FINANCE MINISTRY CONFIRMS GOI DISENGAGEMENT LAW

C O N F I D E N T I A L TEL AVIV 002955

SIPDIS

E.O. 12958: DECL: 05/10/2015
TAGS: EFIN IS ECONOMY AND FINANCE GAZA DISENGAGEMENT
SUBJECT: FINANCE MINISTRY CONFIRMS GOI DISENGAGEMENT LAW
DOES NOT SPECIFY DEFICIT AMOUNT FOR 2006

REF: TEL AVIV 2940

Classified By: Economic Counselor William Weinstein for Reasons 1.4 (b,
d)


1. (C) Finance Ministry staff informed Mission May 11 that
GOI disengagement legislation specifies a 3.4% deficit
target, including disengagement expenditures, for 2005 only.
This corrects statements made by Finance DG Bachar and by
other Israeli officials during the Joint Economic Development
Group (JEDG) meeting on April 18 to the effect that the 3.4%
target applies to both 2005 and/and 2006. The correction
confirms comments made to the Ambassador by MoF DG Bachar May
9 reported reftel.


2. (C) Insofar as Bachar also told the Ambassador that the
GOI would do "whatever it takes" on the fiscal side to make
disengagement a success, the GOI correction does not
guarantee an improvement in the 2006 deficit compared to

2005. Mission will continue to follow GOI fiscal
developments closely.

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KURTZER