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. ********************************************* ******************** Visit Embassy Tel Aviv's Classified Website: http://www.state.sgov.gov/p/nea/telaviv You can also access this site through the State Department's Classified SIPRNET website. ********************************************* ******************** KURTZER