'Israel' plans $60bn debt raise to fund genocide: Financial Times

By Al Mayadeen English
Source: Financial Times
26 Feb 2024 21:28

Amid its ongoing war on Gaza, the Israeli economy has taken a heavy toll as it contracted nearly 20 per cent in annualized terms in Q4 2023.

Israeli occupation soldiers drive a tank on the separation barrier with the Gaza Strip, in southern Palestine, Tuesday, Feb. 13, 2024 (AP)

The Financial Times on Monday reported that the Israeli regime plans to implement a series of draconian measures with the aim of boosting genocide-related expenses amid "Israel's" war on Gaza.

According to the report, citing a senior finance official, these measures include raising about $60 billion in debt, suspending the recruitment of new employees in civil service positions, and increasing taxes—all intended to augment the amount of money allocated to the security budget.

Amid its ongoing war on Gaza, the Israeli economy has taken a heavy toll as it contracted nearly 20 percent in annualized terms in Q4 2023. Moreover, GDP fell by 19.4% compared to the previous quarter on an annualized basis and by 5.2% on a quarter-by-quarter basis, official data showed.

Observers attribute this decline to the mobilization of 300,000 reservists in the Israeli occupation forces, along with the displacement of tens of thousands of settlers along the blue line separating occupied Palestine from Lebanon. Restrictions on Palestinian workers' permits have also contributed to this decline.

Yali Rothenberg, the Israeli finance ministry’s accountant general, told the Financial Times that prospects are expected to improve as a large number of reservists are being released from active duty and consumer spending is slowly recovering.

"The economic fundamentals are there," he said. "If you look at the high-tech sector, it’s there. If you look at the infrastructure investment, it’s there. If you look at the private consumption, it’s there."

A critical factor in recovering economic growth, he said, was the demobilization of reservists, adding that the number still enlisted was about a fifth of the 300,000 called up after the start of the Gaza genocide. He added that the number was expected to decrease to a minimum of 30,000 by the end of March as the war was beginning to show alleged signs of de-escalation.

"This is the scenario which is budgeted," Rothenberg said.

Expectations clash with reality

These statements contradict plans announced earlier this month by the Israeli regime to invade the city of Rafah, which currently shelters more than 1.4 million Palestinians.

Nearly 30,000 Palestinians have been massacred so far, the Palestinian health ministry reports, noting that several victims remain abandoned in the streets or stuck under the rubble, presumed dead, as Israeli occupation forces block medics and emergency services from reaching the targeted areas.

Moreover, "Israel" is unlikely to withdraw troops from the area, as Prime Minister Benjamin Netanyahu has emphasized the necessity of maintaining a military presence in the Strip.

On February 25, Netanyahu presented the Israeli war cabinet with a document of principles regarding the occupation's plans for the future of the Gaza Strip. It included launching excavation works to set up buffer zones in the middle of the Strip.

Regime's Security Spending to Surge by 85%

The regime is planning to increase security-related spending this year by 55 billion shekels ($15 billion), marking an 85 percent increase from the pre-war security budget. This adjustment would elevate the security budget to approximately 20 percent of the 2024 budget, according to the finance ministry, compared to the pre-war allocation of 13.5 percent. The draft budget for 2024 is currently under review by committees in the Knesset and is anticipated to be approved next month.

State revenue for 2023 fell short of forecast by 12 billion shekels, while spending increased by approximately 26 billion shekels to fund the war. This included an additional $4.7 billion allocated to security, as the finance ministry issued special permits to allow the regime to operate outside the budget immediately after the start of the war.

To balance the budget, the ministry plans to raise the value-added tax from 17 percent to 18 percent in 2025. This year and next will further see an increase in taxes on certain items such as tobacco and banking, a freeze on government hiring, and postponed wage increases in the public sector.