Israeli government risks collapse over failure to agree budget

Talks on Tuesday tried to find a compromise between Prime Minister Benjamin Netanyahu and his coalition partner Benny Gantz

Israeli Prime Minister Benjamin Netanyahu and Benny Gantz, centrist Blue and White leader, and Mr Netanyahu's partner in his new unity government, wear face masks as they talk during a swearing in ceremony of the new government, at the Knesset, Israel's parliament, in Jerusalem May 17, 2020. ReutersShow less

The Israeli government risked imminent collapse on Tuesday over its failure to pass a budget, a political crisis that could plunge the country into a fourth round of elections within two years.

Prime Minister Benjamin Netanyahu and his coalition partner Benny Gantz have until midnight to agree a retroactive budget for 2020, after parliament on Monday narrowly rejected their bid to further delay the deadline.

The former political rivals blame each other for the impasse, which comes seven months into their fragile political alliance.

“We should have been joining forces,” Mr Netanyahu told parliament on Monday. “We have to find a way to prevent elections.”

The bill rejected by legislators would have postponed the 2020 budget deadline until the end of the year and set early January to approve economic plans for 2021.

The coalition was granted an extension in August but has proved incapable of agreeing a financial blueprint in the interim.

Mr Gantz accused the premier of being “prepared to drag the entire country into a period of uncertainty, instead of ensuring economic stability and a rehabilitation of the economy”.

The coalition deal initially stipulated a two-year budget be agreed, but Mr Netanyahu in recent months pushed for a plan covering just 2020. The prime minister denied accusations that he is seeking a way to avoid handing the leadership over to Mr Gantz in November next year.

Without a solution at the 11th hour, Israeli authorities will be forced to schedule elections, which will probably be in late March.

The most recent national vote was on March 2, just days before the World Health Organisation declared Covid-19 a pandemic. At the time, Israel had recorded just a dozen cases of coronavirus, while special polling stations were set up for those in home quarantine.

The pandemic has since killed more than 3,000 people in Israel, according to health ministry data, while more than 380,000 cases have been recorded in the country of nine million.

The political deadlock comes as the Israeli government considers tightened restrictions amid a rise in infections. Although Israel's coronavirus vaccination drive started this week, it is unclear how authorities would organise elections during the pandemic.