamin Netanyahu whose hard-right coalition government has been strained by months of protests.

Facing last minute funding demands by some of his religious and far-right allies as his government approached a May 29 deadline, Netanyahu expressed confidence that the budget would pass in remarks he delivered shortly before the vote began.

“We are passing a responsible budget, a budget that remains within the framework, a budget that receives praise also from credit rating agencies,” said Netanyahu, flanked by his coalition partners.

The government is facing economic pressure with rising living costs and fallout from its now-suspended judicial overhaul drive, which triggered one of Israel’s worst political crises, drove away investment and cut growth prospects.

The two-year spending package posed another test to the religious-nationalist coalition, drawing criticism from the government’s own budget division for increasing funding to ultra-orthodox Jewish schools and seminary students in a series of steps it warned would encourage joblessness and harm growth.

Opposition leader Yair Lapid said the budget was the most destructive in Israel’s history.

“This is what economic suicide looks like – a successful, sophisticated, educated country wiping out its own future, eyes wide open,” he told a Reichman University strategy conference near Tel Aviv as the Knesset debate kicked off on Tuesday.

Others in the opposition were equally outraged by hundreds of millions of shekels going toward Jewish settlements in the occupied West Bank, which Palestinians want as the core of a future state. Critics said such spending comes at the expense of wider Israeli interests.

Under pressure at home and abroad, Netanyahu has suspended a plan to overhaul the judiciary to try to negotiate an agreement with the opposition in talks that have been fruitless so far.

The ruling coalition says the proposed changes, which would give it more sway in selecting judges, would restore balance between the branches of government. Critics fear Netanyahu, who is under trial on graft charges that he denies, plans to use the reforms to curb the independence of the courts.

Hours before Monday’s Knesset vote, several thousand people protested outside the parliament against the budget, waving Israeli flags, chanting and blowing horns.

“I’m here today to protest against a bunch of people who hijacked the state of Israel,” said Amos Nadai, 75, a retired foreign ministry employee. “It’s a budget for themselves, for their cronies and it will be a disaster for the state.”