Budget-strapped Israel is pressing the United States to conclude a deal extending defense aid beyond 2017, when Washington’s current $3billion annual payouts to its Middle East ally expire.
They said a swift agreement on future U.S. grants would help Israel’s military draft a five-year austerity plan accommodating Prime Minister Binyamin Netanyahu’s government.
“It’s difficult to budget into 2018 and 2019 without knowing what funds will be available,” an Israeli defense official said on Friday.
The issue, long a source of friction between the Defense and Finance Ministries, has flared again in recent days.
“We cannot bridge this budget rift,” Defense Minister Moshe Yaalon told Israeli lawmakers. “There has been a mortal blow to training, to readiness and to fitness.”
That was followed by a decision to cancel the planned national home front defense exercise because of budgetary constraints.
In response, the Ministry of Finance accused the Ministry of Defense of running a scare campaign to get more money.
Defense sources retorted on Army Radio on Sunday: “Anyone who tries to present the situation as though we are conducting a propaganda campaign is being misleading. The figures were presented to the security cabinet ministers and it was clear to them that at this point in time they will have to make further decisions and bridge the budget gap, otherwise the army, certainly as far as exercises are concerned, will come to an almost complete halt.”
The Ministry of Finance points out that any funding increase for the military will have to come out of other ministerial budgets; while Defense officials contend that Finance reneged on earlier funding commitments.
U.S. Secretary of Defense Chuck Hagel will visit Israel next week and the future aid will probably be raised by his hosts, according to a different official who declined to be identified by name or nationality.
The previous Republican administration signed a 10-year deal with Israel in 2007 granting it $30 billion, most of it going on American defense products.
Israel’s Defense Ministry and the U.S. embassy in Israel both declined comment on the aid negotiations, which are under way.
A U.S. official briefed on the talks said Israel was seeking an overall increase to between $3.2 billion and $3.5 billion a year, while the Obama administration had spoken of $2.8 billion.
The allies would probably settle on $3 billion “or thereabouts,” the official predicted, adding that Israel “wants to get this worked out as soon as possible.”
Israel’s defense budget of around $14.5 billion has been challenged by Finance Ministry demands to cut $870 million. Netanyahu’s security cabinet in December separately approved a $930 million boost to the defense budget, but the military says it needs more to contend with proliferating regional threats.
A senior Israeli military officer said the belt-tightening had put the brakes on David’s Sling, a missile interceptor developed jointly with U.S. firm Raytheon Co. and which is being considered for purchase by Poland as it accelerates its defense preparations in response to the Ukraine-Russia standoff.
David’s Sling could be operational in Israel in a year, the officer told reporters on Thursday — but only if more funds were found. “The moment you don’t have the money, you pull back on the development and on getting the kit in the field,” he said.