September 29, 2012 / 8:53 PM / 7 years ago

Israel PM tells coalition partners to back budget or face poll

JERUSALEM (Reuters) - Israeli Prime Minister Benjamin Netanyahu has told his coalition partners he will have to call an early election if they do not back a “responsible” budget he must present by the end of the year.

Israel's Prime Minister Benjamin Netanyahu meets with Canada's Prime Minister Stephen Harper (not pictured) on the side lines of the United Nations General Assembly in New York, September 28, 2012. REUTERS/Andrew Burton

Netanyahu said he would start meeting coalition partners after he returns home from New York on Sunday. Failure to pass the budget by December 31 would mean bringing forward a national ballot currently scheduled for October 2013.

“I’m sorry to say that it depends on each and every (coalition member),” Netanyahu told Israel’s Channel 1 television in an interview recorded in New York on Friday and aired in Israel on Saturday night.

Netanyahu travelled to the United States where he addressed the United Nations General Assembly on Thursday, with Iran’s nuclear programme the highlight of his speech.

“I need a responsible budget and I am saying to my coalition partners: if you are going to go all the way (with me) and don’t only pay lip service ... then there will be a responsible budget, but if I will see that this is not the case we will have to call elections. I hope that they will go for the responsible (option),” the Israeli leader said.

Netanyahu has been under pressure from Israel’s central bank to maintain fiscal credibility at a time when the economy is slowing and tax revenues are falling short.

His right-wing coalition includes five partners who control 66 seats in the 120-seat parliament. Some of the partners, including ultra-Orthodox religious parties, have been reluctant to agree to budget cuts and spending priorities.

Two weeks ago, Stanley Fischer, the central bank governor, urged Netanyahu’s coalition to deliver the budget for ratification by next month, citing concerns about economic stability.

“The prime minister will have to decide whether he can submit the budget by the mid- to end October. He needs to lower the level of uncertainty,” Fischer told the Maariv newspaper.

“I understand that the decision is a complex one, but it is better to have a budget by now. If not, a budget that will be approved after the elections will include a conservative fiscal policy,” Fischer added in the interview.

Israel’s Finance Minister Yuval Steinitz told Reuters in an interview earlier this month it would be possible to know if a budget could be passed at the end of the week-long Jewish festival of Sukkot which begins on Sunday. (Writing by Ori Lewis; Editing by Andrew Osborn)

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