February 24, 2024

The ongoing conflict between Israel and Hamas has led to significant costs in terms of human lives, personal security, mental health, and the economy, as per a recent report by the Institute for National Security Studies. The war is estimated to cost about NIS 1 billion per day, surpassing the budget costs of previous operations. The extensive mobilization of the Israeli military and the damage caused by a surprise attack have led to massive evacuation and reconstruction costs, totaling an estimated NIS 150-200 billion, which is about 10 percent of the country’s GDP.

The economic impact has already been felt due to the absence of hundreds of thousands of workers, slow commercial activity, a weakened currency, hesitancy among foreign investors, and a decline in tourism. With the military and civilian efforts requiring substantial investments, the economic crisis is expected to deepen and have long-term repercussions.

Amidst this situation, there is a debate about the allocation of coalition funds, which are promised to political parties as part of the government-building process. The total funds promised for the current government amount to approximately NIS 14 billion, raising concerns about wasteful spending and lack of oversight.

The Bank of Israel has warned that budget cuts will not be sufficient to address the wartime needs, and discretionary funding, including coalition funds, will have to be diverted. There are calls to reallocate these funds to finance the war and reconstruction efforts, and criticism against Finance Minister Bezalel Smotrich for resisting such calls.

To address the crisis, prominent figures associated with Israel’s right-wing have called for the cancellation of coalition funds. It is argued that in the current situation, diverting these funds to the war and reconstruction efforts is a necessity and a moral imperative.

The article concludes by urging government leaders to rise to the occasion and divert the coalition funds to address the pressing needs of war and reconstruction.