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Israeli Prime Minister Benjamin Netanyahu said on Monday that he had agreed to support legislation that would delay the collapse of the government by putting off the deadline for passing the state budget.

The bill, proposed by the Derech Eretz faction comprising Knesset members Yoaz Hendel and Zvi Hauser, seeks to extend the Aug. 25 deadline for passing a state budget, buying more time for Netanyahu and Blue and White leader Benny Gantz to work out their differences over it.

The bill will be brought to the Knesset for a vote on Wednesday, Hendel wrote on Twitter on Sunday.

According to a statement from his office, Netanyahu was contacted by Hauser about the bill and agreed to support it in the interest of stabilizing the political system amid the coronavirus crisis.

“I am constantly dealing—apart from security—with two major tasks: First, maintaining health and life, and second, opening up the economy, providing incentives for the economy and getting the economy moving,” said Netanyahu.

“However, for this the government needs to be stabilized so that it can operate efficiently. Therefore, when our friend MK Hauser contacted me yesterday on behalf of the Derech Eretz faction and said ‘Come, give another opportunity to try and stabilize the political system so that we will have a government that can continue to take action in the fight against corona’—I said that I was willing,” he added.

New elections must be avoided at all costs, said Netanyahu According to the coalition deal, if the state budget is not passed by Aug. 25, the Knesset will automatically dissolve, and new elections will be scheduled.

“We need to make every effort to avoid elections, stabilize the government and fight the coronavirus from a health standpoint, and fight to open up the economy. This is what we are doing. I also hope that we are doing this successfully,” he said, according to the statement.

At the center of the budget dispute between Netanyahu and Defense Minister Gantz is whether the cabinet should be formulating a state budget just for the remainder of 2020, as Netanyahu is demanding, or for 2021 as well, as Gantz demands.

The defense minister argues that his Blue and White Party and Netanyahu’s Likud agreed to a two-year budget in the coalition deal reached to form the current government, which took office in May. The dispute came to a head on Sunday with the cancellation of the weekly Cabinet meeting, raising the specter of a new election.

The Aug. 25 deadline was itself legislated in special circumstances. In normal times, a state budget must be passed by March 31 or the government falls. However, it was not possible to meet that date this year due to a political stalemate which caused three Knesset elections to take place within a year, the third of which was held on March 2.

Bank of Israel Governor Amir Yaron  has called on the government to pass the national budget as soon as possible, to stave off another round of Knesset elections as the country grapples with the health and economic repercussions of the coronavirus pandemic.

In a statement on Sunday, Yaron said, “The changing morbidity trends and developments in Israel and around the world are causing great uncertainty regarding employment, businesses’ income and government intake and expenses. The government must move forward as quickly as possible in determining a clear outline for the state budget and other economic decisions needed at this time.”

It is vital, he said, that there be “stability in the conduct of the government and an orderly decision-making process.”

“Reducing the political uncertainty would contribute to the confidence of the markets in the Israeli economy and improve the ability to deal with the [COVID-19] crisis,” he said.

Yaron’s statement comes in the midst of a stalemate over the budget between coalition partners Likud, headed by Prime Minister Benjamin Netanyahu and Blue and White, led by Defense Minister Benny Gantz. Gantz is accusing the Likud of violating the coalition agreement, which stipulates the signing of a two-year budget, for 2020 and 20121.  Netanyahu has been pushing for a one-year budget, which would effectively cover only the last quarter of the year, as a result of the uncertainly created by the coronavirus crisis.


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